Day Trading versus Internet Marketing

by Simo
37 replies
Hi Warriors,

I was talking to my dad today about his Day Trading experiences. He is interested in Internet Marketing, and I have suggested if he enjoys day trading and it is profitable for him, then to stick with it.

I love Internet Marketing, but I wanted to present to my dad some non-biased views on the benefits of Internet Marketing versus Day Trading ( I don't understand or am remotely interested in Day Trading, so I can't give him a balanced perspective on this basis.)

Also, I have not made huge money from Internet Marketing (yet) and my dad know this so I don't want him to invalidate my feedback on IM on this basis (on the off-chance that this would influence his thinking).

So I thought I would ask you, which one of the above (Day Trading Versus Internet Marketing) you would choose and why?

Specific examples are welcomed, and with your consent I'll send my dad this thread URL so he can view your responses.

Thanks for your sharing in advance.

Cheers,

Simo
#day #internet #marketing #trading #versus
  • Profile picture of the author Ron Douglas
    Day Trading is a job. If you don't sit in front of the computer watching trade opportunities, you don't make money.

    Internet Marketing (when done right) can produce passive recurring income. That's money that continues to come in even when you are doing other things (like enjoying life).
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    • Profile picture of the author discrat
      Originally Posted by Ron Douglas View Post

      Day Trading is a job. If you don't sit in front of the computer watching trade opportunities, you don't make money.

      Internet Marketing (when done right) can produce passive recurring income. That's money that continues to come in even when you are doing other things (like enjoying life).

      Yes I have to agree with this as I did Trading Full time for a number of years. I find IM a much more satisfying endeavour. You do get great Highs with Day Trading but when you have those off days be prepared for sleepless nights.

      IM is much more even tempo and like you said you can earn in your sleep whereas you cant with Day trading !!

      Although a Day trader will wholeheartidly disagree, I would say IM adds more value to Society than Day trading. In Day trading you get so wrapped up in the Money because honestly thats what it is all about. But in IM you have the Opportunity to make money and help people solve their problems at the same time!!
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    • Profile picture of the author DogScout
      Originally Posted by Ron Douglas View Post

      Day Trading is a job. If you don't sit in front of the computer watching trade opportunities, you don't make money.

      Internet Marketing (when done right) can produce passive recurring income. That's money that continues to come in even when you are doing other things (like enjoying life).
      My cousin-in-law day trades 1-2 hours a day and makes over a million a year. I am betting he is the exception, not the rule. Day Trading seems risky to me though I know a lot that do it a couple hours a day only and make 2-500 dollars in that time. Some people are just not cut out for it. Especially anyone with impulsive tendencies. (which leaves me out) Lol. If he is doing well, IM could be a second income stream, but no need to stop what is working for him?
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  • Profile picture of the author Simo
    Hey Ron,

    Really appreciate your feedback, and a this is most valid point and a great reason for putting a tick in the IM box.

    Thanks heaps for that gem of a comment

    Cheers,

    Andrew
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    • Profile picture of the author Gaurav Duggal
      Simple, day trading is a gamble at best, and internet marketing (when done properly) is a business. Inherently, a well run business will beat out any form of gambling any day. Factor in the aforementioned passive income, and thats the very reason that i switched from day trading to internet marketing myself
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      • Profile picture of the author Ron Douglas
        Originally Posted by lokimotion View Post

        Simple, day trading is a gamble at best
        That's not necessarily correct. Gambling is all or nothing. Day trading (when done right) allows you to manage your risk.

        For example:

        - I bet $10,000 on the craps table - I either win or lose $10,000.

        - I trade $10,000 on a stock, if it goes down 10% I can quickly admit that I'm wrong, sell it and only lose $1,000. On the flip side, if it goes up I can let it run, trail a stop on it, and have unlimited upside potential.
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        • Profile picture of the author Intrepreneur
          If your father is losing on Day Trading and has plenty more dollars in his back burner. Do all you can to move him from Day Trading. Because it's not as sutainable as the income he could be generating via IM.




          Originally Posted by Ron Douglas View Post

          That's not necessarily correct. Gambling is all or nothing. Day trading (when done right) allows you to manage your risk.

          For example:

          - I bet $10,000 on the craps table - I either win or lose $10,000.

