Why do people day trade when over 90% of traders lose money over the long term?

Question

Buying something that has large potential and holding it for years is ALWAYS the best strategy. You save on capital gains tax + you save on constantly paying trading fees + it’s less risky, yet people still try to time tops and bottoms and try to play the gambling game of trading 

Answer 1

They all think they are the 1%.

Answer 2

I have a friend who does this. He trades in a small number of stocks that he pays close attention to. He buys and sells but tries to stay under the limit so he doesn't have to pay the extra fees his broker would charge a less casual trader. He probably makes about a thousand a week. I'm tempted, too, but I've always been unlucky in this sort of thing and expect my "luck" would be just the same.

Answer 3

The thinking is this: 

You buy 10 stocks assuming 9 will fail, but hoping that the 1 will make enough return to compensate for the loses. 

Answer 4

Same reason people gamble.   And the fees are minimal.  I sold $2500 worth of a stock today and the fee was 6 cents.

I think its probably over 95-98% of day traders who lose money.

Answer 5

Because lots of people have unrealistic get-rich-quick dreams.  

There are very few day traders who have been doing it for a long time.  They are usually cured pretty quickly.

Lots of people do time the market a bit, though, and I see nothing wrong with that.   When the market had it's Covid crash in March I gobbled up some more good stuff like AAPL.   Experienced investors know an opportunity when they see one.

Answer 6

you have to do your homework and watch what's going on in society, especially politically, so you know which stocks to invest in. I wish I had seen where Amazon was going back in 2000 when it was $20/share. it's worth over $3000 a share now.

Answer 7

People think they can be part of the 10% who consistently make money and they think they'll be able to earn more money in the long run than a buy & hold strategy.

Answer 8

The EXACT same reason that people play the lottery.