Day Trading's Advantages and Disadvantages
Day trading is when the transaction of buying and selling of share is performed within that same day. More and more people resort to day trading nowadays because it is very accessible especially with the advent of the internet. A casual day trader can trade right at the comfort of his own home with the aid of a computer and a phone. In the succeeding paragraphs we would know the advantages and disadvantages of day trading and why more people resort to this type of trading.
There are basically three styles of day trading and these are day trading, swing trading and trend trading. Day trading is a popular choice among many especially casual traders (online traders). Why? One advantage of day trading is that it has no overnight exposure. It is a known fact among traders that there is high risk overnight which will result to high losses of capital. Day trading also allows more opportunities for the traders since they move quickly, thus they may acquire more profit opportunities.
One example of a disadvantage in day trading is the higher transaction cost than in other types of trading. In day trading you are prompted to make numerous transactions within one day which results to higher transaction costs. Day trading also prompts you to make use of you resources for a longer period of time which means sitting in front of a computer for longer hours, etc.
What is the reason why a lot of people resort to day trading? It is because it is very much the same with gambling, where a person experiences the same high. The get-rich quickly principle is behind the day trading activity although a lot of financial experts advise that this should not be the main reason why you should trade. Day trading is fast becoming a popular activity and more people upon researching on the topic actually try it.
Now that we know the advantages and disadvantages of day trading one could easily weigh his options as to what other kinds of trading is suitable for him. - 23199
There are basically three styles of day trading and these are day trading, swing trading and trend trading. Day trading is a popular choice among many especially casual traders (online traders). Why? One advantage of day trading is that it has no overnight exposure. It is a known fact among traders that there is high risk overnight which will result to high losses of capital. Day trading also allows more opportunities for the traders since they move quickly, thus they may acquire more profit opportunities.
One example of a disadvantage in day trading is the higher transaction cost than in other types of trading. In day trading you are prompted to make numerous transactions within one day which results to higher transaction costs. Day trading also prompts you to make use of you resources for a longer period of time which means sitting in front of a computer for longer hours, etc.
What is the reason why a lot of people resort to day trading? It is because it is very much the same with gambling, where a person experiences the same high. The get-rich quickly principle is behind the day trading activity although a lot of financial experts advise that this should not be the main reason why you should trade. Day trading is fast becoming a popular activity and more people upon researching on the topic actually try it.
Now that we know the advantages and disadvantages of day trading one could easily weigh his options as to what other kinds of trading is suitable for him. - 23199
About the Author:
Mara Hernandez-Capili is a writer and a researcher on Business and Finance. Learn more on how to increase your financial I.Q. by learning about emini trading today. Start earning extra income by making your money work for you through the emini trading system. "Start your journey to financial freedom not tomorrow, not next week, but today.
posted by X - Men @ 1:08 AM
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