What is Day Trading?

A day trader seeks to benefit from short-term fluctuations in stocks, currencies (FX) or CFDs within a single day. By “shortening” (selling empty) their stock positions, one can also earn on falling stocks. Within a single trading day, there are many opportunities for an attentive day trader.

Intraday trading

Whether a person trades from home or from a trading room – both variants have advantages and disadvantages. The costs are generally much higher in a trading room, but individuals have contact with like-minded people. Unfortunately, many trading centers are hard to get into, so this alternative is rarely available.

Internet influence

In combination with the Internet, completely new and dynamic markets are opening, especially in the equities sector. Brokers allow customers to buy or sell shares via the Internet. Many brokers offer comprehensive solutions through the Internet and, thus, have access to all important national and international stock exchanges in real-time, which allows the investor to act in the same way as professional securities brokers.

Costs

In this context, the transaction costs are of no small importance. American suppliers are usually content with 2 to 5 US dollar packages for one trade. In the case of other credit institutions, on the other hand, their commission is responsible for the execution of a purchase or sales order on their markets. Depending on the order volume, this means a considerable price difference for the customer.

Risks

Day trading offers disproportionate profit opportunities, but the risks are also significantly higher than in the conventional money market. Investors should be aware that a total loss of capital is possible, especially if they do not follow some of the basic rules. Day trading is certainly not suitable for everyone.

Personal attitude

Anyone who sees day trading as a way to get rich quickly and effortlessly will sooner or later find out this is not the case. Investors should be aware that day trading can be a job like any other. Even if they go at it every day, they will need a while to really understand how the business works.

As soon as he or she sees it as a way to “gamble”, they should dissolve their account and invest their money another way. But with patience and diligence, almost everyone can learn how to be successful at day trading. Watch Markus Heitkoetter on YouTube to learn more.