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 ?
Daytraders try to capitalise on price shifts of a few pennies but in sufficiently high volumes so that each trade can be profitable.
A volatile market, with fast-moving prices, gives the daytrader the best chance to make a profit.
Northern has seen a bear market, something most daytraders have only heard about, and it makes a difference in how he views the market.
Actual daytraders may normally enter and exit multiple trades (in the identical stock) throughout one session.
Actual daytraders are going to usually get in and out of the identical equity throughout the course of one trading session.
Hardcore daytraders may usually make many trades in the identical security or group of securities throughout a single trading day.
Normal daytraders will probably ride it out investments a much smaller number of weeks.
Some evidence indicates that the bread-and-butter clients of online brokers,frequent traders -- as opposed to professional Wall Street types or semiprofessional daytraders -- have been the quickest to jump to the sidelines.
Daytraders will basically buy and sell the same old stock throughout the course of a typical day.
Common daytraders could keep stocks a short number of days or weeks.
Disciplined daytraders should not consistently have stocks until the next morning.