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Pros and Cons of Day Trading

The trades that last for seconds or minutes comes under the umbrella of the Day Trading. The day traders take advantages of short term fluctuations in the price of the stocks and all the positions are opened and closed within the same day.

Traders prefer day trading as it lasts for a few minutes and also get leverage from the broker and they utilize that leverage for their trading. However, day trading needs a lot of backtesting and rock-solid strategy. Apart from this, a perfect discipline is obliged in it.

If you have just started in the market thinking about the day trading, consider these pros and cons to focus on.


Day traders take leverage so they have to cut their position by end of the day whether in loss or profit. Thus, it needs great patience and discipline to cut the positions within the time range.

Big Screen Time
If you are a day trader, then you must know the value of the screen time. You need non stop 6 to 7 hours sitting before the screen. Trading does not only belong to market hours but also needs to have some time for research so extended hours mark for that research that you have to do before hitting the market in the morning.

Low success Rate
This does not mean, you won’t succeed but the harsh truth is that only 5 to 6% day traders make consistent money, rest lose that. So, if you want to be successful, the hard work, confidence, conviction and perseverance are keys that can help you.

Compete the algos
To succeed in day trading your head, hand, heart and eyes need a precise combination with super speed as nowadays you are competing with machines and algos. They are super fast in executing the trades.

Sound Strategy
The traders who lose in day trading lacks a sound strategy that helps them to sail whatever the market trends are. You have to build your own strategy with depth knowledge of technical analysis or Open Interest Analysis. The strategy depends on your style of trading.


Time to spend with family and do some other business
Day traders get huge that they can spend with their family or try some new businesses in the time that they left with aftermarket. They might utilize those time for their hobbies. So, it gives a feeling of freedom to do whatever they want.

Money Raining
Good money can rain if you do the day trading with precise discipline and patience. However, it is a hard work as you have to perform consistently with focus.

No-Risk to Carry Positions Over Night
Day Traders do not carry risk overnight as they closed all their position before shutting the windows. So, they don’t have a burden of any bad news that comes in the night and spoils their party.

No need to Hedge
Day traders simply need to filter a few stocks for day trading and they can identify the entry and exit. According to their plan, they can do their exit and entry so no need to do any type of hedging which seems complex for many traders.

Day Trading has its own pros and cons however, a good trader needs to adapt with those pros and cons. Once, they adapt it perfectly, a way to success opens.

Reading Recommendations

Pros and Cons of Day Trading Reviewed by Kumar Chandan on April 17, 2020 Rating: 5

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