Although, day trading in USA is considered as an investment, many in the market term it as gambling. There are many tragic stories associated with the day trading. No doubt, there are a few who have done reasonably well. Hence, no one can say for sure whether day trading is a gamble or a profitable venture.
It may not be easy for a beginner to judge the stock market accurately. Here, experience and in-depth knowledge plays a major role. It is a known fact that several less fortunate have burnt their fingers in day trading.
It is, therefore, safer to assume that day trading is nothing less than gambling. But, it may not give you restless nights, unless, of course, you keep a tab over your investment. Allocating less more for trading is a sure way of feeing safe and secure. It may not earn substantial amount, but it will protect your hard earned money from going down the drain.
Many believe that day trading is a dubious way of making money. It is because the trader buys stocks with an intention to sell within few days / hours, so as to make quick money. Their game plan is simple – buy when the price is low and sell the moment price moves up.
Amusingly, those actively indulge in day trading do not feel comfortable calling themselves day traders. Obviously, they don’t want to associate themselves with those unlucky ones who lost everything in the previous down-turn. And, lucky are those handful few who have mastered the finer points of fishing in trouble market conditions.
It is possible to get a convincing explanation and a few valid tips from a successful day trader. But, the question is whether it will work wonders for you and if yes, for how long. Everyone knows that market moves up and down and a smart few snatch the deal at an opportune time. But, the story may not repeat day-after-day. Sooner or later, they will find themselves on the wrong side of the table.
A day trader might pick up a very attractively priced stock at a particular time. Obviously, huge firms and hedge funds are well equipped and capable of cornering all those valuable but underpriced stocks. Competing against them is an uphill task, if not impossible, for an individual.
Secondly, even if someone finds a foolproof method of making profit by taking advantage of the shortcomings of the system, it may not last too long, as others will catch up ith him, and that trick may cease to function.
As it can be made out, day trading is not the best tool to multiply the hard-earned money. The chances of facing reversal of fortunes are much higher.
It is proved beyond doubt that only a handful few can taste success in day trading and that too, under certain favorable conditions. It brings us back to square one of the rule book which states that a day trader is likely to lose more money than he can earn.
Yet, nothing stops a person from trying his luck by allocating a small portion of his wealth for day trading, with a clear understanding that chances of pulling out the invested funds, with or without a marginal gain, are as slim as winning a state lottery.
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Category: Stock Market