Understanding how financial markets work is crucial to making sure that global and economic markets are stable. Market participants (traders) vary due to their capital endowment, financial motivation and the type of trading activity. Each activity is also subject to different regulations depending on how sensitive it is and the country that it is based.

One of the trading strategies that many traders have come to love is day trading. This is a process whereby you buy and sell stocks on the same trading day. This is different from other types because the trading activity continues even after the marketing hours have closed.

Traders that buy and sell using this method of trading are called day traders. The time allows you to run dozens of trades in a single day or run a single trade. You might decide to buy a stock the first day and then sell it the next day, that is if you realize that selling the same day might not prove profitable.

The standard practice is for traders to close trades at the end of the day. Trades usually last a few minutes or seconds. These traders do this because they want to avoid any risks that arise out of price gaps between the closing price on the day of buying the stock and the opening price of the next day.

Just like any other day, these traders make quick profits and also quick losses in such a short period of time. The good thing is that day trading gives you a chance to make decisions based on analysis of patterns.

Day traders study the general market and the price and volume movement of the stocks. They then use fundamental and technical analysis to keep themselves abreast with the latest news items in order to make the right decisions.

With the right decisions come better profits and satisfaction from all you do on the market.

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