Day trading is the name given to all kinds of financial transactions made within a single trading day. Day trading, which involves buying and selling security during the day, is applicable in any market. These types of trading are most commonly done in the forex market and the stock market. In daily trading transactions, investors carry out trading transactions over short-term market movements.
These transactions are not a process that anyone can easily do, and they also carry great risks. As a result of the fluctuations experienced in such factors as interest rates, corporate earnings and economic data that ensure the dynamism of the forex market, such trading investors can turn these fluctuations into great opportunities, as well as suffer great losses with the decreases experienced.
During the opening hours of the exchange, all positions of the daily trading, which is a daily trade, must be closed before the end of the day, ie at the market close. These types of trading investors always aim to make a profit with slight price fluctuations compared to long-term investors.
What Are the Positive Features of Day Trading?
Since these transactions are closed at the end of the day, they are never affected by the adverse conditions in the market due to night movements. Investors who regularly perform daily trading in forex always have access to low commissions and increased leverage. In addition, they can protect their trading positions against excessive movements with strong stop-loss orders. Thanks to the many transactions made during trading in this structure, investors always have the opportunity to develop their experience and experience in the market quickly.
What Are the Negative Features?
In addition to the advantages of day trading in forex, there are also a number of negative aspects. One of them is the obligation to pay more than one commission in transactions that are frequently made during daily trading. Some transactions, such as mutual funds, cannot be done with daily trading. If the margin is used to finance trading purchases of this nature, there may be a rapid increase in losses. Also, in day trading, there is not always enough time to make a profit before a position is closed.