Day Trader Don’ts

Don’t bet the farm

The harsh reality: Most day traders lose money big-time. So never day-trade with money you need for routine living, tuition money, or retirement funds. 

Understand the expenses

Many day-traders have to pay the company they’re affiliated with enormous commissions in exchange for training and equipment. They work with borrowed money and can quickly ring up mountains of debt. Given the hefty expenses, have a clear idea of what it takes to turn a profit in this scenario.

“Easy” is a myth

Day trading requires you to be glued to a computer all day, monitoring prices and trends at every moment. Done right, this is hard and gut-wrenching work. Anyone who tells you otherwise is scamming you.

Consider the source

Once you become known as a day trader, you will be barraged with hot “insider” advice, primarily from people who are trying to drive up their own investments. Don’t act on advice if you aren’t sure of the source.

Check out that class

You may have been invited to find out about day trading at a special class or seminar. Find out whether the instructor will benefit if you decide to become a day trader. If so, the information provided in the class might be seriously skewed.