Can anyone explain me how does someone lose money day trading or swing trading? For example, let's say I buy a stock and my intention is to sell it on the same day, but it doesn't go up. Can't I simply change strategy for swing trading, wait a few days or even weeks to see if the stock goes up and then sell it?
The idea is that you buy low and sell high. Some stock may go down, and never go back up. That's why people lose money.
One of the misconceptions I had about trading was I kept trying to enter positions with stocks that are already in the green early in the morning. Problem with that approach is that those stocks usually have jumped before market open and will often, if not more times than not, fall back before normalizing. My successes so far have been swing trades where I've held the stock for several days to a couple of weeks, waiting to pounce and sell when it rises. If you see a legit, profitable company with a dip in stock price... that's actually worked out way better for me. Eventually the stock price will correct, or even jump in a lot of cases. I've found so far that if you are investing in successful companies that you can just wait it out and at some point the stock will inevitably rise and you can exit the position ahead. So, take all of that with a grain of salt, but as someone who's pretty new to this I've had many more wins with swing trades than I have with day trades. Maybe one of the more experienced members can chime in here and give you better advice, I'm just sharing what has worked for me thus far. Good luck!
Hello! Thank you for your answer. I'm still very new to this and I have a very long way to go. One thing that has been bothering me is the use of leverage. Do you recommend it, because it doesn't seem safe in case one loses money.
I don't use leverage. I don't short sell. I am simple. I buy, hold it. If you bought $IBM back in 2013, you would still be waiting for it to go back up.
Sorry. No. I manage my portfolio myself. I don't have a broker. I use eTrade. Place my own buy and sell orders. A lot of fee free brokerage offers. My only feedback for you is that there's a difference between investing and trading. If you want to invest, it's a lot easier than trading. If you are asking all these questions, then you are probably not ready to trade. Not a bad thing. A lot of people don't know what they are doing, but do it anyway. Some people think they mastered trading in a week with 2 lucky bets on penny stocks. Do some reading. Watch the cable channels. Explore information. Filter information.
