Saturday, August 23, 2008

The Advantages and Disadvantages of Daytrading

Advantages

Many opportunities each day.
Trading can be very exciting and stimulating
If you have an expectancy of .50 or more you may never have a losing month or even week.
No overnight risk.
High probability entry systems
There is always another opportunity

Disadvantages
High transaction costs compared to longer term systems
excitement has nothing to do with making money
profits are limited by time
Data costs are high
scanning costs are high.
Lots of systems with high probability entries also have losses bigger than the gains
Short term systems can be subject to random noise in the markets
Short term psychological pressure can be intensive.

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