Many investors fall in love with the idea of day trading. They think you can spend a few hours a day trading stocks and make huge amounts of money. In this blog post, I cover the pros and cons of day trading so you can see if it is right for you.
While day traders main focus is on small profits from buying and selling stocks multiple times in the same day, these profits add up. If you can make 10 trades a day and they earn $100 return, you make $1,000 a day.
Since day traders don’t have and open positions once the market closes, there is zero overnight risks to them. Many traders and investors are not aware of the various risks they can be exposed to overnight.
While you can get the enjoyment of being your own boss by starting a business, many businesses will end up needing to hire people in order to grow and stay competitive.
States that if you make four or more trades in a five day period and these trades make up more than 6% of the trades in your account, you need $25,000.
One of the most important rules of day trading is using stop loss orders to protect yourself from losses. When many day traders start day trading, they follow this advice perfectly.