Day Trading Pros and Cons Rookies Should Know

Day Trading Pros and Cons Rookies Should Know

Day trading is perhaps the most popular trading strategy for those who love the thrill of high frequency trading. It’s the most sought after trading style that many traders want to master doing. Indeed, day trading provides a lot of advantages to those who want to do it.

However, there are also risks and disadvantages. As a responsible trader, you should also bear these dangers in mind.

Let’s take a look at the benefits and risks of Top 10 Forex Brokers day trading.

Pros

Here are some of the benefits you can get from day trading.

Chances for huge profits

This is the most attractive feature of day trading that makes traders want to try it. The idea behind day trading is to exploit small market fluctuations, opening and closing dozens of trades within the same trading day. The key, in other words, is to have more winning trades than losing ones.

You are your own boss

As a day trader you are most likely to work alone or all by yourself. That means you shouldn’t worry about some corporate big bosses anytime. You can also decide to take a break whenever you want or whenever you need to, letting you work at your own comfortable pace.

Exciting and Dynamic

If you love the thrill and excitement, day trading can be a very good & Finance Brokerage FSMsmart Review strategy for you since it requires you to perform your trades in a rapid fire fashion. You will not experience a lot of dull moments. That being said, you still need to be careful and watchful of the risks and dangers while you’re at it. Great risk management is still very much necessary.

Cons

Here are the risks that you should be mindful when you’re trying to be a day trader.

Chance of huge losses

Much as there’s a great chance for you to make great amounts of moolah, there’s also a huge chance for you to incur huge losses. According to the Securities and Exchange Commission, day traders usually lose great amounts of money when they start out and many of them never really reach a profit-making point before they quit.

High startup and maintenance cost

You should bear in mind that every single cent of the starting up and maintenance of your day trading system will have to come from your own pocket. More importantly, you’ll be on your own, meaning you’ll take on and compete with huge corporations that can spend millions of dollars to gain trading advantage over others.

No regular pay

As mentioned above, you might have to ditch your day job to focus on day trading. That is so because this strategy demands much of your time and attention and energy. Even if you can theoretically take time off anytime you want, you first have to consider if you really can take a break and leave your trades unattended and risk missing a great trading opportunity.

You will also have to shoulder great pressure, since the money you will need to pay the bills will probably have to come from what much you make off of day trading.

Category Forex