The Highs and Lows of Day Trading: Easy way to riches, or a trap?

The Highs and Lows of Day Trading: Easy way to riches, or a trap?

By Fiscal Focus | Apr 12th 2025

In the age of smartphones and real-time trading apps, buying and selling stocks has never been more accessible. That’s led to a surge in day trading—the fast-paced strategy of buying and selling stocks (or other assets) within the same day. For some, it looks like an easy way to financial freedom. For others, it’s a high-stress gamble. 

 What Is Day Trading?

Day trading is the practice of making multiple trades within a single day, aiming to profit from small price movements in stocks, options, ETFs, or even crypto. Traders usually close out all positions by the end of the trading session to avoid risks overnight.

Unlike long-term investing, where you hold onto stocks for months or years, day trading is about reacting quickly. It’s strategy-heavy, time-consuming, and incredibly volatile. One bad move can erase hours—or weeks—of gains.

How It Blew Up

Thanks to platforms like Robinhood, Webull, and TD Ameritrade, anyone with access to the internet can now make trades—or at least try to. Combined with TikTok tutorials, Discord rooms, and influencers hyping these penny stocks, day trading is now seen as an easy way to riches.  

The COVID market boom only fueled the fire. People stuck at home during lockdowns turned to trading as a side hustle—or even a career. But for every viral post about turning $500 into $5,000, there are dozens of stories about losses, which no one ever sheds light on. 

 The Real Risk: 

To be fair, the odds are stacked against the average day trader. Multiple studies, including research from financial regulators, suggest that over 70%–80 % of individual day traders lose money over time. And the faster you trade, the higher the chances of making impulsive decisions.

Why? Markets move based on complex factors: earnings, interest rates, global news, algorithms, etc.. It is impossible for an investor, and even for numerous algorithms, to figure out what will happen in the future.

What It Takes to Win:

Numerous day traders most obviously do not rely on luck. They rely on strict discipline, technical analysis, strict risk management, and years of experience. They track charts obsessively, know how to cut losses quickly, and follow tight rules to avoid big hits.

They also treat it like a job, not a hobby. That means waking up early, planning trades, and staying focused for hours. This isn't seen as the most glamorous thing, but rather exhausting.

 Regulation and Pattern Day Trader Rule

U.S. regulators are keen on the risks. That’s why the Pattern Day Trader (PDT) Rule exists. If you make more than four day trades in five business days using a margin account, you need to maintain at least $25,000 in that account. That’s a big barrier for most beginners, and it exists to protect traders from blowing up their accounts too quickly.

Final Thoughts:

Day trading may look exciting on the surface, and the many accounts of success may seem appealing to all. But in reality, it isn't all it seems. It’s risky, time-intensive, and emotionally draining. For most people, it’s not the golden ticket it’s made out to be.