Day Trading Investing Info

Once upon a time, day trading was only available to financial institutions like banks because they held the cards – they had complete access to the exchanges as well as the market data. With advancements in technology – particularly the internet and new software concepts, individual traders are able to directly access the same market data to pull of trades at low cost.


What is Day Trading

Trading in general is the action of buying and selling various financial instruments. This can include futures, options, stocks, securities, currencies and more with the goal of making a profit from the difference between the purchase and the sale price. Day trading changes the game up a bit. With typical trading, those securities, options, stocks, etc. are often held overnight. With day trading, positions are rarely (if ever) held beyond the close of the market.


Personality and Styles Behind Day Trading

Every investor or day trader has their own particular style based on their personality. Some will choose one style and stick with it while others may mix it up and rely on multiple styles to close deals. Styles range from short term trading where positions are only held for a few minutes (or even a few seconds) to long term swing and position trading where the items being bought and sold are held for most of the day while the market is monitored.

For those involved in day trading and investment there’s a lot of flexibility in how the system works. This allows for open positions for anywhere from a few minutes to a few hours. It ultimately boils down to how the trade if doing and whether or not it’s holding “in profit”.


Day Trading – Types of Trades

Like the various types of trading styles there are a few types of trades that occur in day trading and investing.

Trend Trades – These trades occur in the direction of the current price change, so when a position is on the up, then the investor buys.

Counter-Trend Trades – These are trades against the direction of the price change, so when the price is going up, the investor sells.

Ranging Trades – Ranging trades occur when the trade goes back and forth between several prices. This is typically used when the market goes sideways.

It’s not uncommon for an investor to choose a specific type of trade and run with it. However, many investors will also mix it up by combining more than one type of trade depending on the current condition of the market.


Which Markets are Involved in Day Trading

There are a lot of different markets that are open for day trading, all offered through various exchanges around the world. The most popular types are futures, options, currencies and stock. Within these markets you’ll find additional groups based on stock indexes (the Dow Jones), currency exchanges (taking place between the Euro and US Dollar for example), and commodities (such as gold, oil, eggs and more).

Day traders often access the exchanges and their markets through direct access brokers which typically provide faster trade execution at a lower cost.

This information is for educational purposes only and in no way guarantees your profitability by trading the equities mentioned. See Terms and Conditions.