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Going on Holiday is Risky

By June 30, 2010

According to popular opinion, the warnings that are often visible on brokerage web sites, and agencies like the US SEC (Securities and Exchange Commission), trading (and especially day trading) is an extremely risky activity, that should only be attempted if you are willing to lose all of your money.

The truth is that trading (including day trading) is not a risky activity. Investing (i.e. buying a stock because you like the company) is risky because you have no control over the company you are investing in, and some forms of gambling are risky because they are based entirely upon a random occurrence (i.e. chance), and even something like going on holiday is more risky than trading because you are certainly going to come back with less money than you had before.

Trading (including day trading) can be a very lucrative, lifelong career, with far more advantages than disadvantages (if there are any), so don't let other people, brokerages, or government agencies, dissuade you from becoming a trader (just make sure that you do so correctly, which I will discuss shortly).

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