Trader's Glossary

Day Trading

Day trading is the practice of buying and selling an underlying asset within a single trading day, taking advantage of market fluctuations, usually by employing large amounts of leverage, in order to profit from relatively small movements in price. The most common markets for day traders are the Forex and stock markets. Day traders are important as their activities provide liquidity to the markets in which they trade; they also maintain market efficiency by arbitrage. In today’s markets the overwhelming majority of intra-day trades are made by automated trading algorithms.