Day Trading, Micro Trading, Intra-Day

Day trading is conceptually the act of trading (speculating) during the same day. Another word for Day Trading 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 E-Mini markets.

Intra-day trades require the least amount of capital to hold a position, which is called (initial margin).

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 trading is called micro trading. TradeFoxx promotes this kind of trading that allows short periods of risk exposure.

Another name for Micro Trading is Scalping, which is taking profits on small price changes. When micro trading you must have extreme control over your risk. Because you are willing to take small profits you must also take moderate losses. We prefer the use 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 of 25,000. Day traders trade more than 5 times a day. If you buy and sell stocks, it will be considered “Patterned Day Trading” which requires higher capital to deposit.

As a result, if you want to keep your deposits small, you should stick to futures and Forex.

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 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 discourages investors from trading excessively. FINRA requires pattern day traders to have a minimum of $25,000 in their brokerage accounts in cash and certain securities. This is 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 day trades. This is until the account is able to rise above that point. This is known as the Pattern Day Trader Rule or the PDT Rule.