
Originally Posted by
makie
Day trader is actually a general term, not only limited to forex, about a person who trades financial tools such as stocks and currencies within a day and trying to take advantage of the market fluctuations. Day traders normally hold stocks and other financial instruments in a very short period of time with the goal of making a profit from the difference of the buying price and the selling price.
Day traders differ from swing traders and buy and hold investors. Swing traders hold financial instruments longer, normally in a few days to a week, before trading while those people who are in buy and hold doesn't trade a lot. They hold securities for a long period of time and are taking advantage of the growth of the stock. Short term fluctuations never matter for investors because they know that their investments will grow in time.
As for the risk, traders face a lot greater risks than investors. Many people lost money in the stock market because of trading. However, with greater risk comes in the possibility of greater returns. Since traders are trying to take advantage of the daily or short term fluctuations, if one could just perform well, the returns could be much higher than investing.
Trading requires knowledge and experience, it is a skill.