A day trader is one who plays the forex market by entering and closing during the course of the day.

Quite simple, but is simplicity the only reason many traders are enticed to play day trading even if round-the-clock trading is now a reality online?

You would be surprised by the revelations shared by active day traders about the benefits of playing the forex market as a day trader. Here are the juiciest bits:

• Ability to Capitalize on Market Volatility: Day traders rack up big bucks during price swings within the trading day.As players gain experience in day trading, they develop an eye for predicting swing patterns. Historically, market volatility opens up many opportunities during the single-day time frame. With the increasing reliability of market forecasting, informed and vigilant traders are exposed to many opportunities to make profit.

• Effective Margin Usage: Day trading allows for more effective use of margins. Many brokers now charge less interest on money their client traders borrow to buy securities if clients close out before the end of the trading day. Some brokers even do not charge any interest at all.

• Less Anticipation, Hence Less Stress: Day traders tend to sleep better at night knowing the results of their day’s efforts. They sleep and rest better since they do not worry about what will happen the next day on their trading position. This translates to less stress.

• Lower Margins: Margins are often lower for day trading than when players choose to hold their trade overnight.

• Lower Trading Costs: Broker commission tends to be lower in day trading and this provides traders the opportunity to make profits even for relatively small price swings.

• Minimized Risk: The approach practically negates any risks concerning overnight fluctuations which might affect a trader’s position since trade is closed out before or at the end of the day.

• Non-Monetary Benefits: The appeal and challenge of day trading lies in the competition. Most people are at their intellectual peak during the daytime and therefore benefit more from their cerebral vigor. Moreover, the joy of making even small profits becomes even more invigorating during the day when traders’ energy is also at the peak.

Moreover, day trading exposes traders to more diverse markets owing to the activity and volatility in the daytime frame. This, in turn, offers more opportunity to make more money from trading.

But then, every golden opportunity comes with very hard work, some costly surprises, unpredictable income, a lot of competition, and stress.

Day trading also tends to siphon off your energy because you just don’t set off for the forex market and expect to be a millionaire (i.e., if you are not yet one) at the end of the trading day.

You got to do your homework, have a strategy, and learn to forecast trends with the aid of technology.

Postscript

With all the hype and the pitfalls of day trading, it draws forex players like a magnet. Some say, it’s not just about the money. It’s the thrill of the chase. Perhaps, maybe it’s the adrenaline rush.

Everyone who’s in it however, chorus on one single motivation to day trade – enjoyment. If you got what it takes to enjoy or at least bear the hypes and plummets of price movements whichever end you are, day trading is for you.

Content Credit: www.admiralmarkets.ae