When some people think of successful day traders, they think of multimillionaires lounging in a beach town, making trades and relaxing. That reality is rare, and day trading isn’t as easy or lucrative as it might seem from the outside. Despite challenges, some people elect to day trade as a part-time job, or they take on day trading as their full-time gig. If you know your stuff and follow a strategy, you can make money over time through day trades.
If you’re interested in the idea but unsure of how to become a day trader, we’ll take you through the steps. We spoke with experts about the perks and perils of day trading, and they shared insights on how someone can break into the industry.
Day trading refers to buying and selling securities and stocks, then selling them within the same day with the goal of making a profit. At the close of the market day, a day trader will have closed all their positions and realized any gains or losses.
Day trading is the opposite of a long-term investment strategy, in which one holds stocks or securities in hopes that they appreciate in value over time. Instead, day trading is about buying the dips and selling high in the short term – the long-term prospects of a stock or security mean far less than immediate volatility.
Day trading can be risky. Day traders are inevitably going to lose money on trades, and it can be quite difficult to become a profitable day trader.
A day trader is someone who buys and sells stocks and securities in a single day, hoping to make a profit on short-term activity. Day trading can be risky.
What is a swing trader? A swing trader is similar to a day trader, but they are not the same. A swing trader makes trades over multiple days in hopes of profiting off longer-term fluctuations in the stock market. Swing traders may sell some of their securities one day and buy more a few days later, but the idea is to allow more time for the investment to go through peaks and valleys while still owning it during that process. Normally, swing traders own securities for a few days or weeks. Day traders don’t do this, as they only own securities for a day, although both day traders and swing traders perform a type of short-term trading.