About Day TradingLearn More

Day trading is the practice of purchasing and selling a security within a single trading day. A day trader can deal in a wide range of securities, including stocks, options, forex, cryptocurrencies, exchange-traded funds (ETFs), and even bonds. This type of trading became widely accessible in the 1990s and early 2000s with the creation of online trading platforms that moved the opportunity to trade from stock exchanges and brokerage houses to the internet. Before attempting to buy and sell securities online, novice traders should have a good understanding of how to identify market trends and directions, as well as an interest in learning how the global financial markets work. While there are professional day traders who work for financial institutions, day trading is also a solo activity that you can do at home on any computer or mobile device with access to a brokerage platform or trading software.

Unlike investing, day trading is not a long-term investment strategy. Rather, day traders are looking for a quick-turn-around and a short-term profit from the buying and selling of securities. A skilled day trader will know how to take advantage of market fluctuations. Investors, on the other hand, usually ride out those fluctuations with the expectation that their money will grow over time. Successful day traders focus on buying and selling securities throughout a single day, while successful investors monitor a portfolio of stocks, bonds, and other securities over the course of years. Another significant difference between day trading and investing is the participant’s purpose. A day trader is looking to generate income in the short-term, perhaps as a supplemental source of income. Investing is a way to build wealth over the long-term. Investors are often looking to build up retirement accounts, for example.

Day trading is an accessible activity for those willing to put in the time and effort it could take to familiarize themselves with the core principles and tools such as chart patterns, algorithms, and trading software. Contrary to what some may believe, day trading doesn’t require an MBA or many years on the floor of a major stock exchange. In fact, no one needs to be an expert in technical analysis. For those without any prior finance or trading experience but a keen interest and the right amount of information, learning the essentials could offer enough preparation to try your hand at day trading with confidence. Udemy offers courses for both the novice day trader seeking a basic introduction to this potentially lucrative practice and the seasoned day trader interested in advanced trading strategies.

A novice day trader should have basic financial research and analysis skills. Understanding both will provide a good foundation for selecting the proper applications, managing risk, and utilizing technical analysis — which focuses on historical price movement, analyzing current market conditions, and identifying potential market changes. You should also learn how to select the stocks you want to trade and create a day trading plan. It would also be helpful to acquaint yourself with effective trading techniques; Udemy offers a variety of courses that highlight strategies that you could find useful once you’re ready to start trading. Although day traders come from a variety of backgrounds, most share one common characteristic: self-sufficiency. Day traders often have the drive to create a new source of income trading from home and the potential to generate profit in a short amount of time.