Day trading is a great way to financial freedom. Penny stocks and other small-cap volatile stocks can provide great opportunity for traders willing to put time and energy into learning how to do it. But there are drawbacks to a life being a day trader. It is not all wine and roses.
You need to have the discipline and patience to make it from small beginnings to great heights. It is hard work. There is no denying that fact. The emotional stress of maintaining a serious level of concentration day after day as you stare at computer monitors of charts, spreadsheets and risk analysis reports can be overwhelming. The only way to get through it is to develop the means to handle that emotional stress.
Penny stocks are seen as the wild West of investing. Since the companies are not usually listed on the New York Stock Exchange or the NASDAQ, the potential for scams and corrupt companies is rampant. But that also scares away other traders that don’t have the stones to deal with that accountability. Accountability is essential when trading penny stocks, because all the trades are on your shoulders. It is your responsibility to make sure you control the amount of your trades and make sure you see the pattern before you execute.
When you delve into the world of penny stocks, you have very little security. There are no 401Ks that are contributed to automatically when you are a day trader. There are no sick days or paid vacation days. You leave the corporate prison of stability in order to gain the freedom to make your own way. There is no boss to grumble about because you are the boss. The buck stops with you.
And you will lose money. There is no doubt that when you trade penny stocks, there will be days when you take a hit that really impacts your profit/loss for those 24 hours. The onus is on you to make sure you have enough back up funds to get back up and try again the next day. The next day is what it is all about. That is where you are going to make your career. Making it back the next day. You always need that belief in yourself.
Day trading can also be a very lonely profession. That is why it is important to keep up your skills and your trading contacts in chat rooms that allow you to interact with other traders. That online social aspect is key to keeping your head on straight.
So, after spending enough time talking about the trials of day trading penny stocks, it is time to talk about what you can gain. You can be your own boss and make your own hours. At the end of the trading day, you can put your computer to sleep and go chill out on the beach or sit in a coffeeshop. No need to wait around at your desk for the 5 pm whistle.
You can trade your way to financial freedom. Having enough money to do what you want is very desirable. That is sometimes possible when you stay on the corporate hamster wheel, but having a job where you control your earnings and your destiny is a much simpler path to financial freedom. That is what trading penny stocks can do for you.