Day trading is one kind of a short-term trading style. Though it’s commonly confused with scalping, the difference is that you typically take only one trade a day. Then, you close it when the day is finally over.
Day traders commonly first choose a side (buy or sell) at the beginning of a trading day. They do that by acting on their bias. They monitor Forex Live Account the market for the whole day, and when the session is over, they sleep either with a profit or a loss.
The most distinctive trait among day traders is that they don’t like holding their trades overnight.
These things being said, day traders are also ones that have a lot of time to monitor their trades. They spend the whole day to analyze, execute, and monitor a trade.
What makes a day trader?
Day trading isn’t suitable for every kind of trader because it comes with strict requirements as well as inherent risks. There are great rewards waiting for you if you do day trading properly. However, if you don’t have some specific qualities and the right attitude, it’s maybe better to move on and search for another trading style.
As mentioned above, HQBroker Review being a day trader means you open and close a position at the same day. Day traders are averse to risks that may be incurred when they sleep on their trade. Situations can change overnight, and this explains why day traders typically finishes trading before the day ends.
Day traders are also required to have a lot of extra time. Unlike long term traders, you will only have one day to analyze, execute, monitor, and finish a trade. Therefore, you have to make every second count and use the time you have to analyze the market throughout the day.
What DOESN’T make day trader?
Obviously, day trading can be better suited for those who want some action throughout the day unlike longer term traders, who are typically more patient when it comes to their positions. Some of these long term traders even hold a position for a year.
Another obvious no-no for a day trader is not having the sufficient time and attention to analyze the market.
Lastly, day trading may not be suitable for traders who have a day job, which obviously will eat up almost all of the trader’s time.
What do you have to consider?
With all those things stated above, you have to consider if day trading will really suit yours trading personality as well as your lifestyle.
First, you have to consider if you have the time to spare for market analysis. You cannot make a great trading day without spending much time on analysis.
Therefore, you should also consider the way you analyze the market. You have to keep yourself updated on the latest tools and changes in the fundamentals of the asset you are trading. You should have the time to read economic and market news.
It also goes without saying that you should educate yourself about both fundamental and technical analyses, because these two will definitely help you make trading decisions at the drop of the hat. Day trading will almost certainly require you to make up your mind about the trades even when you’re on the fly.