Day trading is a short-term, active strategy where traders buy and sell financial instruments within the same trading day, aiming to profit from small price fluctuations. Unlike long-term investing, positions are closed before market close to avoid overnight risks.
Common strategies include:
* Scalping: Making many small profits from tiny price changes, often holding positions for seconds or minutes.
* Momentum Trading: Capitalizing on strong price movements driven by news or volume, riding the trend until it shows signs of reversal.
* Breakout Trading: Entering a trade when an asset's price breaks above resistance or below support levels, anticipating a continued move in that direction.
Day trading demands intense focus, quick decision-making, and robust risk management, including strict stop-loss orders. It's a high-risk, high-reward approach requiring significant capital and constant market monitoring.