          - I trade $10,000 on a stock, if it goes down 10% I can quickly admit that I'm wrong, sell it and only lose $1,000. On the flip side, if it goes up I can let it run, trail a stop on it, and have unlimited upside potential.
          Nice theoretic reply but due to the similarities with day trading and gambling that is highly unlikely to happen with most traders. And they'd chase it down until the 10k is gone.

          Also Day Trading is another one of those things that is made to look so easy just to get the target in the door, then they can't let go just like a gamblers addiction. It's only until they gain the expert knowledge needed that they can profit.. if they ever do get the right mentality along with that knowledge.
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          • Profile picture of the author Ron Douglas
            Originally Posted by Intrepreneur View Post

            Nice theoretic reply but due to the similarities with day trading and gambling that is highly unlikely to happen with most traders. And they'd chase it down until the 10k is gone.
            It's a lot more than theory. If you don't know how to manage risk, you're simply not a trader. Believe it or not, many traders actually make money consistently.
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            • Profile picture of the author The Dotcom Hippie
              Originally Posted by Ron Douglas View Post

              It's a lot more than theory. If you don't know how to manage risk, you're simply not a trader. Believe it or not, many traders actually make money consistently.
              So do many pop singers. That doesn't mean I should start looking at singing and shaking my ass on MTV as a realistic career opportunity.
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            • Originally Posted by Ron Douglas View Post

              It's a lot more than theory. If you don't know how to manage risk, you're simply not a trader. Believe it or not, many traders actually make money consistently.
              Managing risk is not that important in trading, actually. Proper risk management will simply have your account bleed to death slowly, but it will eventually either way. Either you have A) a statistical edge in your trading and B) robot-like emotion control, you cannot make a cent in your trading.

              Again, trading is waaaaaay more difficult than IM.
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              • Profile picture of the author Ron Douglas
                Originally Posted by Anonymous Affiliate View Post

                Managing risk is not that important in trading, actually. Proper risk management will simply have your account bleed to death slowly, but it will eventually either way. Either you have A) a statistical edge in your trading and B) robot-like emotion control, you cannot make a cent in your trading.

                Again, trading is waaaaaay more difficult than IM.
                It's all relative to the person and their skill-set. For some people, day trading may be easier than Internet Marketing.

                All good trading systems have proper risk management as the most critical component. You can be wrong 50% of the time and still make money if you are disciplined enough to let your winners run and cut your losses short.

                I'm in no way advocating day trading over Internet Marketing for the reason I mention in my first reply. I just think we should have more respect for people's livelihood. If it's not your thing and you don't fully understand it, that's fine.
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              • Profile picture of the author TeamGlobal
                Hi Simo,

                Is there a particular reason you Dad is drawn toward day trading rather than swing trading or long term trading?

                Originally Posted by Anonymous Affiliate View Post

                Managing risk is not that important in trading, actually. Proper risk management will simply have your account bleed to death slowly, but it will eventually either way. Either you have A) a statistical edge in your trading and B) robot-like emotion control, you cannot make a cent in your trading.

                Again, trading is waaaaaay more difficult than IM.
                Actually, managing your risk is of paramount importance! The only people who don't manage their risk are those who trade unsuccessfully.

                Re: "Proper risk management will simply have your account bleed to death slowly, but it will eventually either way."
                If you use "proper risk management" with all the other necessary components in place your account wouldn't bleed to death slowly.
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  • Profile picture of the author Stephen Root
    I would add that day trading requires totally different mindset than internet marketing. My guess is that if your dad comes from day trading to IM, he will be bored to death in less than week unless you coach him how things work. IM is kinda slow and you have to test, test, test everything and so on.

    Or you could gamble on Adwords.. like putting ads up with keyword like "Facebook" and "Myspace" and see if they are profitable or if you just lost a lot of money with 10000 clicks
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  • Profile picture of the author Simo
    @Stephen Root - thanks for your feedback, and I understand what you are saying about helping my dad create a structure for IM learning.

    @Lokimotion - Thanks for your input. What other things have you noticed since being in IM, that you consider advantageous over Day Trading? Thanks again
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  • Profile picture of the author CDarklock
    Originally Posted by Simo View Post

    So I thought I would ask you, which one of the above (Day Trading Versus Internet Marketing) you would choose and why?
    Internet marketing, because in my experience - and I'm sure your dad isn't like this, but the day traders I've met largely are - day traders have forgotten WHY they want this money.

