I had a conversation regarding day trading and whether it is a recommended investment strategy, especially for newcomers. Initially, the value of day trading, as opposed to long-term investing, was debated. Concerns were raised about the risks and the prevalence of people sharing success stories while hiding their losses.
It’s mentioned that many day traders lack understanding of the market, leading to poor decisions. While a few, often with prior expertise from environments like Wall Street and substantial funds, can succeed, it’s not common. Day trading is seen as perilous due to the volatile and small-scale nature of assets involved, and traders can easily incur irreversible losses.
A significant point is that traders might feel invincible after a few successful trades which could lead to complacency and eventual significant losses. The cycle of needing funds for the next trade after a loss forces bad decisions, solidifying losses.
Day trading requires constant trading, good and bad assets alike, pushing traders to stay diversified and hope for more gains than losses. Although the general advice strongly discourages day trading, the sentiment is left with a cautious good luck to those who choose to try it, stressing vigilance and the extreme difficulty of the practice.