Day Trading Myths and Truths

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What is the Truth about Day Trading?

Let’s be honest – day trading is not for everyone any more than snowboarding or surfing may be. But many potential day traders don’t even venture into the world of trading just due to common myths or mistruths that scare them away from the very concept. Let’s discuss some of these myths and the underlying truth about them.

#1 – Day trading is not profitable

Truth – do you really think there would be literally hundreds of thousands of individuals working either independently or for day trading organizations if there were no potential for gains? Granted, successful day trading requires some research, understanding of some basic investing strategy, and knowledge of how to utilize the software tools your online brokerage provides. With this background and some experience behind you the opportunity for profits becomes very real very quickly.

#2 – Day trading is an easy way to obtain wealth

Truth – hardly. Anyone day trading successfully will tell you it takes discipline, research, and patience. Day traders need to learn how to detect trends and financial investments that have the most potential for gains in the shortest periods of time. The more time you spend to understand markets and various types of trades the higher your potential for profit. In fact many individuals who get into day trading on a whim and don’t give it the proper focus and effort it requires fail quickly and sometimes with significant financial loss. If you intend to start day trading take the time to understand the methods to limit your risk potential through limiting the percentage of your available capital on any one buy and hedging your investments (another strategy worth the time taken to get familiar with).

#3 – Day trading is risky

Truth – maybe. This is another aspect of day trading that is often misunderstood. Depending on your risk tolerance a few losses may be acceptable when they’re more than offset by gains. Test yourself before jumping in head first. Many online brokerages and investment houses offer investment simulators that allow you to test your strategy without using real funds. This allows you to evaluate your strategy and the results obtained from your trades without risk until you’re ready to expose your own capital. It is not uncommon for beginning day traders to experience losses and there is certainly no such thing as a day trader who never makes mistakes or simply makes a bad trade. Having winners outnumber losers is the outcome traders work for. Some nay-sayers call day trading a form of gambling, which will tend to anger those who take day trading very seriously and work hard to hone their skills at spotting the right buy or sell opportunity at the most opportune time.

#4 – There are no rules for day trading.

Truth – Day traders need to have their own rules that they adhere to. This is also part of what constitutes your investment strategy. As you learn what works for you and what does not, make those factors your rules for future buying and selling. For instance if you determine your strategy is to never invest more than 5% of your account capital on a single buy, don’t ever commit 20%. As soon as you break your own rules you become open game for losses. Emotions or a gut feel for a particular stock may be tempting but let the rules guide you. Emotions have no place in the world of investing.

#5 – Day traders need extensive higher education

Truth – Day traders need to learn investing basics:

  • Types of orders
  • Types of investment accounts
  • Investment vehicles and their characteristics (stocks, commodities, currencies, etc)
  • How to select the best online broker (there are significant differences)
  • Recognizing market trends and news events that can impact market values
  • Terminology used in the investment community

These subjects can be learned through the thousands of books available on the subject of investing or even specific to day trading. Online courses are also available and many community colleges offer investing classes or investment clubs where members share tips and strategies. Use caution when considering such options as seminars that charge a hefty fee and promise you success beyond your wildest dreams. These are typically schemes to simply separate you from money you could have invested.

How can Day Traders apply these Truths?

When you make the decision to give day trading a try be sure you’re ready to commit your time and focus to the effort and get at least some basic knowledge of day trading techniques and terminology. Select an online broker who supports the trading platform you intend to use (desktop computer, laptop, tablet, smartphone, or a combination of multiple technologies). Support will be important to you especially when making your initial foray into day trading.


SureTrader is a leading online broker with the tools you need to stay up-to-date on news that impacts your buy and sell decisions. Understanding market charts and news feeds can help you develop and refine your strategy to enhance your rate of success. SureTrader provides friendly and courteous support available to our clients on a 24×7 basis to answer any questions and resolve problems.


SureTrader’s desktop and mobile applications ensure timely and flexible access to SureTrader services – iOS and Android platforms are each supported. Global access to services enables quick and easy trades even in after-hours trading.


Contact SureTrader right away to get started doing online trading with the best in online brokers.


Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.

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