    They're so bound up in how to make more of it, they've lost track of what they were going to do with it in the first place. At the end of their fourteen to eighteen hour work day, these people have piled up $250,000 in an account balance on a computer somewhere, but they've got no friends and no family and just plain don't know how to relate to other human beings.

    That wouldn't happen to me, of course, just like I'm sure it hasn't happened to your father. But if I wanted to learn more about day trading?

    I'd have to TALK to those people.

    "See, look, right here... I just made like $80,000 on that sale, right? So I'm going to take that $80,000 and buy this other thing over here. And then? I'm going to take this stock here? And I'm going to sell options on it. And then I take the money I got selling those options, and I'm going to buy the opposite option over there! So here's what happens, see: if the stock goes up, these people come over and want their options. And if it goes down, I'm going to go call in these other options. And either way, I get to make money, because I still have this little stash of the stock over here! And my stop-loss is set at this level, and look, here's how I did these options to make sure that... wait, look! These people want their options! So I click here, and I click there, and they've got their stuff... they'll make like $60,000 on that... and now I click over here and BOOM! I make $50,000. So sure, sure, I could have held the stock and made $110,000 - but then what if it goes down? I lose money! So I only made $50,000 here, but if the stock went down instead of up, guess what? I still would have made $50,000! Isn't that awesome? I just set that up, right here, right now. Here, let me show you how it works on this whiteboard: it's all based on the definite integral of z squared, multiplied by the derivative of the z function..."
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  • Profile picture of the author Simo
    @CDarklock - haha, great post! I haven't met many day traders and my dad certainly isn't anything like this. I think Gordon Gekko could give me a pointer or two though?! lol

    Thanks for your input.
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  • Profile picture of the author Stephen Root
    Your dad could easily expand his day trading to IM by putting up a site about day trading. Yes I know you will say it's saturated and I'll reply bull**** There's always a room for great new site about anything if webmaster is willing to make one and not just site for money. With all the knowledge you got and he can get here for free, I think he will do much better than 90% of the current sites.
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  • Profile picture of the author Simo
    @StephenRoot - Nice comment Stephen . I think its important that we all follow our passions online (not *just* the money). This makes the journey more enjoyable . Thanks
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  • Profile picture of the author J Bold
    Ron Douglas, home shopping show extraordinaire, hit the nail on the head.

    With internet marketing, the ultimate goal is to create passive income. I do not see how that could be done with day trading, as if you outsource you are taking a risk.

    However, I know some day traders and the reason they do it is because they absolutely love it and they love the daily thrill of moving so much money around in the markets. They are just those type of guys. So, if you love what you do and can make money at it, heck, that beats sitting on the beach being bored.
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    • Profile picture of the author ahlexis
      I believe that both day trading and internet marketing are the same in many ways. Here's why.

      I'm sure your dad is most likely not an "all or nothing" trader, that he manages his risk by only putting up a percentage of his total stake in order to ensure that if he's wrong about the market he can stay in the game long enough to get to the winner he would ultimately let ride. (Many professional day traders start with strict money management, such as "never risk more than 5% of total trading capital, etc. Some are even stricter, never going over 2% of trading capital in any one trade.)

      The problem with a lot of internet marketers (especially when first starting out) is, they don't think like that. The marketers who do (especially when using Adwords) have the staying power in many times and are still around to launch another Adwords campaign.

      Your dad probably also doubles- or triples-up (or even more) once he's certain he has a winning trade. Bigtime marketers do that, too. They test first, and then when the test shows they have a winner, they scale up and reinvest the profits to get bigger profits. Willie Crawford once said that for every dollar he spends, he gets $7 back. That means he has tested in order to find this out and plows every dollar from his winning marketing campaign back into advertising to bring a bigger profit...those $7 for each dollar he spends.

      Another problem with a lot of internet marketers I see is, they don't treat it like a true business. In other words, they start out with a little spare change and hope for the best, trying to move the world with their sales letter on a very tight budget selling a $27 product. Which is very hard to do. Yet any time you think of starting any other kind of business, especially in the brick and mortar world, no one would dare even THINK of opening their doors for business with less than 2 months expenses and in many cases not even 1 years' worth of expenses in the bank!

