Understanding How the Day Trading Market Works

Different media outlets will allow the investor to know which companies will publish a press release, announce a news item or any other information or rumor that could have an influence on their securities. This information will also make it possible to discover which securities will have a high liquidity during the session and an especially high volatility. Many press releases are published after the close of the previous day, and some hours before the opening of the next.

Note that the first thing that a day trader seeks is volatility, which is a mathematical measure calculating the difference between the highest and lowest prices in a trading session. The more volatile a value, the greater the potential gain. After having looked at the securities he or she plans to buy, his or her day trader can start trading their securities.

Opening

The typical day of a Day Trader begins before the trading session and ends well after the close of trading. Managing your money through day-trading requires time, resources, technical and fundamental knowledge as well as cold-bloodedness and good sources of information. Indeed, day trading consists of following as closely as possible the evolution of the financial markets to invest throughout the day by multiplying operations, and by calculating, if possible, all the positions opened before the end of the trading session.

This style of trading is risky and ca, therefore, be synonymous with strong losses, but also strong capital gains. Rockwell Trading’s Facebook Page has more information on this. While the Parisian or Tokyo stock markets were showing in the green, an unfavorable opening of Wall Street can cause them to go into the red (and vice versa). Reacting quickly can save people heavy losses or, on the contrary, they could benefit from significant capital gains.

Closing the market

The day trader falls asleep often after the closing of the US market. As the Japanese market has little influence on the European market, the influence of the US market is paramount on the opening of European markets. Bad news after the US closes may influence the opening of another stock market a few hours later.

A day trader must therefore remain focused throughout the day to take full advantage of the opportunities available.