In the stock market today, you will find many traders who are trading stocks, currencies, commodities, or futures and options. If the trader buys and sells stocks through out the same day, they are known as a day trader.  Normally, day traders will be well educated and well funded, with access to high amounts of leverage. They use short term strategies and use large amounts of capital to take advantage of very small price movements in stock picks that are highly liquid. Day traders are professionals at what they do. They do not trade as a hobby, but as a serious way of earning a living.

Before anyone decides to become a day trader, they must understand market fundamentals or they will end up losing a lot of money. To be a day trader, you must have risk capital available; if you cannot afford to lose money, you should not attempt it. Professional day traders use large amounts of capital that they can afford to lose. This allows them to invest without feeling emotions from the possibility of losing. It is not the same as putting $2000 into a stock pick and then holding it over time. Day traders also use several different strategies, such as swing trading or arbitrage, to name a few. These strategies have been refined until they became a commonplace, so do not expect to have the same knowledge after a few tries.

Discipline is vital in order to be a successful day trader. You have to set a plan and stick to it; otherwise, you will end up losing money. There are two types of day traders; one who works for an institution and is known as an institutional day trader, and the other is known as a retail day trader. Both do the same thing, but an institutional trader will have an edge over the retail day trader. This is because they have access to much larger amounts of capital to trade with, and they have access to better tools and technology. They will also have the ability to execute their order faster, as they have a direct line to a trading desk.

Investors wishing to day trade will have to increase their stock picking abilities so that they can choose the right stocks for short term positions. Technical analysis is necessary as it allows you to analyze stock charts and watch the market for any movement. A day trader will follow many different sources for news so that they can get in or out of a stock before the news reaches the markets.