      That's just like the guy who can barely get an account open taking a look at some charts and seeking out the trade he thinks will be most likely to succeed and then betting his entire account on that one trade . . . an account that (s)he just opened and only has enough money in it to purchase a single way-out-of-the-money option on something that is more like a casino bet than a trade, something that has the option price so low because the likelihood of a market turning that purchase into a successful trade is next to nothing.

      Hey! I've been there. Bought cocoa options that I should have left alone that were trading @ 12, frustrated that they went down after I bought and closed at 9 points. Lucky me! The next day they opened @ 25 and it was profits from then out. And yeah, I bet the farm! (Too bad it wasn't a very big farm!) At the time I had NO IDEA why that trade worked. Which meant I shouldn't have been in that market at that time. I later learned the why and how to do it again. (By the way, that happened to be a once-a-year event. Some internet markets are like that, too . . . seasonal. Buck the seasonal trade and lose your shirt!)

      Which brings me to another similarity between internet marketing and day trading.

      Knowing how you went wrong when you lose is just as important as knowing what happened when things went right. That means you will not only NOT make the mistake twice, but also that you will be able to see what the correct action would have been so that next time the same scenario pops up you can get it right.

      Undercapitalized makes it harder to succeed (but not impossible) in both markets. Having the right minimum capital makes life easier in both net marketing and day trading. And relieves some of the stress as well. I learned during my trading days that I managed money "funny" compared to most people. Once I learned that and got comfortable with going against conventional money management suggestions, pulling the trigger became easier and I also saw more opportunities to take trades. For some people writing a sales letter is the same way; they have to get used to good vs. bad sales letters and the things good letters have in common vs. what bad letters all have in common. Knowing the "why" makes it less stressful when you take action in either market.

      And believe it or not, there are things that are beyond your control and unpredictable about both day trading and internet marketing. You never know when the server is going to crash or someone is going to hack your site and shut you down, just like you never know when a major unplanned event in the world is going to have an effect on your trade. (For instance, when an enemy of the US is going to do something stupid that makes the powers that be shut down the markets in reaction to it...remember September 11? The train attacks in England? The Mumbai hunt for people with American or British passports?)

      Day trading can be a "make a decision, place an order, and then walk away" decision depending on the market. Order-cancels-order is one of my favorite ways to trade. But it's not always an option, not available in every market or for every opportunity.
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  • Profile picture of the author agatto2
    Do what you love... Thats it. I have done both..... And I love day trading... I also really like internet marketing , but not near as much as day trading.

    Day trading is not gambling... In fact its a pretty exact science... Although you do have to have a good bankroll and have someone show you how to set up with data feeds and a good platform that helps you instead of takes from you....

    If hes making money at day trading , and loves it I would stick with it... In fact have your dad pm me his email address so I can add him to my contacts for day trading....
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  • Profile picture of the author The Dotcom Hippie
    Most day traders lose money. While trading stocks is a better bet for most than trading currencies (despite what the Forex scammers will tell you), it's still not something you can count on to bring the bacon home. In fact, it's a very bad idea for about 90% of the people who get into it (edging out forex stuff, which is a bad idea for 95% plus). (My last three jobs before dropping out and starting my own business were in finance, so I'm not entirely clueless when it comes to this stuff. I've worked with stocks, currencies, hedge funds, bonds and some of the 'fancier' financial instruments out there. Based on what I know, there are VERY few people I'd advise to get into day trading, as most of them only lose money long term.)

    Internet marketing on the other hand is very different. There are still some risk factors here, but the way I've been doing this stuff I really stand to risk my time only, and that risk is pretty darn low atm. With day trading, you risk both time and your money - a whole lot of it too.

    Internet Marketing is a business. Day trading - for the VAST majority of the people who get into it - is just an expensive hobby.
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    • Profile picture of the author CDarklock
      Originally Posted by The Dotcom Hippie View Post

      Most day traders lose money.
      I think you'll find that most internet marketers lose money, too.

      A lot less of it, but still.
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      • Profile picture of the author The Dotcom Hippie
        Originally Posted by CDarklock View Post

        I think you'll find that most internet marketers lose money, too.

