What is Day Trading?

What is Day Trading?

Day trading involves opening and closing all positions within the same trading day to avoid overnight risk. Traders rely on intraday charts, liquidity, and fast decision-making.

Characteristics of Day Trading

• Short timeframes: Execution on 1-minute to 15-minute charts.
• High trade frequency: Multiple trades per session.
• Strict risk control: Tight stops to limit drawdowns.
• Market focus: Typically on major currency pairs with tight spreads.

Day Trading Tips

• Session selection: Trade during London or New York overlaps for optimal liquidity.
• News awareness: Know when high-impact releases can create whipsaws.
• Process before outcome: Grade each trade on adherence to the plan rather than profit alone.
• Technology: Use reliable data feeds and execution tools for speed.

Practical Playbook

• Define context on higher timeframes, then execute on intraday charts.
• Wait for confirmation (acceptance, momentum, or confluence) before entry.
• Size positions conservatively and place stops at clear invalidation levels.
• Adapt to session dynamics; conditions shift between Asia, London, and New York.

Common Pitfalls

• Forcing trades without alignment across timeframe, structure, and catalyst.
• Ignoring spreads/slippage during news or thin liquidity.
• Moving stops or adding to losers instead of honoring the plan.

Illustrative Example

Build a simple playbook: identify bias, mark key zones/levels, define triggers and invalidation, and pre‑set targets for 2–3R. Journal results by session and setup to refine rules. Over time, consistency—not prediction—drives outcomes.

Practical Playbook

• Define context on higher timeframes, then execute on intraday charts.
• Wait for confirmation (acceptance, momentum, or confluence) before entry.
• Size positions conservatively and place stops at clear invalidation levels.
• Adapt to session dynamics; conditions shift between Asia, London, and New York.

Common Pitfalls

• Forcing trades without alignment across timeframe, structure, and catalyst.
• Ignoring spreads/slippage during news or thin liquidity.
• Moving stops or adding to losers instead of honoring the plan.

Illustrative Example

Build a simple playbook: identify bias, mark key zones/levels, define triggers and invalidation, and pre‑set targets for 2–3R. Journal results by session and setup to refine rules. Over time, consistency—not prediction—drives outcomes.