#TradingTypes101
There was a time, years ago, when the only people who could actively trade in the stock market were those who worked for large financial institutions, brokerages, and trading houses. The advent of online trading, with the instant dissemination of news, leveled the playing field. Easy-to-use trading apps and 0% commissions from services like Robinhood and Charles Schwab have made trading easier than ever for retail investors.
Day trading can be profitable, as long as you do it correctly (although there are no guarantees). However, it is often challenging for beginners and frequently a disadvantageous way to trade for novice investors. The only way to improve those odds is to learn the details of technical strategies and other crucial parts of the market, in addition to choosing the right day trading platform for you.
So, what exactly is day trading and how does it work?
Key takeaways
Day traders buy and sell stocks or other assets during the trading day to profit from rapid fluctuations in prices.
Day trading employs various techniques and strategies to capitalize on perceived inefficiencies in the market.
Day trading is often informed by technical analysis of price movements and requires a high degree of self-discipline and objectivity.
What is day trading?
Day trading is a fast-paced form of investing where individuals buy and sell securities within the same day. The goal is to profit from short-term price movements in stocks, options, futures, currencies, and other assets. Day traders typically combine strategies and forms of analysis, including the following:
Technical analysis: focuses on past prices and trading patterns to predict future trends.
Momentum trading: capitalizes on short-term trends and reversals to capture quick gains.
