Pros and Cons of Day Trading

PROS

1) flat at the end of every session so sleep good at night
2) profits made quickly
3) losses made quickly
4) opportunity to compound money by using profits over and over just made from previous trade/trades
5) many opportunities to trade
6) can trade size, if trading an appropiate instrument, thereby capturing good profits, while at the same time being flat and knowing where you stand at the end of every session.
7) ability to give your broker a smile and a grin
8) financially support your broker
9) flexible hours

CONS
NONE IF you have a good ADAPTABLE profitable system that you have practiced over and over until it becomes second nature. And you have good psychology developed for trading. And you have proven to yourself that you can and will execute your system in real markets with real money consistently. Of course the above means alot of understanding.... development..testing..practice ...and actual execution in real markets with real money hence it may require several years to get good at it.

These are ONLY my opinion and I am not suggesting you, or anyone else, do any of it.
 
In my opinion, I think forex is a change that we can learn and trade about the market whenever, trading two dimensions, regardless of whether the market is up or down and high liquidity.
And about the disadvantages of trading: we have to consistently, strict discipline, update the news and specially is accept the losing.
 
2weels said:
Simples, what do you mean by "long term?" And how long did it take you to get 3 million in the bank?

Thanks.
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Long-term for me is anything traded on EOD-charts and above TFs. For my current trading, which is always coordinated after market close, I'm buying and holding long-term, using observations, foundational logic, backtest and automation to buy & sell when history shows selling is more favourable than holding. So even though this can be somewhat consistent after 10 years, it won't be consistent from year to year, which is common for many long-term portfolios.

The interesting thing about such a system though, is that there's no time limit, and can follow moves up to it's conclusion point, though won't find the absolute top. This may mean doubling many times, sometimes pullbacks can be almost 50% of position worth. Probably not the most efficient, but interesting concerning such long timescales (ie. top performers may be 10x after 10 years, BUT will need to pay for the laggards and losers as well, so NOT a get rich quick scheme). It relies on never risking more than 1-2% of account at any given position at any time, which is tricky to scale, so works on 30-40 positions of very different position sizes and market diversification.

I'm nowhere near 3 million, in either local currency or USD, so are just ramping up from breaking even for a while (after losing smallish consistently for years). So winnings and losses are nothing compared to living expenses, for which I work for a living.

My post refers to my own experience of trading during the day, which ended up too big and losing alot on a bad call (typical buying with trend and selling pullback-bottom), which sent me back to long-term analysis again. For someone else, it might go OK, alas typical trading statistics don't really favour it.

In my book, you need to be able to crawl before you can stand up and walk, so that's where I'm at. I'm hoping to go above break-even this summer on my current long-term system, and need to be mentally prepared to let the system do it's thing no matter what, because all experience so far is to expect the worst and prepare well in anticipation of everything. Seems a good climate to get started now at least, but would never rely on it.

Yeah, I know it's slow.. :D
 
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This is an important question that a beginner should ask and I hope you had a good understanding of the hardships you will face on your journey. Feel free to ask me anything trading related before jumping into this profession. Answering your question...

Top reasons:
  1. Flexibility
  2. Earnings potential
  3. Excitement
  4. Simplicity
  5. Good work/life balance
However, I quit day trading because:
  1. Loneliness
  2. Stress especially anxiety of FOMO (fear of missing out).
  3. Degrading performance of my strategies
  4. Leaving no professional legacy behind
I let the aspects of day trading dictate my lifestyle. Now I trade automated strategies and turned my life around.
 
lovethetrade said:
This statement makes me even more suspicious because its an overly simplistic view of changing market conditions that affect day traders. If all you had to worry about as a day trader is whether to go long or short based on long term sentiment/psychology, we'd all be billionaires.

One of the key advantages of discretionary day trading is you can choose which markets to trade based on the conditions that are visible to your eye and the long term outlook.

You're suggesting that a grind is necessary. Avoiding a problem altogether is the better option than finding a solution to a problem that usually comes at a cost.
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You can trade your way and I'll trade my way. Adapting to changing conditions is part of the game. And I seriously doubt I'd be here 21 years after I started full time back in 1996 if I didn't adapt to changing market conditions. I trade equities only and being 100% focused on that has allowed me to do well over the years. I still don't get your comments on being suspicious. Over the years I've known guys who traded equities and no two of them traded the same way. Some were momentum guys, some traded size, some scalped, some averaged into a trade, some played news stories, the possibilities go on and on.
 
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