So What is Day Trading?
Day trading most commonly refers to the practice of buying and selling futures, options, currencies , and stocks during the day such that at the end of the day there has been no net change in position: for every position bought an equivalent position is sold. While in the past day trading was mainly the domain of institutional traders, the advent of the internet has facilitated individual traders' immediate access to global exchanges, market data, and relatively low transaction cost electronic trading.
Day trading defined:
"A primary motivation of this style of trading is to reduce the risk of holding a position overnight (where the open price may have significantly changed from the previous day's closing price).
Day trading is not necessarily more risky than any other trading activity. However, the common use of buying on margin (i.e. using borrowed funds) amplifies gains and losses such that substantial losses or gains can occur in a very short period of time. It is commonly stated that 80-90% of Day traders lose money. An analysis of the Taiwanese stock market suggests that "less than 20% of day traders earn profits net of transaction costs".
Day trading used to be the domain of financial firms and professionals and some savvy private investors and speculators, but in recent years has become notoriously common amongst casual traders taking advantage of new facilities offered via the Internet.
The NASDAQ officially defines "pattern day trading" as placing four or more round-trip orders over a five-day period. A pattern day trader is treated differently from other traders: a broker may allow margin levels as low as 25% as opposed to the usual 50% e.g. a day trader can leverage the $100 in his account to buy $400 worth of stock; a broker may require the trader maintain a minimum liquidation value e.g. if the account value falls below $25,000 no day trading is allowed.
Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest-rate futures, and commodity futures."
Excerpted from, Wikipedia
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Within what is termed "day trading" there are variations in the style and the type of day trading that a trader may use as his or her methodolgy. For instance, the length of time that a day trader holds a position can vary greatly, from a short-term scalping play to day-long swing trading. Day trading strategies include trend trading, counter-trend trading and range trading. By signing up for DTI's in-depth instruction you will learn how these various plays are executed. By learning DTI's time-tested, winning strategies you will eliminate the tendency of many day-traders to waste time on inefficient trading habits,
Additionally, while the definition above would lead you to believe that you need $25,000 to get started, you can start trading futures on a much smaller level. And, we encourage you to learn as much as you can about DTI and the benefits of our training.
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