Conclusion: Theoretically, short-term trading can make a lot of money, but in reality, long-term trading is more profitable and less worrisome.
Why is short-term trading theoretically profitable?
Dream on: Catching涨停 every day, the Earth will be yours in a year. Catch one a week, turning 100,000 into 17 million. Futures are even crazier, trading countless times in a day.
Does anyone really do this? Yes! Big institutions like Goldman Sachs spend millions on super-fast computers, making money off a few milliseconds of difference and ultra-low transaction fees, trading hundreds of thousands of times a day. But ordinary people don't have these conditions!
Why is short-term trading difficult in reality?
Transaction fees are crippling:
Futures: Trading one hand of rebar incurs about 10 yuan in transaction fees. If you trade 10 times a day, the fees alone eat up 1% of your capital. After a year, even if you neither make nor lose money, your capital would be wiped out twice!
Stocks: Each transaction incurs about 0.5% in fees. If you trade twice a week, the annual fees could eat up 50% of your capital! Before making a profit, you’re already stripped of some capital by transaction fees.
Short-term trading is like a wild wind, completely random: no one can accurately predict tomorrow's rise or fall 100% of the time. As long as you don't win every time, along with transaction fees, you will definitely lose money in the long run (negative expected value).
Easy to get carried away: making quick money from short-term trading feels great, cashing out feels immediate. Not selling? You might miss out or even lose what you earned. Many people can't resist the urge to sell. There are also full-time traders who have to engage in short-term trading daily just to make a living, exhausting themselves and still struggling to make money.
Why do big players love long-term investing? The fundamental reason is that long-term investing truly makes money!
It's not because they have a lot of money; it's that long-term investing is more reliable.
Big money is made by capturing big trends (for example, holding onto a good stock for a long time or daring to add to positions when in profit). Although there are times of ups and downs, transaction fees are saved, avoiding pointless short-term turmoil.
If you don't do short-term trading, you've already outpaced 80% of the losing retail investors.
Long-term investing is more comfortable:
You don't have to watch the market every day, and you don't have to live in fear (three days of minor crashes, five days of major crashes).
With a stable mindset, making money becomes easier. This is true freedom.
So: don't dream about catching涨停 and making a fortune every day. Transaction fees and random fluctuations are here to remedy all discontent. Honestly study trends, hold on to them, and long-term investing is the right path for ordinary people to make money.
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