What is Day Trading?
One of the more popular strategies, day trading involves the buying and selling of financial assets within a single trading day. Traders can choose to buy or sell multiple assets within a single trading session with the aim to capture profits via small price movements.
To be a successful day trader, you need to make quick but informed decisions, with excellent technical support to execute multiple trades in a day. One of the primary requirements is a robust trading platform.
FP Markets offers a wide range of trading tools for complete flexibility, visibility, and ultra-low latency execution. Our MT4, MT5, and IRESS Trader platforms come with efficient risk management tools to help you tackle market volatility.
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How Day Trading Works
Market volatility is what enables traders to earn in the financial markets. It is these frequent price fluctuations that provide opportunities to day traders. These rapid price movements are enhanced by the release of macroeconomic data, breaking news, good or bad company earnings reports or general market sentiment. Liquidity also plays an important part in the successful execution of trades. For example, some currency pairs, like the EUR/USD and GBP/USD, tend to be highly liquid, which means there are multiple sellers and buyers in the market, at the same time.
Traders may go long on an asset, when the markets are rising, and go short when prices fall. The aim is to find numerous entry and exit positions, or even one highly suitable entry and exit point. Whatever the strategy, it has to be executed within a single day.
Being in touch with the latest market news is extremely important for day trading strategies. That is why FP Markets offers a range of educational material and resources:
How to Start Day Trading with FP Markets
Things to Keep in Mind While Day Trading