{"id":429780,"date":"2022-01-06T16:38:59","date_gmt":"2022-01-06T16:38:59","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=429780"},"modified":"2026-02-03T09:37:59","modified_gmt":"2026-02-03T09:37:59","slug":"day-trading","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/share-trading\/share-trading-guides\/strategy\/day-trading","title":{"rendered":"What is day trading?"},"content":{"rendered":"

If the stats are to be believed, the last couple of years have seen a sharp rise in day trading in the UK. A 2021 survey by Consumer Intelligence for GraniteShares found that nearly 1.8 million UK adults dipped their toes into day trading during the pandemic. But while the idea of making \u201ceasy\u201d money trading shares from the comfort of your living room might sound appealing, it\u2019s rarely that easy in practice. Day trading is a risky business<\/a> that\u2019s best suited to experienced investors, and to have a chance of succeeding you need knowledge, dedication, fortitude, and a healthy bank balance. This guide outlines the key things you need to know.<\/p>

What is day trading?<\/h3>

Day trading is the practice of buying and selling investment assets (or \u201cfinancial instruments\u201d as they\u2019re formally known) over a very short time period in a bid to make a profit. Day traders might hold these instruments for anything from a few seconds to a few hours. Assets bought and sold can include stocks and shares on the stock market, currencies on the forex market, or bonds on the bond market.<\/p>

How does day trading work?<\/h3>

When you day trade, each trading period is contained within a single day. You start purchasing at the start of the day and close out at the end of the day, starting from scratch the next day. The idea is to take advantage of tiny market movements by buying and selling multiple assets within the same day, sometimes more than once per asset. The profits you can make per trade will be small, but in theory, should add up over multiple trades.<\/p>

What are the risks of day trading?<\/h3>

All forms of investing carry risk. Markets can be volatile<\/a>, and the performance of companies that trade on the stock market can be affected by a wide range of factors. Many of them, such as the coronavirus pandemic, or even the weather, are outside of a company\u2019s control.<\/p>

Traditional investing strategies<\/a> tend to rely on keeping your money invested for the long-term<\/a>, to ride out any (hopefully short-term) volatility and give markets a chance to recover and grow. Day trading takes the opposite approach and relies on split-second decisions and razor-thin profit margins. Getting it wrong could result in you losing significant amounts of money in a short space of time \u2013 and the very nature of day trading means your investments won\u2019t have time to recover.<\/p>

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Our expert says: What makes day trading difficult?<\/div>\n
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\"First and foremost, day trading requires investment knowledge and experience. A novice trying day trading as their first toe-dip into investment markets is almost certainly doomed to failure. And even experienced investors will find it a very different kettle of fish to traditional investment methods.<\/p>

Nor is day trading a part-time job. It takes time, focus, dedication and a whole heap of research. Markets can flip in a moment so you\u2019ll need to be constantly vigilant and able to predict the moment to buy or sell.<\/p>

Plus, day trading isn\u2019t free. You\u2019ll need to pay for access to a trading platform<\/a> plus fees for the trades themselves. And that\u2019s before you even take into account the potential tax bill on any profits.<\/p>

In short, day trading is not for the inexperienced or the faint-hearted.\"<\/p>\n\n <\/div>\n <\/div>\n\n

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\n \n Zoe Stabler DipFA\n <\/a>\n
Senior writer<\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n

Can I make money day trading?<\/h3>

It\u2019s possible. But most people don\u2019t, especially if they go in without having the skills, knowledge, experience, dedication and grit to succeed. Analysis by different sources suggests that between 70% and 100% of traders lose money. Only a handful of professional retail investors make day trading work for them on a consistent basis.<\/p>

What are the costs associated with day trading?<\/h3>

Putting aside the capital you\u2019ll need for trading, including any minimum initial deposits, you\u2019ll need to pay certain fees to use a trading platform<\/a> and to make transactions. These can include:<\/p>