Day Trading Advantages and Disadvantages
Day trading is the definition 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. Online trading can be done in the comforts of your own home with the aid of a computer and an Internet connection. In the succeeding paragraphs we would know the advantages and disadvantages of day trading and why more people resort to this type of trading.
One advantage of day trading is that there is no overnight exposure. Overnight exposure poses a lot of risks since the market has the possibility to be unstable overnight which might present you with few to large losses. Overnight exposure is what day traders try to avoid. Day trading also gives day traders more opportunity to look for other trading or investing means since day traders move very quickly. Day trading also allows instant profit opportunities.
One disadvantage in day trading is the higher transaction cost than in other types of trading. Since transactions are achieved quickly, a day trader is faced with more time to look for other opportunities which entails another transaction fee. 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.
Why do 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. Day trading produces quick results and instant money. 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. - 23222
One advantage of day trading is that there is no overnight exposure. Overnight exposure poses a lot of risks since the market has the possibility to be unstable overnight which might present you with few to large losses. Overnight exposure is what day traders try to avoid. Day trading also gives day traders more opportunity to look for other trading or investing means since day traders move very quickly. Day trading also allows instant profit opportunities.
One disadvantage in day trading is the higher transaction cost than in other types of trading. Since transactions are achieved quickly, a day trader is faced with more time to look for other opportunities which entails another transaction fee. 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.
Why do 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. Day trading produces quick results and instant money. 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. - 23222
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 @ 12:55 AM
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