Why I Prefer Day Trading Over Investing

There are lots of different high yield investments that people can choose from, but the most popular and rewarding would have to be day trading and investing in stocks. Choosing to investment in these types of instruments certainly takes a certain person. If you don't like the thought of any form of risks with your investments this definitely wouldn't be an option you would want to consider. Although both of these types of investments present certain risks, the risk can be controlled and managed properly. I have invested in both of these types of markets and I have to say I definitely prefer day trading over normal investing in stocks.

People who invest do so with long term outlooks on their investments. Day traders look at a small window of opportunity to quickly make a profit and then get out of the market and look for another opportunity. These trades can last from as little as a minute up to a number of hours.

This means that once you close all your positions for the day you no longer have to think about your trades for the rest of the day. With long term investors, they can lose sleep at times because the market can do anything overnight, so a position that you had that was in profit say 20 or 30 percent, can easily turn in to a 20 or 30 percent loss overnight. The tough part to swallow about that is that you can't do anything while the market is closed.

The brokerage costs for stock trading can be a lot more expensive too. I know people can pay up to $60 a round trip when buy shares. They are charged $30 to buy the stock and another $30 to sell the stock. Depending on the day trading instrument you use, you can little to no brokerage. When I trade mini future contracts I only pay $5 a round trip and when I trade forex I don't have to pay any brokerage at all.

With day trading you will be placing a larger number of trades on any given day, week month or year than what you would with investing. This means that you can see how much your trading has improved over a good period of time like 6 - 12 months. Because you have such a large sample size with day trading, it is a lot easier to make tweaks to your system. With investing, it is a lot harder because you may only place a small amount of trades to analyze.

If you currently have your funds tied up in other high yield investments you may want to consider your options day trading to get a better return.


View the original article here

0 Response to "Why I Prefer Day Trading Over Investing"

Post a Comment

powered by Blogger | WordPress by Newwpthemes | Converted by BloggerTheme