Educational Post What is Day trading? Day trading might be t | Crypto VIP Signal

Educational Post

What is Day trading?

Day trading might be the most well-known active trading strategy. It’s a common misconception to think that all active traders are by definition day traders, but that isn’t true.

Day trading involves entering and exiting positions on the same day. As such, day traders aim to capitalize on intraday price movements, i.e., price moves that happen within one trading day.

The term “day trading” stems from the traditional markets, where trading is open only during specific hours of the day. So, in those markets, day traders never stay in positions overnight, when trading is halted.

Most digital currency trading platforms are open 24 hours a day, 365 days a year. So, day trading is used in a slightly different context when it comes to the crypto markets. It typically refers to a short-term trading style, where traders enter and exit positions in a timespan of 24 hours or less.

Day traders will typically use price action and technical analysis to formulate trade ideas. Besides, they may employ many other techniques to find inefficiencies in the market.

Day trading cryptocurrency can be highly profitable for some, but it’s often quite stressful, demanding, and may involve high risk. As such, day trading is recommended for more advanced traders.