Pros and Cons
Day traders' objective is to make profits by taking advantage of small price movements in highly liquid stocks or indexes as well. According to Adam Leitzes and Josh Solan (Bulls, Bears and Brains: Investing With the Best and Brightest of the Financial Internet), the more volatile the market, the more favorable the conditions for the day trader, regardless of the longer-term direction of the trend in the market. Unlike some fund managers and investors, who hold positions over longer periods of time and are averse to selling equities short, the day trader is not committed to a position and can adapt himself to whatever condition the market is in at any given moment.
A day trader who wants to achieve success needs appropriate knowledge, equipment, tools and markets together with the ability to trade the right electronic trading platform. A day trader with the right information might be able to succeed, otherwise, success will go to the other person in the transaction or to the broker, if he happens to be the best informed person in the transaction.
Also, a successful day trader needs to know which stocks to trade, when to enter the trade, and when to get out of the trade. Part of this knowledge is to find those stocks with liquidity and volatility, in order to generate profits.
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“Quite generally, the familiar, just because it is familiar, is not cognitively understood. The commonest way in which we deceive either ourselves or others about understanding is by assuming something as familiar, and accepting it on that account; with all its pros and cons, such knowing never gets anywhere, and it knows not why.... The analysis of an idea, as it used to be carried out, was, in fact, nothing else than ridding it of the form in which it had become familiar.”
—Georg Wilhelm Friedrich Hegel (1770–1831)