Why You Should Stay Away From Day-Trading and Short Term Stock Trading
However, if you ask most professional investors if it is the most important factor to consider when judging the viability of a trading/ investing strategy they will tell you it is the last number they look at. What matters the most to professionals is risk, maximum draw-down, the duration of draw-downs, volatility and a number of additional risk-oriented benchmarks. Only when all their risk criteria is met do the pros even consider total return.
Risk is defined as "the chance that an investment's actual return will be different than expected. This includes the possibility of losing some or all of the original investment."You might think the professionals are just overly cautious and conservative. On the contrary! They are just as fanatical about accumulating wealth and financial freedom as you and I.However, they have learned to shift their focus to this winning strategy because they've worked through the numbers. They've rightly concluded that total return is a valid measure of performance only when risk is taken into consideration.
Most of us are familiar with the concept of gamblers spending lots of time at a casino or racetrack. However, more and more gamblers are spending time performing short term stock trading online, and this is a dangerous trend which is affecting many lives throughout the country.
Perhaps some of these individuals start out as stock investors who refuse to dwell on the long-term prospects and instead focus their efforts on short-term price movements. This is facilitated by the increasing use of the Internet in modern life, the fact that more people are taking control of their own retirement investments, and the fact that many media outlets spend a great deal of time covering the price and movements of various stocks.
Risk is defined as "the chance that an investment's actual return will be different than expected. This includes the possibility of losing some or all of the original investment."You might think the professionals are just overly cautious and conservative. On the contrary! They are just as fanatical about accumulating wealth and financial freedom as you and I.However, they have learned to shift their focus to this winning strategy because they've worked through the numbers. They've rightly concluded that total return is a valid measure of performance only when risk is taken into consideration.
Most of us are familiar with the concept of gamblers spending lots of time at a casino or racetrack. However, more and more gamblers are spending time performing short term stock trading online, and this is a dangerous trend which is affecting many lives throughout the country.
Perhaps some of these individuals start out as stock investors who refuse to dwell on the long-term prospects and instead focus their efforts on short-term price movements. This is facilitated by the increasing use of the Internet in modern life, the fact that more people are taking control of their own retirement investments, and the fact that many media outlets spend a great deal of time covering the price and movements of various stocks.
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