Day trading signifies buying and selling of financial instruments in a single working day of a stock exchange. The financial analysts who participate in Day Trading are called Day Traders. Day Trading was initially reserved for stock brokerage firms and professional investors, but with the advent of online stock trading, day trading has become the buzzword for general investors who even trade from their homes.

Day trading comprises different styles of trading. The styles are defined according to the time frame. In Short Term Trading like Scalping the focus is on small returns because in this form of trading the stocks are held for a very short time within which they are purchased and sold. The other extreme of Day Trading is Long Term Trading or Position Trading where stocks are held all throughout the day.

Day Trading also comprises different types of trade such as Ranging Trades, Trend Trades and Counter Trend Trades.

Trend Trades operate on the basis of the current price movement. A good reference of Trend Trades is buying of stocks if the market is bullish. In Counter Trend Trades the pendulum swings in the opposite direction, a trader would sell the stocks when the market is bullish. In Ranging Trades a trader adheres to both Trend Trades and Counter Trend Trades.

Moving averages, current market price calculations, and channel breakouts are used to determine the trend of the market. It is important to note that Day Traders who believe in Trend Trades do not try to forecast future markets or prices they simply Trend ride the trend in an attempt to maximize profits when prices are high in order to minimize losses at low points in the trend.

Day Traders can also be segregated on the basis of the number of trades they do. Few Traders indulge in many trades and there are some who makes only one trade and would hold it for the entire day till they don’t come across the best deal.

There are some other strategies as well according to which Day Traders attempts to earn benefits. The most important among them is Shorting Stock. It is a technique in which a Day Trader would borrow stocks from another broker and would sell them. He hopes that this would bring down the prices of the overall shares and would offer him an opportunity to buy shares.

Each school of thought related to Day Trading has its shares of pros and cons. In some cases profit is garnered on investor behavior while some follow the trend.