Day Trading is conceptually the act of trading (speculating) during the same day. Another word for act of Day Trading that is used by brokers is (Intra-Day Trade) which means not holding a trade position past the closing bell of the stock Market. Which is 4:00 for regular markets and 4:15 for the E-Mini markets.
The least capital needed to hold position, which is called (initial margin) is found with Intra-Day trades. In general to trading Futures and Forex has the least Capital at risk ,when doing Intra-Day Trading.
When you hold a position for a short period of time, 1 minute, 5 minutes, or 1 hour or two, this style of Intra-Day is called Micro Trading. TradeFoxx promotes this kind of trading that allows for short periods of exposure to risk, this type of trading can be considered income generation trading.
Another name for Micro Trading also considered called (scalping style), which again is taking profits on small price changes. When micro trading you must have extreme control of your risk, because you are willing to take small profits you must also take small loses. We prefer the use of the term of micro trading because you may be in a trade for 1 hour and that conceptually breaks away from Scalping Style. In general you could use the two terms interchangeably.
If you don’t trade Futures or Forex, you will have to hold a very large bank roll in your broker in the order of 25,000. Day traders tend to trade more than 5 times a day, and if you trade stocks, it will be considered “Patterned Day Trading” which requires higher capital deposited.
Therefore you should stick to futures and Forex is you want to keep you deposits small.
What is a Pattern Day Trader?
A pattern day trader is a regulatory designation for traders or investors that execute four or more day trades during five business days’ time and in a margin account. The number of day trades must constitute more than 6% of the margin account’s total trade activity during that five-day window. The PDT designation is in place to discourage investors from trading excessively. FINRA requires that pattern day traders have a minimum of $25,000 in their brokerage accounts in a combination of cash and certain securities as a way of reducing risk. If the equity in the account drops below this $25,000 threshold, the pattern day trader can no longer complete any day trades until the account is back up above that point. This is known as the Pattern Day Trader Rule or the PDT Rule.