Module 1
Module 1: What Is Day Trading?
Day trading is speculative trading conducted within a single trading day—all positions are opened and closed before the market session ends, with no positions held overnight. This separates it from swing trading (holding days to weeks) and position trading (holding weeks to months).[^1][^2]
Why People Day Trade
Day traders aim to profit from short-term price movements caused by supply and demand imbalances, news catalysts, and institutional order flow. The appeal includes independence, no overnight risk exposure, and the ability to compound small gains over time.[^3][^2]
What Markets Can You Day Trade?
| Market | Hours (EST) | Key Characteristics |
|---|---|---|
| US Stocks (NYSE/NASDAQ) | 9:30 AM – 4:00 PM | High volatility, institutional involvement[^4] |
| Forex | 24 hours (Sun 5 PM – Fri 5 PM) | Largest market, session-based liquidity[^5] |
| Cryptocurrency | 24/7 | Extreme volatility, no regulated hours |
| Futures | Nearly 24 hours (weekdays) | Leverage-heavy, follows underlying assets |
Day Trading Styles
- Scalping: Trades lasting seconds to minutes, targeting 5–20 pips/cents per trade. Requires fast execution and tight spreads.[^1]
- Momentum Trading: Riding strong price moves driven by volume and catalysts. Trades last minutes to hours.[^3]
- Break and Retest Trading: Waiting for price to break a key level, then retesting it before entry.[^6]
- Supply and Demand / Price Action Trading: Trading off pure price structure and institutional order flow zones.[^7]
Checkpoint Quiz
Quick self-check to lock in the concepts from this module.
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What distinguishes day trading from swing trading?
- Day traders close all positions before the session ends
- Day traders only trade stocks under $10
- Swing traders must use leverage
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Which market operates 24/5 and is session based?
- Forex
- NYSE
- Crypto