Day trading definition

Day trading is the practice of buying and selling instruments inside a single trading day. A day trader closes every position before the session ends to avoid overnight gaps, funding costs, and news that breaks while the market is shut.

Day trading runs across shares, forex, commodities, indices, crypto, futures, options, and CFDs. A day trader leans on short-term price action, technical analysis, liquidity, volatility, tight spreads, and fast execution to work small moves repeatedly through the day.

Day trading is high risk, because small moves turn into rapid gains or losses once leverage is involved, and the effect compounds across many trades in a day. A day trader manages it with position sizing, stop-loss orders, a trading plan, and daily loss limits. The flat-by-close rule is what sets the style apart: no position is carried overnight, unlike swing trading, which holds for days or weeks.