Day Trading
Same-day trades. Enter and exit within market hours. No overnight exposure.
Day trading captures intraday moves without sleeping in positions.
What Is Day Trading?
| Aspect | Value |
|---|---|
| Holding period | Minutes to hours |
| Targets | 0.5-3% |
| Frequency | 1-10 trades/day |
| Stress | Medium-High |
| Focus | Intraday timing |
Best Markets for Day Trading
| Market | Why |
|---|---|
| Stocks | Liquidity, volatility |
| Futures | 24 hours, liquid |
| Forex | 24 hours, liquid |
| Crypto | Volatile, 24/7 |
Day Trading Setups
1. Morning Reversal
- Market opens
- First hour sets range
- Reversal trade
2. Breakout
- Consolidation breaks
- Volume spikes
- Momentum entry
3. Pullback
- Trend continuation
- Pullback to key level
- Resume entry
Day Trading Rules
Market Hours
| Best Hours | Why |
|---|---|
| 9:30-10:00 ET | High volume |
| Overlap sessions | High volume |
| 3:00-4:00 ET | Pre-close moves |
Avoid
| Avoid | Why |
|---|---|
| Pre-market open | Low liquidity |
| Close (last 15 min) | Unpredictable |
| Low volume hours | Slippage |
Entry Rules
Criteria:
☐ Intraday trend identified
☐ Level marked
☐ Signal present
☐ Risk defined
Risk Rules
| Rule | Value |
|---|---|
| Max risk per trade | 0.5-1% |
| Max daily loss | 3-5% |
| Max trades/day | 5-10 |
Day Trading Checklist
☐ Market open ready
☐ Levels marked
☐ Trend identified
☐ Entry trigger ready
☐ Exit plan defined
Common Mistakes
1. Holding Overnight
Problem: “Let me see tomorrow.”
Result: Gap risk.
Fix: Close all positions by 4 PM.
2. Revenge Trading
Problem: “I’ll make it back.”
Result: More losses.
Fix: Take break after loss.
3. Overtrading
Problem: “I have to trade.”
Result: Trading noise.
Fix: Wait for setup.
Key Takeaways
- Same-day closure — No overnight
- Intraday focus — Timing critical
- Morning best — High volume
- Daily limits — Protect account
- High discipline — Required
Related
scalping.md >>>
swing-trading.md >>>
Enter day. Exit day.