What is day trading

Day trading is the practice of buying and selling of various financial instruments during the day within the same trading day (daily basis). It means the transactions of the opening and closing of a position are done in the same business day. With the main goal of day trading is get a quick profit from the rise or fall or from the difference between the buying price and the selling of the price value.

Day trading used to be the exclusive preserve of financial firms, professional investors and speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, it has become increasingly popular among casual traders due to improvements in technology, changes in legislation, and the popularity of the Internet.

Some of the more commonly day traded financial instruments include stocks, options, futures contracts and currencies. Day trading will generate great commissions, even if the per trade cost is low. But day trading is also extremely risky trading style and can result in significant financial losses in a very short period of time.