Day trading definition

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Day trading is a strategy of short-term investment that involves closing out all trades before the market closes. As such, day traders tend to have no open positions held overnight.

Traders who attempt to profit from intraday trades do so by taking advantage of small movements in price. By using financial derivatives, they are often able to trade on markets that are making negative moves as well as positive ones.

Day traders can speculate on a variety of markets, including stocks, forex, commodities and futures. The rise of trading technology and increased prominence of margin trading that amplifies both profits and losses has made day trading more popular in recent years.

CFDs are useful products for day trading. As leveraged products, they can be used to take both long and short positions on various markets.

How to start day trading

In order to start day trading, you'll first of all need an account with a trading provider. You can open an account with IG in minutes, and once you do there's no obligation to fund or trade.

After your account is open, you can find your first opportunity. It is important to decide on a day trading strategy and research your market’s opening hours — while forex trading hours are 24-hours, other markets daily hours will vary.

Find out more about day trading strategies.

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