Day trading
A trading style in which positions are opened and closed within the same day, so none are held overnight. Trades usually last from minutes to a few hours.
Day traders aim to finish each day flat, with no open positions. That avoids overnight swap charges and the risk of a gap when markets reopen, but it brings its own costs and pressures.
Where it sits among styles
- [Scalping](/glossary/scalping): very short trades, seconds to minutes, many per day.
- Day trading: minutes to hours, closed before the end of the day.
- [Swing trading](/glossary/swing-trading): days to weeks.
- Position trading: weeks to months.
Costs matter more
Because day trades target smaller moves, the spread and commission take a bigger share of each potential gain.
Worked example, illustrative: a day trader aims for 20 pips per trade on EUR/USD and pays an all-in cost equal to 1 pip. Costs take 5% of each target. A swing trader aiming for 150 pips with the same cost gives up less than 1%. Over hundreds of trades a year that difference adds up.
Practical notes
- Many day traders focus on the busiest hours, such as the London session and the London/New York overlap, when spreads are usually tightest. See forex market hours and sessions and the market hours tool.
- Scheduled data releases can cause sudden moves and wider spreads in the middle of the day.
- Frequent decision-making under time pressure is tiring and invites mistakes such as revenge trading. See trading psychology.
Day trading is not a shortcut. It demands a tested plan, strict position sizing and honest record-keeping.
Not investment advice. This is general information and education, written without knowledge of your circumstances. It is not a recommendation to buy or sell any instrument. Past performance is not a reliable indicator of future results. Trading leveraged products carries a high risk of losing money. Risk warning