How to Day Trade Online

Day Trading is essentially any type of online trading in which all trades are completed before the end of a daily trading session. For someone who decides to trade the New York session or the London session for example, that trader would open and close all trading positions between the hours of 9:30am and 4:30pm Eastern time on weekdays (for the New York session). It must be noted that day trading is not for the faint of heart. In fact, day trading is one of the riskiest types of investments available through an online trading platform.

Day trading is most common in equities and forex trading and may be considered risky because all positions must be closed before the end of the daily trading session. This must happen whether or not that trade makes logical sense. In addition, day trading involves high amounts of leveraging and is based on markets that are highly liquid. The typical day trader is extremely knowledgeable about trading and is usually able to invest quite a bit of funds to complete daily transactions.

Day Trading strategies depend on how much capital the trader is willing to risk. The main types of day trading strategies include swing trading, arbitrage, trading news, and mergers and acquisitions. Swing trading is a high risk/high reward strategy; arbitrage is a low risk/medium reward strategy; trading news is a medium risk/medium reward strategy and trading mergers and acquisitions is a medium risk/ high reward strategy. Day traders may trade individually or they may be employed by large institutions.

While some traders make a full-time income from day trading, the failure rate among day traders is relatively high. However, with proper training and with the right level of discipline, it is possible to make a very lucrative income from day trading.

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