Globe and Mail Interview: The Advantage of Day Trading

• Posted by ppearlman
• on January 27th, 2012

I sat down with David Berman at the Globe and Mail in Toronto this week and discussed short term trading.

Day trading gets a bad wrap and I think some of the criticisms can be justified.

If you are not prepared to control risk or dedicate your professional life to the endeavor, then you will likely lose money. You are probably just gambling.

If, on the other hand, you approach it as a craft and career, then you have a shot…

The greatest advantage to day trading that I see concerns value at risk. If you are not taking home risk then you are not exposed to large overnight dislocations caused by major events and the potentially large price gaps they provoke.

So gap risk is completely off the table because you are not involved when the market is closed.

On the other hand, shorter term trading seems to be getting more difficult for some due to high frequency trading and the games the computers play on the bids and offers.

You can watch the video HERE.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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