Day trading in global financial markets is likened to navigating a\nvehicle in a foreign city during rush hour, where market participants\nmust always be prepared for sudden changes in direction and market\ncongestion. Investment opportunities can emerge and vanish within\nseconds, meaning that speed of reaction alone is no longer sufficient to\nachieve optimal results. Retail investors are required to expand their\nmarket understanding and utilise appropriate analytical tools to\nidentify and assess various potential transaction setups in a measurable\nmanner.<\/p>\n
Kar Yong Ang, a Financial Market Analyst at ELEV18, explains that day\ntrading focuses on opening and closing transaction positions within the\nsame trading day to avoid overnight risk exposure. \u201cTraders typically\nuse shorter timeframes to identify short-term opportunities. As a\nresult, they may open dozens or even hundreds of leveraged trades,\nholding them for only a few minutes or seconds, and closing positions\neven if the profits are minimal,\u201d Kar Yong Ang stated in a press release\non Friday (25\/09\/2026).<\/p>\n
From an economic efficiency perspective, selecting market instruments\nwith high liquidity, such as major currency pairs, large-cap stocks, and\nfutures indices, is crucial as they offer tighter bid-ask spreads. Kar\nYong Ang illustrated that if a stock is bought at 100 USD and sold at\n99.95 USD, the spread difference is 0.05 USD.<\/p>\n
\u201cA narrower spread generally means lower transaction costs, which can\nmake a significant difference when a user executes hundreds of trades,\u201d\nhe explained.<\/p>\n
However, the calculation of transaction profitability is not\ndetermined by the spread alone, but is also influenced by exchange fees,\nbroker commissions, and the risk of slippage\u2014the difference between the\nactual execution price and the expected price when the order is\nplaced.<\/p>\n
As an economic calculation example, a market participant who buys\n1,000 shares at 100 USD and sells them at 101 USD would generate a gross\nprofit of 1,000 USD. However, after accounting for spread costs, a\ncommission of 0.1 per cent for both buying and selling, exchange fees of\n20 USD, and slippage of 0.05 USD per share, the net result received\ndecreases to less than 800 USD.<\/p>\n
In addition to transaction operational costs, risk management is a\nprimary pillar in maintaining capital sustainability. The mathematical\neffect of asset depreciation shows that recovering losses requires a\nlarger percentage gain as the accumulated loss increases.<\/p>\n
\u201cA 10 per cent decrease in a 10,000 USD account leaves 9,000 USD,\nmeaning a trader needs to achieve an 11.1 per cent profit just to return\nto 10,000 USD. Meanwhile, a 50 per cent decrease leaves 5,000 USD, which\nrequires a profit of up to 100 per cent to recover the original capital.\nTherefore, the main priority for traders is to keep losses within clear\nrisk management limits,\u201d said Kar Yong Ang.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/understanding-day-trading-from-market-research-to-cost-efficiency-1790340890", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }