Investing Strategies

Day Trading

1

The concept of day trading is very simple, traders buy and sell stocks within 1 day. The timeframe that traders hold a stock for varies, it could be for 10 minutes, it could be for several hours.

2

Day trading is the riskiest investment strategy and it is unsuitable for the majority of investors. This is because stocks are less efficient in the short term which means that they are less predictable.

3

Day traders use technical analysis to make trading decisions and are not so concerned about the business itself. They are looking for statistical anomalies to make money from in the short term.

4

Even though it is very risky, day trading plays a crucial role in finance as day traders provide liquidity to stock markets. This means that investors can always have someone to sell to when needed.

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