Pros and Cons with Day Trading

Last Updated on June 11, 2021 by Oddmund Groette

When I talk to the publisher about the books I have written, he says people are crazy about day trading. I am also fascinated by this fancy for day trading. Is investing too boring? Do we like to “gamble”? Do we need excitement? Punishment/SM (for those who lose)?

Personally, I like daytrading better than investing. I am certainly not a “gambler”, I consider myself very rational. If I saw a bigger potential in investing, I would certainly switch to that from daytrading.

I think anyone considering daytrading should have a look at the pros and cons underneath.


  • High turnover of capital. A good trader is capable of making insane returns on the capital invested
  • Potentially less drawdown than investing (think about 2008 for example)
  • Less risk of having adverse news going against you (most news come outside market hours)
  • High gearing
  • A great mental and intellectual challenge
  • The law of big numbers is easier to exploit (trade more)


  • Does not participate in the long-term upward drift in stock prices exhibited by equities
  • Requires a great deal of time, inappropriate to mix with a full-time job
  • Commissions and gearing can be ruinous
  • Requires a lot of time and preparation
  • Need software resources

There are too many trying to daytrade while having a job at the same time. I say: forget it. You cannot day trade and work at the same time. There is no way that will work, and you end up having an angry boss. Of course, many in the US West Coast day trade the first hour before they go to the job. That can certainly work. I personally know a couple of guys doing this. You need to treat it as a profession and have a solid plan.

My opinion is that most daytraders underperform the market and a buy and hold strategy. Lack of consistency, time, resources, weakness of the methodology implemented, commissions, connectivity, automation, etc. makes things very difficult. However, for those willing to put in the time and effort, there are great opportunities, even with unlimited resources for programming etc. I will write about this later and back up with evidence and research.