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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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To: TFF who wrote (1323)12/2/1997 6:11:00 PM
From: Morpher  Read Replies (1) of 12617
 
Re:
IMHO Day Trading offers superior opportunity for higher ROI vs Position Trading or Investing.

Interesting. I agree that diversification is a necessity for position trading and investing. But I disagree that day traders' ability to have a concentrated position is a reason for a greater ROI potential.
Position trading and diversification have their good sides too:

- You don't need as much trading skills because you don't have to trade stocks that are currently running and everyone is trying to get a piece of the action.
- You don't have to watch the market all day, it's much less of a full time job.
- You don't necessarily need the greatest quote system or the best broker. Sure, L2 quotes will help but they aren't as critical.
- Your total amount of money invested can be much greater. Not only can your position in a single stock be bigger than 1000 shares, but you also have multiple positions.
- You can take advantage of more than intraday trends.
- You can play the news.
- You can scalp the spread. Those fractions of a point can add up quite nicely.
- You can hedge against market downturns by going market neutral.
- If you're a position trader that can't choose stocks any better than a dart thrower but you're an OK trader and you diversify, you won't lose your shirt in contrast to a not very good day trader. Hell, you might even be ahead.
- I don't see how a good level of diversification (5-15 positions at a time for me) would hinder one's ability to get a good ROI.
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