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Trade During The Day
If you have time to trade during the day, then you might be a good candidate for day trading. However, day trading can be one of the most challenging forms of trading, and we only recommend it for more experienced traders.
People who day trade sometimes refer to it as "scalping" if they are trading off of very short time frames, such as 60-second charts.
On the time spectrum of trading, scalping and day trading are on the far left:
Scalping centers around taking profits on small price changes, typically right after a trade has been entered and has become profitable. To be successful in this style, you need to have a strict exit strategy because one large loss could wipe out the small gains that have been obtained. Having the right tools, such as a live data feed, a direct-access broker, and the time to place many trades is required for this strategy to be successful.
Scalping achieves results by increasing the number of winners and sacrificing the size of the wins. This style is all about quantity over quality.
Day trading has you in and out of a position during the trading day, often trading 15-minute or 60-minute charts. Entry occurs at or after the open of the day and exit occurs before or on the close of the day.
Day traders are looking for big one day moves in the market that provide sufficient profit opportunity relative to the risk of being in the market for just a few hours.
Next to scalping, day trading is the most demanding form of trading, as you have to react very quickly in order to take advantage of abrupt moves in the market and at the same time protect your account from unreasonable risk.
