Day Trading Pros and Cons You Should Keep in Mind

Day Trading Pros and Cons You Should Keep in Mind

For a huge chunk of active traders across the globe, day trading is their best bet to gain profits from the financial markets.  Day Trading Strategies involves taking up dozens or more trade positions in a single day and then closing them all within the same day.  Because and in spite of this, day trading still sports arguably balanced pros and cons.

Day trading is based on technical analysis and highly sophisticated charting systems, with the goal of making a living by trading stocks, commodities, or currencies.  The idea is to make small profits that can way outnumber the small losses throughout the day.

Day trading has its benefits as surely Withdrawal Methods as it has its obvious risks.  Here’s a quick roundup of those pros and cons.

Day trading pros:

  • You can make sizeable profits.  Of course, this is the most attractive feature of day trading, which has a huge potential for huge gains.  However, keep in mind that you can only achieve this by having discipline, determination, and diligence all at once.
  • You are your own boss.  As a day trader, you essentially work alone.  The good thing is that you are independent from the caprices of corporate whim-beaters.  You can choose to have a flexible trading schedule and take some time off practically whenever you want.  
  • It’s exciting.  If you’re one of those people who easily get bored and who want dynamic trading careers, day trading might be the best strategy for you.  There is the adrenaline rush that you will definitely feel in the rapid fire trading that happens to a day trader on a daily basis.
  • You don’t have to be genius.  Having a job in the corporate world typically means you need to have high educational attainment.  Although having a highfaluting degree from an Ivy League university can be a great advantage, day trading doesn’t really require such stuff.  

Day Trading Cons

  • Risks of high losses.  As we have mentioned, day trading also sports inherent and not-to-be-ignored risks.  Even though day traders know they should risk only the money that they can afford to lose, many of them still incur losses that are very high, making them quit trading even before they reach a profit-making status.
  • High startup and ongoing costs.  Since a day trader basically works alone, he has to compete with many other high-frequency traders and hedge funds that can spend tons of cash to gain trading advantages.   Against this backdrop, a day trader is compelled to spend quite a fortune for a trading platform, computers, charting software, and similar items. Ongoing or maintenance costs, meanwhile, includes prices for getting live quotes, as well as commission expenses that can rack up and eat away at his capital.
  • No consistent income.  To be a real day trader, you must spend the greater part of your day monitoring price movements and doing your trades.  This also means that you might have to give up what day job you have right now. And from that point onwards, you will have to depend on day trading as your income source, depending completely on your skills and a bit of luck to have the money to live daily and pay bills.
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