Glossary · from the DESK dictionary
Day Trading
Opening and closing positions within the same trading day, avoiding overnight risk.
In plain words
By the end of the trading day, all positions are closed — nothing held overnight.
In more detail
Day trading denotes opening and closing positions within the same trading day, with no overnight risk. Avoiding gaps is the genuine structural advantage — in exchange the trend component that longer-horizon approaches draw their return from disappears. Costs decide: across twenty daily trades, spread, commission and slippage add up to a hurdle a strategy must clear before any profit exists at all.
Example
A trader makes 20 trades a day at 3 dollars of total cost each — 60 dollars daily, 15,000 a year. On a 50,000 account the strategy must generate 30 percent just to break even.
What it means for traders
A widespread but demanding trading style that requires full attention during market hours.
Common pitfalls
Empirical studies show the vast majority of active day traders lose money over the long run.
Related terms
Day Trade Buying Power (DTBP) · Day Trader · Intraday Trading · Overtrading · Swing Trade · Swing Trading
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.