Pros and Cons of Day Trading

I guess I'm not smart. I never traded at a prop firm and have been at it 21 years and sole source of income. My advice to you is to NOT make blanket statements such as the one above. Sure, most will fail at daytrading just as most entrepreneurs do. But one can be successful if they have the discipline, are not undercapitalized, are willing to adapt to changing market conditions and know there may be some challenging times.

 

Thanks for all your replies, super helpful.

 

Did you start out with a large relative account size?

surf

 

This statement makes me suspicious.

I think you have to trade instruments/securities with favourable market conditions as a discretionary trader.

 

Not necessarily, you can have one to several instruments in your stable and simply need to adjust time frames, targets and stops from time to time. This has worked for me in futures for years.

 

$90K ... took it down as low as $65K which did cause some anxiety at the time.

 

Not sure why you see it as suspicious. Do I trade the same way today as back in 1999 (for example)? Heck no. Back then you could go long most tech stocks and make a killing. In 2008-09 if you didn't play the short side you likely got hammered. Market sentiment & psychology are big aspects that I look at.

 

Day trading is necessary in times of volatility, but without that volatility it's difficult to get optimal returns in the short run.

The VIX hit a 10-year low this month so finding day trading strategies that can justify the risk might be tricky. In my experience, you would need to get really creative in the options market for it to work, but it can be done.

 

Thanks. Best to you!

 

This statement makes me even more suspicious because its an overly simplistic view of changing market conditions that affect day traders. If all you had to worry about as a day trader is whether to go long or short based on long term sentiment/psychology, we'd all be billionaires.

One of the key advantages of discretionary day trading is you can choose which markets to trade based on the conditions that are visible to your eye and the long term outlook.

You're suggesting that a grind is necessary. Avoiding a problem altogether is the better option than finding a solution to a problem that usually comes at a cost.