TRADING GLOSSARY

Day trading: buying and selling within one session

Day trading is the practice of opening and closing all positions within the same trading day, carrying no positions overnight. Day traders seek to profit from intraday price movements using technical analysis, momentum, and short-term patterns.

Requirements

In the US, pattern day traders (those making 4+ day trades in 5 business days) must maintain a minimum of $25,000 in their account. You need a broker with competitive commissions, fast execution, and Level 2 market data. Essential tools include multiple monitors, reliable internet, real-time charting software, and a detailed trading plan.

Common strategies

Momentum trading: Trading stocks with unusual volume or price movement. Gap trading: Trading stocks that open significantly above or below the previous close. VWAP trading: Using the Volume Weighted Average Price as a reference for intraday direction. Scalping: Making many small trades for tiny profits.

The reality

Multiple academic studies show that approximately 90% of day traders lose money over time. The main reasons are overtrading, emotional decisions, poor risk management, and the compounding effect of transaction costs. Those who succeed typically have a systematic edge, strict risk rules, and years of screen time. Day trading is not a get-rich-quick path — it is a highly competitive profession.

AskTrade’s research reports are designed for informed trading decisions, whether you hold for minutes or months.

Disclaimer: This is for educational purposes only and does not constitute financial advice. Trading involves significant risk of loss.

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