What is a Day Trader?

A day trader attempt to make money in the market by trading the market while it is open. They will enter and exit trades before the day is closed that is why it is called day trading.

Every day the stock market moves, either up or down. These traders take advantage of this move by shorting the stock when it is going down and buying when the stock is going up. They will use technical indicators to catch these movements.

The benefit of day trading is that you can make money regardless of the direction the market goes. Day traders also benefit because of compound interest. The shorter the time frame the more compound interest will add up.

Day trading has one major disadvantage. This is the fact that the commissions can greatly hurt the ability to make a good income. Because this type of trading is shooting for pennies anyone who does it has to be aware of the commission cost.

If this becomes a problem They either have to get a broker that has low commissions or learn how to trade bigger moves.