In finance, a day trader is someone who buys and sells financial instruments such as stocks, options, futures, derivatives, and currencies. A broker, who simply fills out the orders that are asked for, whether buying or selling is not a trader, the broker is there to simply execute any orders that a trader or an investor has requested. A trader is a professional who works either in a financial institution or on his or her own.
What is a day trader?
In institutions, the remuneration for traders tends to be high when compared to other professions, because of the bonuses they charge at the end of the year, which are according to what they have earned for the institution. The key difference that exists between an investor and a trader is the length for which a person maintains their asset. Stakeholders usually have longer-term goals over time, while traders will hold assets in the short-term to exploit short-term trends.
Understanding the field
If the trader operates in a one-day time frame it is called an intraday trader or day trader. A day trader buys and sells financial instruments traded on the stock exchanges around the world and does so on the same day they are traded so that all positions will be closed before the market closes on the trading day. Therefore, he or she does not maintain any assets during the night.
The day trader usually makes around 25 to 250 stock trades in one day. There are also swing traders, whose operations are less frequent, and can last from a couple of days to a few months. To learn more about this, go to Rockwell Trading on Facebook.
Day trading is the future
Until a few years ago, most day traders were institutional traders. However, the rise of technology in the second half of the 1990s has provided the market with various advancements in information technology and communications. This accessibility has led to online trading having easy access to powerful analytical tools.
In addition, the low and accessible commissions of brokers have also helped people make money performing trades with the possibility of success for many and the achievable reality for even more individuals.