Most traders would say that the benefit of Day Trading is the money. You can become a millionaire while sitting in the comfort of your home but this is rarely the case as Day Trading is one of the most difficult careers to succeed in. However, this post is not about the above mentioned benefits but more about benefits in Day Trading compared to other trading styles.
Day Trading Removes the Overnight Risk
The biggest benefit of Day Trading is that you are flat at the end of day. You are not holding any positions overnight, therefore making your trading risk free when you are off from work. There are plenty of risks during the day but when you turn off your computer all hell could break loose and you would not lose any money (if you stayed disciplined and closed out your positions). That is a great feeling and gives a lot of peace and quiet at night.
Day Trading Increases the Return On Capital
Because Day Trading provides you with more trades and you are in and out the same day, you turn your trading capital a lot faster. Instead of getting caught in a trade for months you are ready to put your capital to work the day after. This gives you are a much higher return on your money.
Another benefit of Day Trading is that after a loss you will not have to wait days, weeks or months before getting a new trade on. This should not be an issue for experienced traders but many new traders cannot wait to get back up on the bike after a loss! So for example, if a new trader is anxious to get a new trade on but the trader trades less frequently they might enter a trade that is not according to their trading plan just to get back up on the bike. With Day Trading a new correct trade appears faster and thereby limits the risk that the trader will take a trade that is not according to their trading plan.
In the next post we will talk about the cons of day trading as it is not all gravy in day trading!
The biggest benefit of Day Trading is that you are flat at the end of day. You are not holding any positions overnight, therefore making your trading risk free when you are off from work. There are plenty of risks during the day but when you turn off your computer all hell could break loose and you would not lose any money (if you stayed disciplined and closed out your positions). That is a great feeling and gives a lot of peace and quiet at night.