Day Trading

Day trading is a type of stocks and shares investment where the financial instruments which are purchased are all generally bought and sold on the same working financial day. Traders who specialise in this kind of trading are known as day traders.

In the past this kind of trading really only happened in specific trading firms but nowadays technological advances such as the Internet make day trading something that people can do from home as well if they like.

Day traders make decisions on what to buy and when to sell based on their own judgement of the markets in question. Their aim here is to buy low and to sell as high as possible in as short a space of time as is possible. So, for example, a trader may buy early in the day and sell late in the day or he/she may buy and sell in just minutes. There are various kinds of financial instruments that can be traded in this way including:

Stocks and stock options
Currencies
Futures

Experts recommend that day trading is something that is best left to experienced traders as it can be a high risk way to try and make money. The returns here, however, can potentially be extremely high. Some traders will buy and sell with their own funds/managed funds here and some will take on margin trading where they borrow funds to make their trades.