Day Trading: The Good and Bad

Day trading means you open and close a position on the same day. Traders will keep positions for just a couple of minutes in certain situations.

Pros

• Immediate results.

It's quick, first of all, and you will see instant results. And by instant outcomes, what do I mean?

Well, you do know whether you're right or wrong within a few minutes, because either the trade moves in your favor and you're going to be able to make a profit, or it moves against you.

But at the end of the day, you already know how good you're doing after you've done some day trades, right?

• You're not at overnight risk

Whatever you know is in your account at the end of the day. So, the findings are more instantaneous.

For a moment, imagine swing trading.

You see, I'm in a role usually between 5 and 20 days, the way I swing trade. So this is where you need to have some time for the trade to grow.

And this is where you're going to have some ups and downs and you don't see the immediate success you're doing with day trading.

As you know, even with the overnight risk, markets are going nuts right now, and some people enjoy not getting risk overnight because you don't know when the markets are going to open in the morning.

• It's a kick of adrenaline

It's certainly an adrenaline kick, right?

I mean, you know that, in a matter of minutes, you can make hundreds of dollars, maybe even thousands of dollars, depending on your account size.

But here it can be very addictive. It certainly gives you the kick of adrenaline and that's why people enjoy day trading.

But even though it can feel good, it is not a formula for continuity when trading to be all jacked up on feelings

• There is no overthinking

The other thing, there's no overthinking with day trading, and here's why.

You have to make a decision in a split second while trading for the day. I say, for you, the markets don't stop.

The markets are moving, so the markets are moving fast, and you need to move right away when you see an opening.

And that's why some people enjoy day-trading, because they don't tend to overthink this way.

It's very difficult with day trading to overthink things. There's no analysis paralysis with day trading, but you lose if you snooze.

Cons

• It can be very addictive.

Day-trading Con? Oh, maybe it's really addictive.

For certain people, trading for the day is more like a casino slot machine.

I saw people wiping out their accounts because they were addicted to day-trading.

Like I like to do these days, when you swing trading, you just put a trade a day and after that, you're done and you can relax.

• You don't have time to think

Another con is that there is no time for you to reflect.

And again, because you can stop overthinking, this can be a pro, but it also contributes to impulsive trading.

And this is what I see many traders are doing, that they are trading impulsively, especially day traders.

Because they see that the market is beginning to shift, and now they're afraid the market could run away.

Often this is where FOMO comes in (Fear Of missing Out).

And so they buy easy, and they often buy at the top.

So no time to think can be a pro, but because it leads to impulsive trading, it can also be a con, and generally, impulsive trading never worked for me.

• The threat of overtrading

So let's talk about the third con I see here, and that's the possibility of overtrading, or revenge trading as well.

What would I mean by that?

"Especially when a day trader starts in the morning and has a few losing trades here, the trader may say, "Oh, if I'm only trading more, I'm going to make the money I lost back.

I don't know about you now, but what I witnessed when I was overtrading or trading in retaliation, typically when I was having a bad day, just got worse.

And this is where I see many day traders just overtrading, retaliation trading, and doing a lot of impulsive trading here, and doubling down, wiping their account out.

Final Thoughts

If you want to evaluate your trades and think about them before you enter, I want to say day trading is not for you.

So if you want to take some time and say, "Okay, let me look at the trade and think about where I'm going to put my profit goal and my stop loss," then trading day is not for you.

For you, the markets do not stop, the markets just keep going. And, especially these days, the markets can move quickly.

Also, day trading is not for you if you may have a problem with addiction. And hey, you know the best thing about yourself, right?

I mean, do you think you could get addicted to day-to-day trading? It's possible for most people, and no addiction is a healthy addiction, right?

Now, lastly, if you quickly get depressed or overwhelmed, day trading is not for you. You know yourself better again.

Trading day is super easy, it's like traveling at 180 miles per hour on the German Highway. It's fun if you are an accomplished driver. But if you get distracted quickly, then trading day may not be for you.