4.3. Day-Trading
Day-trading is possibly the most hectic, complex and intensive of all
investment methods. It is the riskiest investment strategy and, as such, has the
greatest possibility for success (and loss). Day-trading requires an investor to
pay attention to their stock at least every day and almost certainly many times 12
per day. In fact, the most successful day-traders probably sit in front of their
computers all day looking at the price fluctuations. Day-trading is very
demanding. A day-trader literally holds on to shares for hours, minutes or even
seconds. Some day-traders don’t even hold on to their shares overnight for fear
of the dramatic price shifts that circumstances beyond their control can cause
[10]. The reasoning behind day-trading is that by trading the shares in such a
short time after buying, a day-trader can produce results, for better or for worse,
very quickly and actually within the day. Day-traders ride trends. Their practice
is to buy shares in a stock that appears to be on an upward trend at that moment,
reap the benefits of the short upswing, and sell the shares before the inevitable
downward fluctuation comes. Day-traders probably repeat this process dozens
of times a day and they count more on luck than a user of any other strategy.
Even if one is able to manage the intense preparation, the psychological strain of
high-risk trading and the inherent volatility that comes with the practice, a day
trader is not guaranteed a profit, by any means, and fortunes can be easily lost
by the faint-of-heart.