1. Introduction to Stock Trader Types
  2. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  3. Decision-Making Methods: Informed, Uninformed, Intuitive
  4. Informed Traders: Fundamental Traders, Technical Traders
  5. Swing Traders
  6. Buy and Hold Traders
  7. Value Traders
  8. Trend Traders
  9. KISS Traders
  10. Momentum Traders
  11. Range-bound Traders - Break-out Traders - Channel Traders
  12. Options Traders
  13. Options Seller Traders
  14. Day Traders
  15. Pattern Day Traders
  16. Intra-Day Traders
  17. Intra-Day Scalp Traders
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion

The work of a day trader is very busy, to say the least. These traders enter into and exit numerous positions over the course of a single day. Their trading is defined by the fact that they never hold positions from one trading day to the next. They are “intra-day” traders, meaning that they execute multiple trades over the course of a single day.

These traders may work in stocks, options, currencies, futures, and more. It’s even possible to find day traders operating in cryptocurrencies nowadays. They usually hold their purchases for seconds or minutes before making adjustments, either by buying more or selling what they have.

There are two general types of day traders: institutional and retail. They would both be classified as speculators, rather than as investors. (For more, see What is the Difference Between Institutional Traders and Retail Traders?)

Institutional day traders

These traders work for financial institutions, meaning that they have a number of advantages over their retail counterparts. They have access to solid pools of resources and tools, as well as large amounts of capital and leverage.

Retail day traders

Retail traders work either for themselves or in a smaller partnership with a number of other traders. They usually operate with their own capital, and there are often laws which restrict the amount of money borrowed from other people they may use for investments.

Most day traders, both of the institutional and the retail categories, work as traders full-time. They tend to spend the whole day at the computer buying and selling stocks, generally through deep analysis rather than emotional decision-making.

Advantages and disadvantages of day trading

A day trader looks to make profits by capitalizing on small price movements in stocks or indexes which are highly liquid. Thus, they prefer highly volatile market conditions. They are also able to adapt to all types of market conditions, giving them an edge over longer-term investors.

Most day traders set strict rules for themselves, including notices to buy or sell based on volume, time limits, and breakout ranges. Of course, day trading is a highly risky endeavor, requiring deep knowledge of which stocks to trade, when to trade them, and how and when to get out of the trade. One disadvantage for the casual day trader is that they will be up against institutional traders with deep reserves of experience and support, making it that much harder to earn a profit.


Pattern Day Traders
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