Is stock market day trading the best strategy to help you get wealthy? The vast majority of investors on the market today are constantly at their computer, analyzing their investments and whether or not it would be a good time to buy or sell.
Day trading is where someone who buys a stock for the short term, hoping to capitalize on the short term swings in the market. Unfortunately, the vast majority of those who engage in this type of active trading either lose money or don't make any significant money. Why is this?
Actually, the most successful investors in the world typically always invest their money for the long term. In other words, they don't just go for the quick hitters; they will only invest their money if they are sure of a long term gain.
The only way that day trading in the stock market ever works is to guess the patterns of a stock and try to capitalize on a short term upswing. Here's what that means.
The average investor on the stock market, for example, may see that company X's stock is going up. They will then look at a stock chart and see that the company typically has their stock go up for a couple weeks at a time, followed by a sharp downturn.
If the stock has only been going up for one week, then the investor very well may buy, planning to sell when he believes the stock is due for a crash. Obviously, there are many risks to this method. Yes, some people do make some great money with this short term approach, but the vast majority don't because of the high risk involved. Often times, day trading in the stock market is more gambling than investing.
Your best bet is to become financially educated; learn to read a companies' income statement and determine their overall profitability, and if their future outlook looks good, invest for the long term, assuming they are selling at a good price. No, you may not make a million dollars overnight like some have with stock market day trading (very few), but if you keep it up, you will make a lot of money from your investing.