Published On: Tue, Feb 5th, 2013

Day Trader

A Day Trader is a non-professional whom trades financial products in his own account.

A Day Trader usually begins each trading period with his entire trading account and margin in Cash.  He then enters and exits trades during the trading period with the intent of accumulating profits during his trading hours.  At the end of the trading session, the Day Trader will then sell all his positions and return to cash.  The intent is to earn a living from the profits generated from the quick entry and exit of positions during the trading day.  Profits (and losses) are greatly enhanced with the use of a margin account.  The margin account can allow the Day Trader to trade anywhere from 1.5x the value of his cash balance to 20x, 50x or even 500x the value of his cash balance, depending upon the market and product he is trading.  The use of margin amplifies even small percentage gains of an investment, which can greatly enhance gains.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.