What is daytrading?

What is daytrading?

Daytrading is generally defined as buying and selling a financial value within one trading day. This financial value can be anything, but most of the time it concerns shares, indices and currencies. Normally, day traders close their positions at the end of each trading day, but not all traders are that strict. Positions that are open for more than a day or a few days are generally called swing transactions. Both day trading and swing trading are a form of speculation.

Day traders are usually well educated and informed and use short-term trading strategies to take advantage of small price movements.

Daytrading was once an exclusive activity for banks and professional traders. As electronic trading became available to retail investors via the Internet, day trading also became possible.