Traders mostly trade in derivatives such as futures, options, or CFDs. The name of such securities originates from the fact that they are based on a certain underlying. They are very suitable for trading in levers. Daytrader shares are used less frequently because more own capital is required for this.
Most day trade (Day trade which is the term in Thai) traders are active in the currency market (Forex market). For example, in the news that the euro has appreciated against the dollar, it is this special market of currency pairs. This is characterized by a very high volume and can be traded around the clock, 7 days a week. The high liquidity makes the Forex market the most efficient financial market in the world.
What Strategies Are Day Traders Pursuing
Day traders have the opportunity to benefit from both rising and falling prices. If you buy a stock and later sell it at a higher price, you are in a long position. In that case, you win when the price goes up.
The “short” position, on the other hand, is far less known. In this case, traders make a profit when the price falls. Technically speaking, it is a loan transaction, where the sale of a security takes place before the purchase. For this, a day trader borrows z. B. a share and sell it immediately. If the price falls, he can buy it back at a lower price. The trader can book the difference as a profit.
Many traders have a strategy called event trading. To do this, they focus on relevant news that can cause price changes in the financial markets. Examples of this include key interest rate decisions by the central banks or employment market figures from the USA. If the published data on this is better than most market participants expect, the trader takes a long position. On the other hand, if they are worse, a short position is built up.