In by morning, out by night:no position left when off goes the light.
A trading style where all positions are opened and closed within the same trading day, avoiding overnight risk.
Day traders rely on short-term price movements and technical analysis.
In plain words
Day trading means opening and closing every position within the same trading day, so that nothing is held overnight. Positions last minutes or hours, and the aim is to capture small moves within the session.
See it move
Position opened, then Position closed
Why it matters
Closing before the end of the day avoids overnight financing charges and the chance of a price jump while the market is shut or the trader is away. It also means many trades, so spreads and commissions are paid often and take a larger share of any result.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A day trader makes 10 trades in a day, each of one standard lot and each costing a spread of 2 pips (invented figures).
- 1Cost per trade = 2 × 10 = 20 US dollars
- 2Cost for the day = 10 × 20 = 200 US dollars
- 3In pips10 × 2 = 20 pips of movement needed to cover costs
Across the day, 200 US dollars is spent on spreads before any trade has gained or lost.
A common mistake
Day trading is sometimes thought safer because nothing is held overnight. It removes overnight risk but adds frequent costs and fast decisions, and the risks of leverage remain in full.
Check yourself
Educational information, not investment advice or a recommendation to trade.