Day Trading

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Definition of 'Day Trading'

Day Trading, as the name implies, is a trading technique where a stock, future, option or commodity is bought and sold on the same day. A day trader is a trader who practices this type of trading. Day trades last from minutes to hours and are by definition closed out by the end of the trading day.

It is said that this is a highly speculative practice and that as many as 90% of all day traders lose money.

If a day trader holds a position overnight to the following day then that trade is reclassified as a swing trade. This might happen, for example, if the market closes before the trader manages to close their day trade.

Related definitions:
Scalp Trading
Swing Trading
Day Trading
Pattern Day Trading (PDT)

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