day trader

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Day Trader

An investor who makes many trades throughout a trading day, buying and selling securities in order to profit from short-term changes in prices. For example, a day trader may buy Stock A at $15 per share because he/she believes it will be $25 a few minutes or hours later. The activities in which day traders engage are high risk because there is no guarantee that the price will move in the desired direction. However, day traders provide a great deal of liquidity to the market.

day trader

A speculator who buys and sells securities on the basis of small short-term price movements. Day traders are thought to add a measure of liquidity to the market.

Day trader.

When you continuously buy and sell investments within a very short time, perhaps a few minutes or hours, and rarely hold them overnight, you're considered a day trader.

The strategy is to take advantage of rapid price changes to make money quickly.

The risk is that as a day trader you can lose substantial amounts of money since no one can predict how or when prices will change. That risk is compounded by the fact that technology does not always keep pace with investors' orders, so if you authorize a sell at one price, the price it's actually executed at may be higher or lower, wiping out potential profit.

In addition, you pay transaction costs on each buy and sell order. Your gains must be large enough to offset those costs if you're going to come out ahead.

References in periodicals archive ?
This has led many individual investors to aspire to become day-traders, seeking ''efficient management of their funds on hand.
Many people aspire to become day-traders, dreaming of making an instant fortune.
Many more day-trader wannabes are on the waiting list.
I don't belittle day-traders, because it takes a lot of discipline and a certain mind-set,'' she said.
Right out of the gate, Rick Zulawski, a 43-year-old toolmaker from Canoga Park and an avid day-trader even when he isn't playing stock-picking contests, surged to the front.
We feel Jack Carl is that partner and has the expertise to offer day-traders the best in the industry.
Team Futures has the knowledge and breadth of trading information available to them to assist day-traders with the best the industry has to offer.
As our partnerships with online brokers expand, we continue to seek partners like NetFutures who embrace the latest technology and provide day-traders with the best the industry has to offer," said Mark Imperiale, president of DBC.
With the release of MetaStock Pro, day-traders have the benefit of analyzing the market in a real-time environment where they can make split-second decisions.
DBC has long been the leading choice of individual investors and day-traders and we are pleased to be partnering with them," said Cannon Trading Vice President Ilan Mayer-Levy.
Clients receive data through their PCs and laptops anywhere via phone lines or wireless connection, making it possible for day-traders to easily track their portfolios from their offices, homes or while traveling.