YOU are up at 6.30 am every morning from Monday to Friday, look through your account, scan the latest business headlines for stocks that are making news of the day, look at their charts and then make your picks for the day. For those who are curious as to know what you are doing, you are someone involved in stock market day trading.
Many people say they enjoy stock market day trading because they can make a lot of money from this. I’m sure some people find stock market day trading to be a very lucrative career – people are known to make thousands every day. The flip side is they can also lose a lot of money if they do NOT know what they are doing!
I know trying to convince people that stock market day trading is NOT for them can be a tough call but if you keep in mind on these 6 things I have said, you will be able to see why stock market day trading is just not for everyone.
6 Reasons Why Day Trading Is Not For Everyone
1. Day Trading Require Fast Reflexes
A day trader is a person buying and selling stocks within minutes or hours and selling by the end of the day - that means he or she has to make super fast reflexes in the stock market. Another flip side – they usually have to bet very big - a few minutes or a few seconds too late could mean losing big!
2. A Very High Risk Game
Stock market sites like Market Watch will tell you that only 5% of people actually make money in stock market day trading. To put this into perspective, that means 95% will end up as losers in this game! If you are someone just looking to make a comfortable living from the stock market, think long and hard before taking up day trading.
3. Very Difficult To Master
It’s very difficult to learn how to day trade especially in the local stock market. Most people start by reading a book they bought over the internet. Others pay big money to attend day trading courses. Can they make you a good day trader? I doubt it. The best advice I have read and seen is to find a mentor who have been day trading successfully for 10 years or more.
4. It’s Very Stressful To Your Body and Mind
Stock market day trading can be very stressful to the body and mind. Day traders often complain they do not sleep or eat well. If you’re not healthy, then you should never ever day trade. After all you have many options – there are other stock market strategies you can use which are a lot healthier than stock market day trading.
5. The Game Is Rigged Against The Small Timers
Advanced technology employed by professional traders, hedge funds and institutions such as black boxes, high frequency trading and computer trading algorithms build codes and scripts to trade against you. They continue to find ways to make it harder and harder to make money from stock market day trading.
6. Require Lots of Spare Time & Hard Work
If you can’t be around from the time the stock market opens till it close, then you cannot be a day trader. Stock market day trading usually means you have to be around and eyes glued to the trading screen …until you close all your positions! And there is …waking up early to read the headlines and make your picks for the day.
Conclusion
Only around 5% of retail traders make money as full-time day traders. The probability of success is small even though the rewards are enormous. Do you want to day trade? I hope not.
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