Lost in the whirlwind world of day trading? It often feels like a maze with big folks and their flashy tools, leaving us hoping for a stroke of luck. Imagine ditching the tricky charts for a simple, real coin flip, person vs person, with a fair 50/50 chance. No gimmicks, no house edge, just a clear, honest game.
What’s your take? Does day trading seem more of a gamble compared to a straight-up coin flip
It depends a bit how we define day trading, do you really buy and sell coins for 8 hours a day, or do we just a buy a few coins per week when the prices are right? A coin is one time event, we either win or lose with 50/50, but if we keep doing the same flip over and over again the chances are high that we will go broke. Nobody can always be right in a coin flip for a long period of time. In case we only do the flip with small amounts then our expected profit is 0, because we should have the same amount of wins as losses. In trading it's different, we don't know instantly if we won or lost money. It could take month for a coin to turn into a real profit and we always have our investment until we sell it. That's why I would say trading is less risky, nobody forces us to sell below our purchase price. We could always hold out and wait for the prices to recover again.
When I discuss day trading, I mean those who buy and sell daily, akin to high-frequency trading. This contrasts with longer-term strategies where you can wait out unfavorable prices. In day trading, swift decisions are vital due to daily market fluctuations. This rapid pace inherently increases the risk, as opposed to the more patient approach of holding assets longer-term. Thus, day trading, given its unpredictable nature within short time frames, can feel a lot like a gamble.