Day Trading Trading Basics

Question 1

What defines day trading?

Accepted Answer

Buying and selling financial instruments within the same trading day, closing all positions before market close

Answer

Trading for an entire day

Answer

Trading only during daytime hours

Answer

Trading once per day

Question 2

What is the Pattern Day Trader (PDT) rule in the US?

Accepted Answer

A FINRA rule requiring $25,000 minimum equity for accounts making 4+ day trades in 5 business days

Answer

A rule about trading patterns on charts

Answer

A rule about trading only on certain days

Answer

A tax regulation

Question 3

What is a market order?

Accepted Answer

An order to buy or sell immediately at the best available current price

Answer

An order that creates a market

Answer

An order placed at the market close

Answer

A premarket order

Question 4

What is slippage in day trading?

Accepted Answer

The difference between the expected price of a trade and the actual price at which it executes

Answer

A mistake in clicking

Answer

Sliding on a wet floor

Answer

A type of chart pattern

Question 5

What is volume in day trading?

Accepted Answer

The number of shares or contracts traded in a given time period, indicating market activity and liquidity

Answer

How loud the trading floor is

Answer

The size of your monitor

Answer

The amount of money in your account

Question 6

What is a limit order?

Accepted Answer

An order to buy or sell at a specific price or better, which may not execute if the price is not reached

Answer

An order with limited time

Answer

An order that limits your losses

Answer

The maximum order size allowed