How Day Trading can Increase your Debts

In the past, investment options were very limited and were often handled by trained experts. However, today's investment world is vastly different. There are an incredible amount of financial options from which to choose and much of the investing can be done by you or me. This opens up a whole new world of potential but it also brings about some confusion. Which options offer the greatest return? How can I best achieve my goals? How you answer these questions may determine whether you enjoy a comfortable retirement or whether you become burdened with heavy levels of debt. A major component of investment success is thorough planning and careful research. Each legitimate option should be examined and considered before a decision is reached. With this in mind, let's take a few moments to examine one such option that has gained popularity in recent years, day trading.

Click Here for a Free Debt Consolidation Quote! Reduce Your Credit Card Debt by up to 60%!

Day trading is the practice of buying stocks with the intent of holding them for a very short period of time. The idea is to take advantage of market upswings by immediately selling the stock. The turnaround time from buying to selling is less than a day and often may be a matter of minutes. There is a variety of computer programs available for "do it yourself" traders to assist in optimally timing the market. There is also a wide array of professional day traders that are available for hire. The main selling point is the opportunity to make large amounts of money in a very short span of time. The obvious down side is the possibility of loosing large amounts in this same time span.

So is day trading a good investment decision? The simple answer is no. While this may not be true for a small segment of the population, for the average investor there are too many alternative options that offer a higher percentage chance of returns. Also, in spite of numerous "big money" claims many successful transactions may only net a few cents a share. This would indicate that unless substantial numbers of shares are purchased then it becomes necessary to make numerous trades in order to gain large profits. The problem is that the more trades you make the greater your chance of loosing money(1). The odds are simply not in your favor.

~~~~~~~~~
About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.