Other than the risk of loosing money - What are the disadvantages of day trading?

Question

I mean by way of tax implications, margin requirements etc. I have made about 10 % in my portfolio over the past 6 months and I know the risks, I have been down 10 % too - I have not had the courage to get flagged as a day trader bout i would like to know any disadvantages of getting flagged. - I use Ameritrade.

Answer 1

In day trading, you will spend 6 hours a day doing nothing but losing money most of the time.

I guarantee I will out-perform you by just buying a stock, doing the things I love to do while you sit around and make dumb trades Cramer told you to make and lose money.

It's a suckers game and you should get out. Between the record keeping, the taxes, the stress, it's just another way of gambling your money away while giving commission to the brokers.

And Ameritrade is so NOT the way to go when day trading. Please stop and either get help or learn to buy and hold.

Erik

Answer 2

This penny stock service has years of proven experience. Ultimately it is the best service for beginners to use https://tr.im/abIxp
You will have to wait between 3 and 10 days to get into the system in most cases. When I signed up it took 8 days. I wished it was faster, but if you can wait a week or two to start earn life changing money than you will have what it takes to make it in this business.

Answer 3

Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts.

Some brokerage account agreements have restrictions dealing with day trading. I don't know about Ameritrade, bu I know some brokerages will not offer their lowest commissions to day traders.

For more information on day trading rules, see

http://www.sec.gov/answers/daytrading.htm

http://www.interactivebrokers.com/en/trading/marginRequirements/patternDayTraders.php?ib_entity=llc

http://www.nasd.com/InvestorInformation/MarketsTrading/DayTradingInformation/NASDW_005906

Answer 4

The record-keeping is monstrous.

The market is biased against you. (For 200 years, any randomly chosen 6 hour period has averaged a loss. The market proceeds upwards in rapid inclines and mostly gentle declines.)

The commissions will eat you alive.

Over 90% of day-traders historically have lost more than they gained.

The few day-traders that DO make money work VERY, VERY, VERY hard, and could easily find jobs that paid better and were less stressful.

Answer 5

Day trading returns are incredibly unpredictable. On average, you will make money, but with wild swings, and those swings can wipe you out. Also every gain you make is short term. And investing becomes your full time job.

Kick the habit and invest in a good index fund, and then go do something else all day. I run a site on leveraged index investing, feel free to read up.

Answer 6

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