Day trading is the term used for purchasing and selling a stock in the same day. A day trader is someone who profits on the stock market by employing day trading strategies. Often day traders will use “margin”. “Margin” is the borrowing of capital through the traders brokerage which enables the trader to purchase more shares than they could have if they only used the amount of money in their account. Often these trades are very short, the trader will buy a very liquid stock and sell on a small price move. Here are some strategies to use if you plan on day trading for a living.The Stocks That Day Traders Trade
Day traders are looking for quick price movements that they can profit on. They prefer stocks that are volatile and liquid. The volatile stocks move up and down more often enabling traders to enter and exit on these swings. Liquid stocks allow a trader to enter and exit a stock with ease. Some stocks always fit this category, others may develop volatility and liquidity with exciting news for the company or sector. Also over time some stocks will stabilize and no longer be acceptable for day trading.
We will also day trade a penny stock if it meets our criteria. Although its not comfortable for many traders.
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