Day Trading

Day trading is a trading strategy where traders buy and sell financial assets within the same day, aiming to profit from short-term price movements. Unlike long-term investors, day traders do not hold positions overnight, as they seek to take advantage of small fluctuations in price during market hours. This approach is common in markets like Forex, and cryptocurrencies, where liquidity and volatility create multiple trading opportunities throughout the day.

Day traders rely on technical analysis, using charts, indicators, and price patterns to make quick decisions. They often use strategies like scalping (making many small trades for quick profits), momentum trading (buying assets that are rapidly increasing in price), or breakout trading (entering trades when the price moves beyond a key level). Since day trading requires fast execution and strong risk management, many traders use stop-loss orders to minimize losses and protect their capital.

Browse through other terms in our Trader’s Dictionary.