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Day Trading

Glossary

Day trading is a high-speed trading strategy where investors buy and sell financial assets (stocks, options, forex, or crypto) within the same trading day. The goal is to profit from short-term price movements, rather than holding investments long-term.

Some Generally Accepted Aspects of Day Trading: 

  • No overnight positions: All trades are closed before the market closes.
  • High volatility & volume: Day traders focus on stocks or assets with rapid price movements.
  • Leverage & margin: Some traders use borrowed funds to amplify potential gains (and risks).
  • Technical analysis-driven: Strategies rely on charts, indicators, and price patterns instead of company fundamentals.

Day trading is risky and requires skill, discipline, and knowledge of market trends. The PDT (Pattern Day Trader) rule requires U.S. traders with accounts under $25,000 to limit day trading to three trades per rolling five-day period. See also: Margin and Margin Requirements