Is day trading profitable or not

 

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Majority of intraday traders stop active trading after one year. Intraday trading is often time consuming, needs a lot of research and patience. Not all days end in green in day trading and people often wonder why day trading does not work.

But the truth is day trading has been profitable for many people for those who follow the rules. Everyone can become successful in day trading by avoiding the common mistakes in stock trading. There are many limitations in intraday trading

 

You Can’t Earn Handsome Every Single Day

In Intraday trading not all days will give you double digit profits. There are bound to be some days when the markets will not move in favorable direction and you may end up losing out on your investment capital. 

This is why people call intraday trading risky and are afraid to step in this game. You should be fully aware about the risk and only after understanding the same decide to step into intraday trading.

 

Trading on rumors or news can be harmful if done without planning

Trading on the basis of news is one of the most dangerous and risky types of trades, as the stock markets are highly volatile and it can be impossible to predict how markets react to a particular news. 

There can be a sudden volatility which can erode your invested capital if you do not have a well thought of plan and have not analyzed the clear impact of a news on the stock prices and have traded in it. 

You must always assess and analyze as to how a particular news will affect the markets and only after that you should place your trade, once the volatility dies down.

 

Let us now turn to some of the disadvantages of intraday trading

Your time window in intraday trading is only about 5-6 hours. If you don’t get the required moment in that time, you must close out the position.

Leverage in intraday trading can work both ways. Just as profits can get magnified and multiplied, the same is true of losses also. If you are a full-time intraday trader, then your cash flow risk is also quite high.

Markets have their way of deceiving trades and this is more so for intraday trading. You may get enticed by a few correct trades and could end up losing capital in aggression.

Intraday trading is largely a disciplined game. The day you are lack in discipline and risk management even for a few moments, your intraday trading performance can be in serious trouble.

There is a lot of serious effort to put in. You need to become a good analyst, a good chart interpreter, and even a good trader. Wearing all these hats and playing all these roles, day in and day out can be quite demanding.

Sudden bouts of volatility can work against you in most cases and can magnify your losses to unmanageable levels. Be cautious about that, as 1 or 2 bad days are enough.

In an attempt to enter and exit positions hurriedly in intraday trading, you may lose out on long-term opportunities to make profits. Your room for error is too low if you are an intraday trader.

 

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