A day trader buys and sells financial instruments multiple times within the same trading day, holding onto them for no more than a few hours. FIRNA and NYSE refer to them as “Pattern Day Traders” and classify them as anyone who successfully executes more than four trades a day for five days or invests in a firm that is capable of making this number of trades.
The primary difference between pure day traders, swing, and position trades is the fact that day traders always end the day in a cash position, no overnight trades. And while there is no limit to the types of securities they can trade, most of their activities are confined to the highly liquid stock and currency markets.
The highly accommodative nature of the securities market makes it possible for virtually anyone with access to a computer and fast internet to join in as a day trader. However, only a small percentage of all these entrants turn the trade into a profitable income generating stream. So what does it take to become a professional day trader? Find out everything you need to know in this guide.
Day trading stocks, forex, commodities, and futures is all encompassing and not for the faint-hearted. It involves risking your invested amounts time and gain while demanding that you maintain objectivity, regardless of the number of losses you might have suffered in the previous trades. The industry players have, however, come together to force workarounds for the different aspects of the trade like making it possible for new traders to borrow effective trading strategies from their more experienced counterparts.
There are also volumes of day trading tutorials available freely on the internet and on your preferred broker’s website. Some like Plus500 as well as the Zulu platform has gone ahead to introduce revolutionary features such as the social trading platform where traders can copy pro trader’s settings and benefit from their mentorship and trading guidance.