If you’re looking to live financially dangerously and you can handle a roller coaster of emotions, try day trading. I always wanted to look into this and see how do day traders profit from this. Like any investment, you would want to buy low and sell high. But can you do that constantly throughout the day? I’m sure that professional day traders have access to more resources and information that a consumer investor but I took a small stab at it. What I realized is that there’s so much pressure and emotions that go through you because you’re dealing with money. I learned that day trading is not for me.
Looking at the stock market go up and down, up and down, and constantly wondering whether I made the right decision became such an anxiety torture that I decided to reverse what I did. I sold some securities and bought some securities with the money from the sale. Then I tried to quickly sell again. I’m not even sure if this is what day traders do but when I tried this, I didn’t have a good feeling.
I think of stock trading similar to gambling. You put up some money and there’s a chance of getting more money back, breaking even, or losing money. I feel with the stock market, you have more resources and information to make a financially educated decisions. Sometimes the strategy you have just doesn’t go right and now you’re negative.
Another thing I learned is that when you sell a security, you don’t necessarily have that money available to you immediately. I incurred a good faith violation which is when you buy a security in a cash account, then sell it before paying for the initial purchase in full with settled funds. (The standard settlement time is two business days after a trade, but this can vary depending on the product traded.) Essentially, you don’t have the money right away after a sale. When I wanted to reverse what I did and buy back the stock that I originally sold, I couldn’t because I didn’t have the settled funds. Just my luck, the stock I tried to buy back that I couldn’t went up and all I could do is watch it go up. I’m just shooting myself in the foot on this one.
This was definitely a learning experience. Trying to act like a day trader resulted in losing money, missing an opportunity for stock growth, and a ton of anxiety and high emotions. From now on, I’m going to stick to my original financial plan which is to invest for the long run. I’m sure there are day traders out there who are highly capable but day trading is definitely not for me. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.
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