Prof. Tyler yamazaki

Pros and cons of day trading
While the above makes day trading sound relatively straightforward, the
truth of the matter is that it has a variety of pros and cons that means it is
not for everyone. Take a look at the following list to determine if there isn’t
another type of trading that is better suited to your goals.
Pros
Large profit margins: For those who do it right, day trading can be a very
profitable career path with profits that are greater and more reliable than
just about any other type of securities trading.
Work for yourself: Many of the most successful day traders are self-
employed which means they don’t have to answer to anyone, they can make

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their own hours and set their own profit goals.
Always exciting: Dealing with the shortest market timeframes means that
day traders typically see more action than any other type of security trader.
You will have the opportunity to pit your wits against the market as well as
your competition each and every day. Those who are natural thrill seekers
will also appreciate the adrenaline rush that comes from rapid-fire trading
and pulling a big win from the grip of defeat.
No degree required: As opposed to many other financial jobs, a perfectly
successful day trader can be completely self-taught. As long as you are
willing to put in the time and energy to learn the skills you need, you can be
a success with no degree required. Everything you need to learn can be
found, at very little expense, online.
Tax write off: As self-employed individuals, day traders can write off a
great deal of their expenses when it comes time to pay taxes. Sophisticated
hardware, expensive software, even home office space can all be partly
written off by those who work from home.
Cons
Commissions can noticeably affect profits: Due to the higher than average
number of trades they make in a single day, the commission cost of
individual trades can significantly affect your overall profits if you don’t do
everything in your power to minimize these costs.
The potential for loss is substantial: Day trading is without a doubt the most
difficult of all of the types of securities trading to make a reliable profit in.
Most day traders see nothing but losses for a least the first month of their
nascent career and if they are not careful these loses can prevent them from
ever reaching profit making status. While only trading what you can afford
to lose is something that every trader should keep in mind, many new day
traders trade with borrowed money in the form of margined trades or capital
from loans which can cause them to start out from a significantly indebted
position.
High startup costs: Day traders are actively competing against hedge funds,
high-frequency traders and other professionals who often have trading

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capital reserves in the millions. As such, in order to compete it is
recommended that you have a trading bankroll that is at least $10,000 at the
bare minimum. Additionally, you are going to need to invest upfront in
charting software, a trading platform, computer hardware and more. Added
to this are the ongoing costs of commissions, live price quotes and other
brokerage fees, all of which add up faster than they otherwise would do to
the high volume of trades to be made. Finally, many brokerages will not
allow you to day trade unless you have proven yourself to be a successful
trader on a smaller scale which means there is a time as well as a monetary
commitment.
Self-employed: While there are benefits to working for yourself, there are
also drawbacks. These include a lack of health insurance, a steady paycheck
and corporate infrastructure, just to name a few. This also means that you
will need to deal with the isolation that comes from working by yourself
with no one around to lend a hand or to make sure you spend your days
working instead of browsing social media, you will be completely
responsible for your own success. Finally, in order to truly day trade
successfully, you need to commit fully from the start which means giving
up your steady paycheck to try something far less guaranteed.