These firms use their algorithms to take advantage of
very small price movements within the stock market that are not readily available to investors like you and me.
So these days, the real insider trading that makes the headlines is almost inevitably based on short - term highly leveraged trading which exploits
relatively small price movements (plus you only hear about winning trades from the prosecutors).
Some traders are very active and do many trades a day, with large position sizes, catching even
the small price movements; while there are others who trade only on specific news events or only on tendencies that they have well researched.
Day trading strategies are essential when you are looking to capitalise on frequent,
small price movements.
While your average long - term trader may be able to afford to throw in 12 pips (
smallest price movement is usually 1 %) here and cut 12 there, a day trader simply can not.