A day trader is a trader who executes short and long trades to forex-definição on intraday market price action. There is no special qualification required to become a day trader.

Instead day traders are classified based on the frequency of their trading. A day trader often closes all trades before the end of the trading day, so not to hold open positions overnight. A day trader is primarily concerned with price action characteristics of a stock. Price volatility and average day range are critical to a day trader. A security must have sufficient price movement for a day trader to achieve a profit. Volume and liquidity are also crucial because entering and exiting trades quickly is vital to capturing small profits per trade.

Securities with a small daily range or light daily volume would not be of interest to a day trader. Day traders are traders who execute intraday strategies to profit off price changes for a given asset. Day traders employ a wide variety of techniques in order to capitalize on market inefficiencies. Day traders are attuned to events that cause short-term market moves.

Trading the news is a popular technique. Another trading method is known as fading the gap at the open. When the opening price shows a gap from the previous day’s close, taking a position in the opposite direction of the gap is known as fading the gap. For days when there is no news or there are no gaps, early in the morning, day traders will take a view on the general direction of the market. If the market is trending down, they would short securities that exhibit weakness when their prices bounce.

Most independent day traders have short days, working two to five hours per day. Often they will practice making simulated trades for several months before beginning to make live trades. They track their successes and failures versus the market, aiming to learn by experience. The offers that appear in this table are from partnerships from which Investopedia receives compensation. A pattern day trader is a SEC designation for traders who execute four or more day trades over a five-day period. The average true range – ATR is a technical analysis indicator that measures volatility by decomposing the entire range of an asset price for that period.