Intra-day trading success stories
This is blog on how day trading ruined peoples life.
It is a short report that people must read. I read day trading disaster stories myself. In turn I doubly assure myself that investing is far better than day trading. We all know that money cannot be made in a day. It takes time, strategy and implementation to make money. There is nothing like quick money in this world. But day trading publicizes just the opposite.
They make us believe that quick money is within reach. But this is all false. Making easy money by day trading is as inconsistent as winning money in a lottery or gambling.
In fact day trading resembles gambling more than anything else. When gambler with a gifted skill, gambles with a strategy and expertise, he makes money. Day trading is just like that, to make money here you must be extra skillful and also fully trained.
This is a reason why, common men only lose money in gambling and day trading. On face of it, gambling and day trading looks too simple. Buying low and selling high is a concept that is so easy to grasp. I have read several stories about how day trading ruined peoples life.
My conclusions have been the same. Unskilled and non-trained people must avoid day trading.
I have read about few successful day traders. I was surprised to see how knowledgeable they are about stock market. All of them were undoubtedly gurus of stock market.
Creating a 'Freedom Lifestyle' Through Day Trading | HuffPost
They were expert is judging and forecasting stock market behaviors. But how many of us can forecast stock market? I will say not even a tiny minority can boast of forecasting stock market. If you cannot foresee stock markets behaviors its better to stay away from trading. Forecasting stock market is like acting god.
Market is so volatile and interdependent on other factors that for a common man forecasting market is nearly impossible. Lets see how day trading works. It is better to know this. Only after knowing about day trading, this realization comes that why it is so risky. Day trading has ruined peoples life simply because there is too much risk associated with it.
Most people have ruined their life in day trading by starting to trade without knowing its basics. An investor buys stocks with intention of holding it for long term. A day trader buys stocks with intention of selling it the same day. Investors analyzes business fundamentals and then buy its stocks. A day trader just look at stock price and cares least about its fundamentals. Investors are ready to wait for long term to neutralize price volatility.
In long term, fundamentally strong business will show definitive growth trend. So investors first checks stocks for its fundamentals, then buy its stocks. They buy stocks of only fundamentally strong stocks. These stock they hold for very long time. Long term growth of such stocks easily beat inflation as the business itself is growing very fast. For a day trader the approach is different. Day traders do not want to neutralize the volatility to make money. Instead they want their stocks to be as volatile as possible.
The more is the stock volatility the higher are their chance to make money. This high volatility inherently associated with day trading makes it so risky. Day traders wants stocks to be volatile. Then this same volatility ruins their life as they cannot correctly predict if price will go up or down. In their lust for more profits, day traders borrows money and then trade.
The borrowed money is used to increase leverage. Suppose a day trader bought 1, stocks of Tata Steel at Rs each.
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Invested capital by traded is Rs 4,35, This capital traders borrows and then trade. It means his profit will still be about Rs 2, First the stocks are volatility. Then day traders make it even worse by borrowing money and increasing risk further. And why he doing this, just for a profit margin of 0. There is no doubt why common men have ruined their life because of day trading. In greed for easy money people fall in the trap of day-trading. As this was nor the end, day trader makes their life even more risky by increasing their trading volumes.
In the above example we saw a day trader making Rs 2, of net profit with margin of just 0. Means, he was investing Rs 4,35, and in return was making just 0. In one trade itself there was so much risk. They further multiple their risk by doing such tradings in a day. What had happens if the day trader makes a loss? Not only he would pay back the borrowed money from his pocket but also the commission charges.
Day traders has two strategies of making money. They follow either leverage method or short selling strategy. We have already seen what how day traders use leverage for making money. For sure leverage method of trading is even riskier. If a day trader performs 5 such profitable trades in a day, his cumulative profit will be Rs 10, per day.
But on paper this short-selling margin trading may look inviting.
How to start trading on the JSE - Maya on Money
But in reality its very scary. What happens if the price, instead of falling continues to rise? This is what happens most of the time. Let it be leverage or short selling trading strategy, the risk of loss when one puts money to work like this is too high.
We common people does not have the required skill of executing trades profitably using leverage or short selling. I hope now my readers have realized the risk associated with day trading and know how day trading ruined peoples life. Statistically speaking, intraday traders are doomed to loose and there are plenty of studies that confirm this fact the Johnson report; study by Odean and Barber at http: Recommend this blog for further details -http: However, it is important for amateurs to continue putting their money in for professionals to make money; which explains why Camden and Matt above are so enthusiastic about the wonders of intraday trading!!
Thanks Manish for a timely warning. You have equated day trading with gambling, many people have this view and investments in shares is normally put on a higher pedestal as compared to day trading. However if you look at the stock market, there is no telling why stock prices of supposedly good — blue chip companies vary so strongly.
Inherently there no big changes occur in working of such companies over short periods. This only means that any kind of investment in stocks is a form of gambling, investing is a long term gambling while day trading is short term. Hence there is not need to spread panic for day trading since it is as good or bad as long term investment. Those who can devote time and efforts should definitely try their hand at day trading. Once you treat your trading activity as business both profit and loss become a part of the game.
I agree with Camden, The worst thing you said: Unskilled and non-trained people must avoid ANYTHING!!!! Any invested money without doing some homework and research, are wasted money. Day trading is not like gambling. I just hate when someone makes wrong statements without having experienced the whole concept themselves.
You dont know what you are talking about. Yeh Leverage kya hai Mnaish Bhai. One more thing Step1 says Places sell order Step2 says contacts broker says HE DOESNOT have????? Start Here Products Podcasts Top Stocks Guest Post Ask Feedback. Hot Topics June 21, Student loan is tough to get? Ways to pay for college… June 13, Know about stock market investing… June 8, Common Income Tax Return Filing Mistakes To Avoid May 28, How Do We Cut Budget?
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Place Sell Order using trading platform suppose shares of Tata Steel Rs Informs them that he does not have shares of Tata Steel.
How Day Trading Ruined Peoples Life - ditycapylal.web.fc2.com
But would like to borrow some. Day Trader waits till the brokerage firm lends 1, shares of Tata Steel in account of day trader. Day Trader immediately sells the 1, shares of Tata Steel at Rs current market price each.
Day Trader waits till the market price of Tata Steel falls to say Rs At this price the day trader buys shares of Tata Steel. He returns back 1, shares back to the brokerage first that he borrowed.