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Trading Basics

How Day Trading Works

The mechanics behind an intraday trade: order routing, the spread, and why liquidity matters.

Marcus Obi · Updated February 2026 · 7 min

From click to fill

When you send an order it reaches an exchange or market maker and is matched against resting liquidity. What you get filled at depends on the order type you chose and how much size sits at that price.

The spread is a real cost

Every round trip pays the difference between bid and ask at least once. In thin names that spread can be larger than the move you were trying to capture, which is why liquidity screening comes before setup hunting.

Session structure

Volume is heaviest in the first and last hour. Midday ranges tend to tighten, and many traders deliberately stop trading through the slow part of the day rather than force marginal setups.

Educational content only. TradeCaster does not provide financial advice and past results never imply future performance.