A Day Trader is one who executes buying and selling of financial instruments on the same trading day or intraday. Day trading is often seen as a lucrative option by many to maximize profit, but this may not always be an easy game.
Day traders usually target highly liquid stocks where slightest movement is being monitored to assess and used to book profit. Day traders use leverage to multiply their gains from small price movements. As day trader does not hold the security for more than a day, the long term trend or direction are unimportant for them. They make use of volatility of the market and are flexible to make quick decisions depending upon the situation.
Day traders are usually referred as speculators rather than investors. Unlike investors, who focus on financial attributes of the security, speculators try to make profit from the price movements.
Institutional Day Traders work for a financial institution and have access to huge amount of resources, software and tools. Day-to-day traders, who use their own capital for trade and are not exposed to facilities provided to Institutional day traders, are known as Retail Day Traders.
Day traders need various modes of assistance such as equipment, tools, market knowledge and the ability to trade at the right electronic platform to be successful with intraday trading. An uninformed decision may lead to your profit being washed away.
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