Day Trading - Stock Traders Glossary Terms

Yes, you have guessed right, I am a day trader, not only a day trader but a pattern day trader! Day trading is a type of trading strategy that involves buying and selling a security, such as a stock, within the same trading day. The goal of day trading is to profit from short-term price movements in the market. Day traders typically use technical analysis and charting tools to identify potential trading opportunities, and may use leverage or margin to amplify their potential profits (and losses).

In order to be considered a day trader, you must make at least four day trades within a rolling five-business-day period, and your day trading activities must account for at least 6% of your total trading activity in that same period. If you meet these criteria, you will be classified as a pattern day trader (PDT) by the Securities and Exchange Commission (SEC), and will be subject to additional regulations and restrictions.

Day trading can be risky, as it involves making trades based on short-term price movements that can be difficult to predict. Day traders must be disciplined, patient, and able to manage their risk effectively in order to be successful. Day trading is not suitable for everyone, and should only be attempted by experienced traders who have a solid understanding of the markets and their own risk tolerance.

In summary, day trading is a trading strategy that involves buying and selling a security within the same trading day. Day traders aim to profit from short-term price movements, and use technical analysis and charting tools to identify potential trading opportunities. Day trading can be risky and is subject to additional regulations and restrictions for pattern day traders.