Day Trading

If a person is both buying and selling shares or other financial instruments within one trading session of an exchange then the person is called a Day Trader. The activity is called Day Trading.

Day trading is typically very risky as it relies completely on short-term changes in the quote of the financial instrument. News during the day may or may not have an influence on a quote. In the age of the internet one generally has to assume that any information that is available is available to anyone else as well.

Online broker like day traders. The brokers earn their fees with each sell or buy regardless of whether the trade results in a win or a loss of the day traders.

Margin and On Account

Some day traders are even working with margins. They basically borrow a certain amount of money from the broker (or a bank) and then go trading with that additional money. This gives them an additional leverage effect.

But be aware of the following: The lever can work in both directions. Whether you win or you loose, your debt will remain the same.

Recommendation

We from Blue Note Ventures don't like day trading because of the extreme risks. We believe that only long-term investments represent a sound strategy. Therefore the information provided on this web site is for the long-term investor only.