Day trading
TradingDefinition
Buying and selling positions within the same trading day, never holding overnight. Pattern-day-trader rule (FINRA): if you make 4+ day trades in 5 business days in a margin account, the account requires $25K minimum equity.
Academic research consistently finds 80-90% of day traders lose money over multi-year periods. Survivorship bias makes the social-media winners look representative; they're a tiny minority. Tax treatment is brutal: short-term gains taxed at ordinary income rates.
Academic research consistently finds 80-90% of day traders lose money over multi-year periods. Survivorship bias makes the social-media winners look representative; they're a tiny minority. Tax treatment is brutal: short-term gains taxed at ordinary income rates.