[ELI5]How do day traders lose money, why would they sell their stock for a loss in a day insyead of waiting for the cost to increase?

Question

[ELI5]How do day traders lose money, why would they sell their stock for a loss in a day insyead of waiting for the cost to increase?

In: Economics

Answer 1

There are only 2 reasons to trade a stock, no matter if its a day trader or not:

If you think it will rise, buy it (or hold it if you own it)

If you think it will lower, sell it (or don’t buy it if you don’t own it).

So if you think the price will decrease, you should not continue to hold the stock. If you think the price will increase, you should keep the stock.