Key Aspects of Day Trading:

Day trading is a short-term trading strategy where traders buy and sell financial instruments—such as stocks, options, currencies, or futures—within the same trading day. The goal is to capitalize on small price movements and profit from market fluctuations.

• No Overnight Holdings: All positions are closed before the market closes to avoid risks from after-hours price movements.
• High-Frequency Trading: Traders make multiple trades per day, often using technical analysis and real-time data.
• Leverage & Margin: Many day traders use leverage to amplify potential returns (but also increase risk).
• Risk Management: Stop-loss orders and strict strategies are essential to minimize losses.
• Market Liquidity & Volatility: Ideal assets for day trading are highly liquid (e.g., popular stocks, forex pairs) and volatile enough to present trading opportunities.

Common Day Trading Strategies:

1. Scalping – Profiting from small price changes, often within seconds or minutes.
2. Momentum Trading – Riding trends driven by news or strong price movements.
3. Breakout Trading – Entering trades when an asset breaks above or below key price levels.
4. Mean Reversion – Betting that prices will return to their historical average after extreme moves.

Day trading requires discipline, experience, and a strong understanding of market patterns. It can be lucrative but also carries significant financial risk.