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Is Day Trading as easy as it sounds?

Day trading is simple. However, it is quite risky. Prices do not always rise, and regular traders are more likely to pay more fees and taxes.

Is Day Trading as easy as it sounds?
Photo by Tima Miroshnichenko

When asked about wanting money fast in the present or slow in the future, most people would want money fast, maybe due to their financial condition, problems or just adding more wealth.

In any case, the idea of making money quickly is common. The question though is, Is it possible?

Yes, earning or rather making money can be easier if you know what you are doing. One of the most popular ways people try to make quick money is what this article is going to talk about. The process is called Day Trading.

Day Trading is the buying of shares/securities right after the morning opening bell (9:30 am) of the stock market or any time during the day and selling them before the closing bell (4:00 pm) to make the profit for the day. Now on first hearing about day trading one would think well that doesn’t sound too hard, just know the market and start trading. 

Well, it’s not going to be that simple. Long-term investors are also victims of losses and have made bad buy and sell decisions that have led them to lose their fortunes. A day trader needs to be very particular about the amount of money he/she is trading with, the time they are devoting learning about the events simultaneously that may influence the share price. It won’t be just about timing the market this time but a single percentage change in the price can lead to profit or loss. 

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Day trading works entirely on speculation, where a buyer enters the trade he/she will buy at the price and predicts that the price will go up to the amount he/she wants to sell at. The amount the trader decides to trade with should be an amount the trader is fine with losing because only believing that you will earn a profit is wrong. Most traders begin by making bad decisions and mistakes that may end them up in losses.

Is Day Trading as easy as it sounds?

In a  month if a trader did 20 good trades and 10 or 11 bad trades, if the amount lost in the bad trades is more than what the trader earned in those 20 good trades will mean that overall that month of trading was bad. So it doesn’t depend on how many more/less good or bad trades you do. It matters how consistently you are making the right decision.

Anyone interested in day trading shall learn everything about the stock first and buy shares for the long term. Make predictions without any amount invested and see if you are correct or not. After due diligence and one’s risk-taking ability are identified, can one start trading? To learn the basics and more about the stock market, do check out our other articles on the relevant topics.

Written By

Zeus Zubin Fitter is a New Analyst and Author at Empire Weekly, who covers Stocks and Investment topics.

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