There are many successful day traders who treat day trading as a full-time career. First, the professional day traders are in front of their computer monitors from the market opening to the closing bell. They would be first to tell you that day trading is work, and not entertainment. Second, day traders must know how to trade in order to prosper. Day traders cannot be lucky all the time.
The only commonality between day trading and gambling is the chance or probability of loss. Unlike gamblers, traders have the opportunity to manage their risk. First, day traders have a wealth of real-time financial information at their fingertips. Day traders are able see on their large-screen monitors more financial information than the great majority of participants in the stock market. Consequently, day traders are able to take educated and calculated risks. Second, traders can execute their orders quickly, and they can get out quickly when they need to. In other words, the day traders have the necessary tools to manage the risk.
It is not realistic to expect that traders will be correct 100% of the time. Even if they are correct 50% of the time, which would be equivalent to a game of chance, traders can still be profitable if they minimize losses when they are wrong and allow profits to rise when they are right. This is an important point. To be successful in the long run, day traders minimize their losses and maximize their profits. Given the quantity and sophistication of the financial information presented to the traders in real time, the probability of being right should be higher than 50%. With the acquired trading experience, that probability should increase.
It is true that many day traders have a gambling mentality. They enjoy the rush of adrenaline when they make the right trade. When they are right, they can see on the screen how much money they are making each second. Sometimes, day traders enter trade positions without receiving a clear buy or sell signal. Then, traders are gambling or betting that the stock will go their way. Sometimes they are right and they make money, and other times they are wrong and they lose money. However, good traders do not gamble. A good trader will enter a position only when he or she receives a clear trading signal. .
My point is that good day traders follow the signals from the trading system they use, and they do not gamble. Bad traders, or soon to be ex-traders, do not have a trading system; they gamble.
