What is Day Trading?

 Day trading means buying and selling of stocks, forex, and even bitcoins at the end of the day either in the same account or the same exchange. There is an aim of earning profit from small changes in price. Contrary to the long-term investing where people keep their investments intact for months or years, day traders exit all their positions before the market is closed.

 How Does Trading Work During a Day?

 Using highly sensitive tools such as the highly implemented technical analysis where by charts and markets are followed in a bid to influence the future movements of prices. Unlike fundamental traders, they rely on technicals to analyze stock prices; they employ graphs such as candlestick charts and moving averages to help determine when to buy and sell.

 Key Features of Day Trading:

• Short-term focus: The stocking of various types of products and all the trades are done within the same day.
• Multiple trades: If a day trader is trading equity or stocks for example, he /she engages in several trades in the day with the aim of profiting from movements in the prices of the shares.
• High risk, high reward: However, the same is not without rules as day trading despite its potential to bring quick money, it can cause massive losses.

 As a result, one has to ask the following questions:

Who can become a day trader?

 All it takes is a minor knowledge of the markets and the courage to put up for high risk in order to become a day trader. Most trading accounts are set up with small amounts of capital and the account size increases as they gain experience.

 And yet, day trading is not for everybody. It requires:

• A fast internet connection.
• A reliable trading platform.
• Good decision-making under pressure.
• Once again it is time to cover the markets throughout the day.

 Advantages of Day Trading

 Quick profits: Another great appeal is that day trading probably the most popular way to make large money quickly.

 No overnight risk:

 Since you keep closing all your trades before the market closes, this will help you avoid any risks which may be occasioned by an overnight market movement.

 Flexible work schedule:

 Some of the possible benefits that day traders engage in include; self-employment since they are their masters, and work from any location of their choice as long as they have internet services.

Day Trading: Opportunities and Threats

 High volatility:

 Fluctuation of prices is relatively fast, enabling a trader to suffer formidable losses, in the event he is not cautious.

 Emotional pressure:

 Day trading can be tiresome full of pressure due to the frequent and fast decisions that one has to make.

 Requires time and focus:

 It follows the markets closely meaning it can only be done in the day hence taking much time than the long term investing.

Tips for Successful Day Trader:

 In practice, here are the tips to engaging in successful day trading:

• Start with a Demo Account: When starting trading, use demo account which lets to master all the things without using one’s money.
• Use a Trading Plan: It is good to quantify on how much one is willing to risk per trade as well as the profit objectives to be made.
• Manage Risk: One should never go for a win that they are willing to lose Never lose more than what they can afford to. It is possible to reduce loses with the help of stop-loss orders.
• Keep Learning: This market is never stagnant, and therefore knowing the latest news in the market, the trends, and even the strategies in place will be important occasionally.
• Stay Disciplined: This means that, do not be emotional when it comes to the trades that you are willing to make. There’s always a reason why things happen, don’t make impulsive decisions without thinking twice.

 Common Day Trading Strategies

 Scalping: Refers to the process whereby one trades numerous contracts on a daily basis with an aim of gaining a small profit from each transaction.

 Momentum Trading: This strategy involves identifying stock or an asset that is trending in a particular direction accompanied by a heavy trading volume. Short term traders enter to capitalize on the trends and then dispose of their stock without any concern for their company’s health.

 Breakout Trading: Traders look forward to a price bar to cross a support or a resistance level and trade according to the breakout.

 Tools for Day Trading

 To succeed in day trading, you’ll need access to the right tools:

• Trading platforms: Some of such sites include MetaTrader, TradingView, or thinkorswim, where one can find the real-time data, charts and news.
• Brokerage account: Hence, finding the right brokerage firm with low charges and small time depicting a stock is paramount.
• Technical analysis tools: For trends to be identified by the traders, various features such as Bollinger Bands, RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) features are employed.