Don't Get Too Hooked-Up With Day Trading, Here's Why

Whenever you participate in trading platforms and social media groups everywhere, there is a great chance that you’ve already heard about this very hot fad: day trading. It is one of the most favorite past times of many young traders today. Driven by acronyms such as FOMO (Fear Of Missing Out) and YOLO (You Only Live Once), the young generation of traders today do their best to make the most out of their potential gains and investment… in the quickest way possible… the quicker, the better.

Day trading has really proven to make some people truly profitable in a day or two. Whenever we see some Youtube and Tiktok videos of young traders bursting about their Forex or Cryptocurrency exploits, you’d probably see that most of them really make some decent income with day trading.

Day trading works, there is truth to that. But the question is, does it work in long terms? Let’s not delay the direct answer meant for this, the answer is “No.” As stated above, day trading is a fad and for the next paragraphs, let’s delve into the details on why most experts think it’s not a good strategy to be focusing on.

Because day trading happens only within the entire length of a typical working day or less, it is a form of a quick fix – something that many young traders believe to be the answer to the financial freedom that they’re aspiring for. But is it really the answer?

The reason for this fad’s existence.

Statistics are a good way of finding out how something plays out and how it performs for some people and in currency trading, it is always a great habit to look at statistics to find out what strategy works and what doesn’t. Studies show that around 80 to 97% of day traders lost all their money within a span of 6 months to 1 year.

This means that in every 10 traders you’ll meet, 8 to 9 out of them are actually losing money or will certainly be losers depending on how new they are in the day trading fad. The main factor of day trading’s rise to prominence is the cheapness and accessibility of computing technology.

Cellphones and tablets, which are technically computers too have are becoming more affordable. Because of such a fad, people are hopping into money-making habits too that promise to give them quick and easy riches.

Because investment apps are easier to download and install too, and because people can literally bring them wherever they go, they always have the thrill and excitement of making money coursing through their veins all the time. And because a lot of people are participating in such acts, youngsters hop into the game too because of that FOMO adage.

Then there are those who “sell the dream.” These days, we can see a rapid rise of Youtube and Tiktok influences babbling about their income as they allegedly use this certain technique that they claim to be a “surefire method” of gaining huge amounts of money in a very short span of time.

These people are really good at showing you the appearance of how rich they are. They will show you screenshots and onscreen displays of the money they gained along with the stuff they are able to buy out those earnings. Scenarios like this that we often see in social media are among the reasons why day trading is gaining strong momentum within the money-making field.

Why people hop into it.

Aside from the FOMO and YOLO mindsets, there is also the “gambler’s mindset” that comes into play. The reason why gamblers do what they do is due to the rush of the adrenaline that pumps through their endocrine systems. It feels good: the thrill of winning, the knowledge of trumping over the enemy in the nick of time – these things make gambling very exciting, not to mention very addictive.

There is also the “envy factor.” Some people hop into it because of what the people around are attaining out of it. One might think that since he is just earning $300 a week and most of his friends are earning $400, he is on the poverty line, he must earn bigger, though $200 would already be enough to address his personal needs.

So when a certain fad like day trading emerges, he hops into the fray, thinking that it is the quick answer to the financial constraints that he is so burdened with. He wants to hit it big with traditional, long-term trading, but when he sees the difficulties that come along with it, he backs out, aiming for faster solutions to his goals.

What should you do instead?

Since day trading is just a fad, you should view it as just a learning tool, something that you might need to do just so you’ll have some learning experiences that you can add to your psycho-emotional portfolio for your trading exploits in the future. Know this, long-term planning, analyzing, and executing them in a strategic way is always the best way to go.

From time to time, you may still do some occasional day trading acts just to stir a different flavor for the pot in some little ways. It would be a good habit to get into on rare occasions because it can also be an effective means of killing off your boredom or dull trading routines.

But if you want to be a truly effective and profitable currency trader, you really need to focus on long-term strategies that may take days to plan, weeks to execute, and months to truly grasp and comprehend. If you do this regularly over the years, you will certainly be among the most productive Forex investors that you only look up to during your novice phases.

From the views of other experts, day trading is a bit similar to those crash diets, people hop into a certain eating routine that can make them attain the desired body weight and shape that they aspire for. They think that in a short span of time, they can appear to be as good-looking as those models and fitness popularizers that they see in glam magazines.

The simple truth is that even those models would say when asked in a serious conversation, that their gorgeous bodies are products of hard work and a disciplined way of life. They didn’t attain those good looks overnight. They planned for it, worked for it, and gave it a lot of time and effort to maintain their attractive appearance.

The same goes for trading as well as any other money-making endeavor. It is a way of life. And because this is so… play the long game. That’s the best and ultimate goal that you should instill in your mind at all times.