Day trading also known as intraday trading or short-term trading is one of the most misunderstood trading techniques. The fast pace of moving investment positions within a single trading day leads to a sense that day trading is riskier or more volatile than other types of trading. Let's put these theories to the test with an overview of day trading and some helpful short-term trading strategies for beginners and experts alike.
By the strictest definition, a day trade is a position that is entered and exited in a single day. Day trading refers to market positions which are held only a short time; typically the trader opens and closes a position the same day but positions can be held for a period of time as well. The position of an investor engaged in daily trading can be either long buying outright or short "borrowing" shares, then offering to sell at a certain price.
A day trader or intraday trader is looking to take advantage of volatility during the trading day, and reduce "overnight risk" caused by events such as a bad earnings surprise that might happen after the markets are closed. According to experts at Online Trading Academy, the fact that day trading positions are processed in a single day actually makes it safer rather than riskier. The longer you are in a position, the greater the likelihood is that price could move against you. By day trading, you eliminate overnight and weekend risk, especially when you trade markets that close, like stocks.
In addition, day trading tends to reduce, not increase, market volatility. Day traders are typically looking for their profits in small price movements up or down. Their daily trades provide liquidity which keeps markets running smoothly, as compared to lightly traded markets which are subject to dramatic price swings. And no, day trading is not a way to get rich overnight. Done properly, it is a conservative investing approach that is utilized by many institutions as well as well-educated individuals who do it as a profession.
They thought they could "go to work" in their pajamas and make a fortune in stock trades with very little knowledge or effort. This proved not to be the case. Yet day trading is not all that complicated once you learn a simple, rules-based strategy for anticipating market moves, such as that taught at Online Trading Academy.
For stocks, this would be the first two hours of the official stock market open, am to am EST. While futures trade nearly 24 hours a day, they experience the best day trading opportunities from am to am EST. The Forex market is open 24 hours a day but experiences the best price movement for day traders at the London open, am to am GMT. As you can see, the morning hours provide the best day trading opportunities. To be a day trader, you are going to need some equipment and services.
Beginners can get overwhelmed by what they perceive to be the fast paced and aggressive strategies necessary to generate large returns through day trading. This doesn't have to be the case, as Online Trading Academy's patented and proven core day trading strategy relies on patience and a good understanding of how to analyze risk and reward scenarios on any trade. I like it very much. That picture of the elephant in the room is hilarious. Hi Nial I have just started to read your lessons and this was superb. Excellent look forward to read others as well.
Dear Nial, you are my mind reader :. Every time I read your new article it is about an issue that I had a previous day! Thank you so much for your input, it is so valuable! Im so happy that I found your site. You are my real mentor!!! Great article again, many thanks. Thousands of trading strategies exist.
U ve again specified the holy grail with this article. Another excellent article. Many thanks. Hi Nial, another great article with a great lesson! Reading between the lines of your article, I have learnt the hidden secret of trading practically. Salute to your profound knowledge of trading. Thank you so much for the tipps, I have just started trading and I need as much information as possible I would like tho make this a succecs. Thank you again. Nice one Nial, what a nice article, I think this will help me alot.
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I will apply everything I have learned from you and hopefully I will be a good trader like you in no time. Your email address will not be published. Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Learn To Trade The Market Pty Ltd, it's employees, directors or fellow members.
Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website.
What Is Day Trading?
The past performance of any trading system or methodology is not necessarily indicative of future results. High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose.
Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Search for:. SignUp For Free. Knowing when to let a profit run Every now and then the market will be just ripe for a 10 bagger….
I can however give you some simple filters that you can use to assess trades on a case by case basis to help determine whether or not they are good candidates to try and run into a bigger winner: 1. The chart image below shows a price action signal that formed on a retrace back to the breakout level: 2. Obvious trend continuation signals Strong trending markets can obviously be good candidates to try and let your trade run into a big winner. The chart image below shows a good example of trading price action trend-continuation signals which can be good candidates for trailing your stop to let the trade grow into a bigger winner: 3.
The chart image below shows a fakey signal that formed after the market had retraced back to a key resistance level within the down-trending market: The above scenarios can be good for letting your profit run. Checkout Nial's Professional Trading Course here. Regards Dmitriy Reply. Hettie December 4, at pm. Rahmat May 14, at pm. Thabang Madondo December 5, at pm. Salute Reply. Thabang Madondo October 19, at am. This is a very eye opening article, thank you my Mentor. Alexander May 18, at am. Keep up with the great trading lessons.
Great Job! Alex November 20, at am. Igor August 17, at am. Excellent lesson! Thank you! Joseph Onele June 11, at pm.
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This article is awesome, Thank you for this wonderful explanation. Hazari L. Arora June 2, at am.
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Great article!!! Simply superb Reply. Ricky May 4, at pm. Great article and give me enlightenment thanks…. Sagar Rajput April 26, at pm. Excellent write up, Nial. God bless you. Michael April 3, at am. Asa March 29, at pm. The knowledge nd wisdom inherited from GOD on this fx article will not decrease but ever increase tanks 4 d great article Reply.
George Botoman March 10, at am. Very nice article Nial : reminded me how Money Management is important : Reply. A very sensible first lesson. Haroun Kola March 3, at pm. Henry March 3, at pm. Thank you Nial! Czarek March 3, at am. Funny elephant picture Nial : Reply. Jennifer March 3, at am. Thank you Nial!! I always planted to increase my lot sizing after a win :p I will stick to the consistent lot sizing!!
Thank you so much. This article has help me LOTS! Thank you once again Reply. Hi Nial, wonderful article Nial thnx once again Reply. Pham March 2, at pm. Very useful article. Thank you Nial for sharing your knowledge and experience. Uthayakumar March 2, at pm. Hi Nial This is your another great article helpful for everyone.
Thanks again Reply. Venkat March 2, at pm.
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Ian March 2, at am. Brilliant articles, I like it very much, Thanks Nial Reply. Leah March 1, at pm. Karl March 1, at pm. Mehdi March 1, at pm. Good luck Mehdi Reply. Ramli ms March 1, at pm. Thanks Nial. Great refresh trading… Enjoy and Cheers Reply. Nsibande Mzabalazo March 1, at am. Cant think of anything better than the article about risk management superb article mr Fuller Reply.
Bashier Rahim March 1, at am. Wibowo March 1, at am. Mide March 1, at am. Siyabonga March 1, at am. Great article Nial, it makes a lot of sense, thanks a lot!! Jay March 1, at am. Natalia Keenan March 1, at am. Barry March 1, at am. Simply outstanding info as always Nial! Just consistently excellent!!
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