Day trading refers to traders who focus on short-term trading, entering and exiting positions over a day and benefiting from fast-moving markets.
It’s worth that this form of trading is not suitable for individual investors who do not possess both time and capital as it is a high-risk form of trading that requires a high amount of vigilance for it to be successful. The optimum conditions for a day trader are when the market is at its most volatile as they will see large movements in price in a relatively short period.
One of the key strategies a day trader needs to possess is the know-how on which instruments to trade on as well as when to enter and exit a trade.
- When traders buy and sell financial instruments over a single session in the markets, normally a day, this is referred to as day trading.
- The key characteristics of a day trader are capital, time, experience, and knowledge.