Day Trading: What You Need To Know

August 16, 2022
Photo by Jason Briscoe on Unsplash

The world of trading has certainly changed quite significantly in the past couple of decades. Once upon a time, it was impossible for everyday folks to engage with the stock market. The only people who could benefit from stock trading was big shot finance guys. However, thanks to certain developments in technology and computer science, that all has changed. Online trading platforms have made it possible for the Average Joe to get to participate in the world of finances and make some extra cash on the side.

What are Online Trading Platforms

As the name suggests, online trading platforms are venues through which anyone can place investments on certain stocks. Websites like the one found here offer excellent tutorials, features and easy-to-use interfaces that make it possible for anyone to go online, look up stocks at given companies, and buy their own share.

Online trading platforms tend to put utmost emphasis on cyber safety and security. They use state-of-the-art encryption technology to make sure that their user base remains safe when using their services. This is just one of the reasons that many people have become more and more interested in stock trading.

The best part is, that online trading platforms tend to cover multiple markets. Most notably the stock market. However, the Forex Market and the Crypto market are also a huge part of most online trading platforms as well.

And another thing that has made these platforms so popular is their day trading feature. So, just what is day trading? In this article, we will discuss everything you need to know about the concept.

What is Day Trading?

Some of you might have already gathered just based on the name, but day trading refers to the practice of buying and selling an asset within one trading day. The idea is to exploit the volatility of the market, in hopes of making profit.

Day trading may sound simple, but putting it to practice is actually quite complicated. It requires a savvy mind and a deep knowledge of the market, as it is important to be able to predict which falling stock will rise by the day’s end. So, it is not recommended that you should start out with day trading.

Before you get to day trading, take some time to familiarize yourself with the markets, stocks, and assets you are investing in. Once you’ve done so, and have garnered some experience, then you can try our hand out at day trading.

Popular Markets for Day Trading

So, now that you know what day trading is, the natural question is, “What markets can be used for day trading?” The truth is that day trading can be applied to pretty much any market, however, there are some that lend themselves to the concept better than others.In this section, we are going to look over a few markets that lend themselves well to day trading.

Forex

The most popular market for day traders seems to be the Foreign Exchange Market. For those not in the know, the foreign exchange market (or forex) refers to exchanging currencies. To put it plainly, if you have ever travelled abroad and needed to exchange one currency to another, you’ve participated in this market.

The value of currencies changes daily, so it is not surprising that day traders tend to exploit the volatility of currencies in order to make a buck. The most popular currencies to trade on the forex market are dollars, yen, pounds sterling and, of course, the Euro.

Stock Market

The stock market is probably the trading market that most are familiar with,so naturally, it is also hugely popular among day traders. As the name suggests, the stock market deals with acquiring, aggregating or selling off stocks within a certain company.

Much like fiat currency, stocks tend to be volatile (though admittedly not as volatile as currencies). Day traders will purchase stocks in a given company that they believe will rise by the day’s end, and then sell them off before the day ends, in order to turn a profit.

Cryptocurrency

Lastly, we are taking a look at the newest trading market on this list. Cryptocurrency has seen an explosion in popularity in the past couple of years. Crypto traders, investors and supporters are growing by the day, and mainstream culture is beginning to embrace the concept more and more. So, how does day trading of cryptocurrency work?

Much like FIAT currency, cryptocurrency is extremely volatile (even more so than FIAT money). So, a savvy crypto trader might be capable of predicting which cryptocurrency is going to grow in popularity and which one is going to plummet. Once that is done, it is a simple matter of buying and then selling the crypto, and making an easy buck.

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