Sunday, December 23, 2012

eToro : What is Day Trading?

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What is Day Trading?

December 22nd, 5:22 pm by Brett Chatz 

By its most narrow definition, day trading is a type of trading activity where investors enter and exit a trade in the same day.  Although traditionally day trading has been seen has a high risk activity, many experts now believe it involves less risk than other types of trading.  Day trading is also called short-term trading.  This is because day trading has a very negative connotation.  Surprisingly, short-term trading, intermediate and long-term trading require similar trading strategies.


Every trading strategy involves the use of charts whether it is long-term or short-term trading.  When traders understand how to read charts, they can use a similar strategy for various time frames – from retirement planning to day trading.  There are also other terms that are used to describe intermediate and long-term trading.  Day trading is also known as short-term trading, swing trading is intermediate and momentum trading is long-term trading.  Swing traders usually hold their open positions for several days while momentum traders hold their positions for months or years.  Ultimately, traders just need to understand how to determine trends and when a price moves to a position that warrants a trade.  This may take years, months, days or minutes depending on the trading time frame.  Below is an image of a short-term trading chart with a 30 minute time frame from eToro.

 Alternative Trading Options

Investors have a variety of trading options available to them.  They can choose to trade in commodities, currencies, equities, indices or even develop a wealth management trading portfolio.  These types of portfolios are great for traders who are not as active but wish to diversify their portfolio.  Traders have many different options that will fit their trading style and allow them to build their investment portfolios.  The most important foundation for every trader is to learn how to read charts and perform analysis.  This will allow traders to use any type of trading style including short-term trading.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Visit Us


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