Day Trading Has Grown More Tempting, Not Less Risky
Bored in quarantine? Look at these professional tips before you leap into stay-at-home investing.
It isn’t getting easier.
Photographer: grinvalds/iStockphotoMost studies show that investors who day trade — who try to take advantage of short-term volatility in stocks or other assets — lose money and would reap bigger gains by hanging onto a low-cost index fund that tracks the general stock market.
But tell that to the millions of bored, stuck-at-home investors who think they know how to beat the market. Retail investors accounted for 18.5% of U.S. stock-trading volume as of April, compared to 15% a year earlier, according to Larry Tabb, head of Market Structure Research for Bloomberg Intelligence. Since many won't be dissuaded, I thought it would be helpful to speak to some experienced professional day traders to offer practical tips.