Why is day trading considered dangerous?

[kut2k2]

nobody has it...

for the the 1% that think they have , the day will come

i generally dislike the word "plan" (not because it reminds me the ineffective 5-year plans of the Soviet era, but because it assumes that we know what will happen in the market and consequently that we know what we will do, which we do not),

I like the term "method" , it does not assume anything, just give us set of rules how to react on what is happening on the market now

but those rules are not bulletproof, regardless of how many times they been tested, and how much consistent money they helped to make...

When I think of "trading plan", I think of the definition you give for "method", so this is just semantics.

More to the point, no trading rules are bulletproof. If they were, you'd never have a losing trade. IOW you'd have the Holy Grail. There is no Holy Grail.

You don't need a holy grail in order to have a permanent edge. The fact that most edges are/seem to be transitory doesn't mean they all are. The best example is the simplest edge: a bull market. Everybody who bets with the trend during a bull is a winner, hence the old saying "A bull market makes geniuses of us all".

But of course bull markets are transitory and eventually the buy&hold crowd gets mauled when the bear or Choppy the shark appears. But a smarter edge, one based on market conditions, would at least mitigate loses during adverse conditions while taking best advantage of favorable conditions.

There are permanent edges. They are not easy to find but well worth the hunt. Good luck.

 

[El OchoCinco]

I read all the articles about day trading, 99% of them said it is one of the most dangerous things in the world.

I believe policemen, firemen, soldiers, longshoremen and many others would disagree with your statement. Kind of silly hyperbole. Anything is dangerous if you do not know what you are doing....

 

[Handle123]

I read all the articles about day trading, 99% of them said it is one of the most dangerous things in the world.

I just can't understand why, why day trading is dangerous? as far as I see it, it is much much safer to day trade than to hold a stock over night(I wouldn't be able to sleep)

If you hold a stock for 60 minutes for example, the chances that the stock will drop are pretty low.
If you hold it for years you are very exposed to events that will wipe out your money.

Also holding a stock over night when you have no control over your stock (the price changes drastically over night) is a lot more gambling than day trading will ever be.

Can anyone explain to me why day trading is considered not safe?
Thanks in advance

If you are uneducated=you are dangerous to yourself and family if they rely on you to be head of household. Trading is not just in of itself, it is also how you react to making or losing money, if it becomes an addiction to you. There are so many more problems to day trading than long term trading, but those who know how reap huge rewards from those who don't have their life in order, thank God for that. Oh yes, I am a scalper, but the real money is in Commodity Spreading and stock/ETF options, always had been and most likely always will be.

 

[Turveyd]

This is based on Newbies giving it a go, market moving against them, doubling up, then again then again, then hey presto account is GONE.

We have ALL been there and very likely shall be again.

Give it some time, stop doing above then Day Trading is WAYYYY safer than holding over night and over the weekend with gaps and exposing yourself to news constantly.

 

[MrN]

That is true. It is your viewpoint. And I'm sure it is shared by others. However, you did not address the substance of my observations about your viewpoint. Rather, you homed in on my choice of phrasing of a single sentence.

It was my viewpoint on the risks and dangers of day trading. Perhaps you were looking for the answers to a different question.

here is an answer to a different question:

My viewpoint is that people starting out without much money, no connections, etc. would be much better off attempting to bootstrap their account up to comfortable seven figures after tax vs. attempting to trade a smaller account for a living. To do this one typically needs to be able to hold down a job at the same time, so swing-type strategies are the most viable. Once u do that u have breathing room to do whatever u want in life, be it expanding a trading biz, or whatever. If that seems unlikely IMO it is far more likely than earning a good living on a small account for many years.

 

[Frederick Foresight]

It was my viewpoint on the risks and dangers of day trading. Perhaps you were looking for the answers to a different question.

here is an answer to a different question:

My viewpoint is that people starting out without much money, no connections, etc. would be much better off attempting to bootstrap their account up to comfortable seven figures after tax vs. attempting to trade a smaller account for a living. To do this one typically needs to be able to hold down a job at the same time, so swing-type strategies are the most viable. Once u do that u have breathing room to do whatever u want in life, be it expanding a trading biz, or whatever. If that seems unlikely IMO it is far more likely than earning a good living on a small account for many years.

I already know where you stand on the matter. You were fairly clear. And that's fine. I was only hoping for an elaboration of the specific points I raised in my initial post to you.

 

[MrN]

I already know where you stand on the matter. You were fairly clear. And that's fine. I was only hoping for an elaboration of the specific points I raised in my initial post to you.

U asked a bunch of complex questions. Which one was most important?

 

[marketsurfer]

I believe policemen, firemen, soldiers, longshoremen and many others would disagree with your statement. Kind of silly hyperbole. Anything is dangerous if you do not know what you are doing....

It was easily inferred he meant "financially" dangerous.

surf

 

[Frederick Foresight]

U asked a bunch of complex questions. Which one was most important?

There were essentially only 3 questions I asked regarding your aversion to intraday trading. I didn't think they were particularly complex, but here they are again in slightly abbreviated form taken from my first post:

1. So because an intraday trader cannot compete with HFT firms at the millisecond level, he must increase his time frame by a factor of many thousands? Nothing in between?

2. As for transaction costs and churning, again, all or nothing? Hanging tough when a trade is going against you is the safe play? So then, where exactly do you draw the line?

3. You liken an individual intraday trader to a start up, but imply in your mention of the fourth problem that the person should have employment elsewhere. So the hobbyist with no information edge or the time to closely monitor the market is your ideal individual trader?

 

[MrN]

There were essentially only 3 questions I asked regarding your aversion to intraday trading. I didn't think they were particularly complex, but here they are again in slightly abbreviated form taken from my first post:

There are not essentially 3 questions, there is a question created each time you use a question mark. Also, you imbed assumptions about my viewpoint into your questions for no reason. In trading things with no purpose are not neutral, they are harmful. If you want good answers, first remove the assumptions, and then make your questions as precise as possible. What specifically are you asking, what do you want to know. I am not being a dick - the issue is, you can't get good answers without first asking good questions - and the themes of your questions are actually very complex, the answer depending upon many variables.