What are the pros and cons of short-term trading versus long-term trading? Long term is for accumulating wealth and short term is for paying bills for years long term is not kicking arse. In long term generally if you are good have two years of breakeven and one huge year, most markets cycles in same years, economic slowdown, people even buy less meat. Long term like in stocks you can make dividends if you are smart and use options on both sides to make 10-20% a year plus capital appreciation, long term commodities, can sell options to make a little waiting for resumption of trends. Far less commissions, just rollovers to usually nearby contract months with exception of Eurodollars, front months usually has most volume and movement. Least amount of time needed overall, best and easiest to automate. Do need more cash but less chance of going belly up if knowledge is same. Long term can be profitable even if just being profitable 15% of the time. LOL, Short term, most traders have concept of risk way wrong, it is not the same being equal, very very hard to maintain 1 to 1 reward to risk and be very consistent. If you not knocking out 35% and less of losses, this is about breakeven overall for most, you have to be far better at making profits than long term cause of losing trades and breakeven trades and not big profit trades and the occasional 25% either full target or larger profitable trades. If I am risking $800 on long term ES trade, and first target is 40 points or $2,000, less risk for short term trade, e almost impossible of 40 point trade except for days like Friday, getting 40 points are unlikely. Long term following trend and often short term is reversion to the mean. But really, you can't measure risk of one term and another because of time. Time needed get modestly good is 10,000 hours to day trade where long term maybe few hundred to become reasonable good because of reward to risk. Day trading you have to have much time to memorize very quick several factors, you have all night to think about trades next day or week long term. You still need good money for lasting time. Far easier to hedge long term than day trade and much less of commissions long term. You have to also think quality of life, You can start another business and doing long term, but day trading and have having another job so much tougher.
Hi, you ask a great question. There is value in both short term and long term trading. Few things to consider. In short term trading you can take advantage of intraday volatility but can be the subject of some "wipsaw" trading. In longer term, its more of investing and portfolio management.