        A lot less of it, but still.
        Now that is true. But at least they then have a chance to make it back by writing and selling e-books on how to succeed in internet marketing. After all, most e-books on the subject seem to have been authored for that very reason, and it does evidently work very well. And the funniest thing is that this helps even more beginners lose money so that they too can start writing e-books on how to succeed in internet marking and thus the cycle becomes an eternal one.

        We humans sure get into a lot of funny stuff. The Gods must be keeling over with laughter.
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  • Profile picture of the author sbucciarel
    Banned
    I dabbled in Day Trading and wasn't successful with it, but loved it. If I were your father, I would sit down and write a high quality ebook on Day Trading and how to be successful with it. Then build a little site and promote it. He can do both.
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  • Trading is WAY more difficult that Internet Marketing.
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  • Profile picture of the author Hoops4me
    Interestingly enough, I am day trader and also involved in IM. I started into making websites (about the stock market of course) to develop a stable second income. Day trading can be lucrative at times, but does have its ups and downs. I have been trading for twenty years now so I do have some idea of what it entails. Day trading is all about mindset. You must be very calm and make rational decisions, but make them very quickly. Not an easy thing to do.
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  • Profile picture of the author Simo
    Hey Warriors,

    Thanks for all your comments. This is good input which is valid and gives my dad some things to think about. It really shows how great both of these vocations can be when you are passionate (*edit* excited) about them.

    I am sure this will help my dad a lot

    @TeamGlobal - Thanks for your comment. I am not sure about your question. I will ask my dad, and hopefully I can come back you with an answer

    Thanks for all your sharing guys and girls and keep the comments coming.

    Cheers,

    Simo
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    • Profile picture of the author theemperor
      One disadvantage with day trading I can see is that you suffer from variance - i.e. no matter how good you are you WILL without a shadow of a doubt have a series of days or week where you will lose money. And you need to have suitable cash to survive on when this happens.

      In this respect day trading is similar to PPC, but very different from other IM methods based on creating value and promoting for free or next to nothing.
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      • Profile picture of the author Adam Nolan
        Oh I'd pick IM over day trading any day!!!

        Day trading is risky business even for someone who knows what they're doing! IM at least you have more control over what you do and unless you have a TON of capital to start out with in day trading (ie: 6 figures or more) you're going to make more money in IM as well.

        I've been on both sides of the fence.

        Cheers
        - Adam
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  • Profile picture of the author Sisqo
    I've been trading stocks and currencies for 5 years.. I love making money with IM to. They are two totally different things

    it's not easy to become a successful trader. You must study a lot and achieve the right mindset. If you never traded before you can't understand how much you mind is important, you need being disciplined like a marine...you should try to make a trade to understand this.
    Yes, you can become a good trader but you have to study a lot and the right stuff. It's not like the other jobs, because ( and again) of the mental approach
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  • Profile picture of the author ahlexis
    One more thing that I didn't mention in my previous post. To master trading, one must master ONESELF first. You must know yourself and what your reaction is to certain stressful situations relating to money. Some people trade really well . . . on paper! And then when real money is on the line, they throw everything they have learned out the window and start making mistakes.

    But then again, some internet marketers jump from idea to idea without sticking to one plan long enough to see it become a success due to lack of patience and/or wanting overnight success.

    And one thing is for sure: overnight success comes many times in both endeavers! (Only after what can sometimes be years of intensive study and applying what one has learned.)
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  • Profile picture of the author Simo
    Thanks to the new posters for some really insightful comments. This thread is fast becoming a useful guide in its self (don't worry, not going to turn it into a WSO - I respect you all to much, and I would give you permission to tar and feather me!)

    Thanks for all your input so far guys and girls, I really appreciate you taking the time to help out me and my dad.

    This is why I love the Warrior Forum.
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  • Profile picture of the author rightservers
    Day trading has its ups and downs. I was in the financial industry for a couple of years where I had experience as an investment banker as well as a private equity analyst and for the most part I noticed that there were a lot of day traders that simply didn't make money (not saying all of them don't!). It is a high stress job that has huge swings so as long as you can handle the huge ups and downs, then by all means go for it! Life is full of experiences and the only way you can truly figure out that answer is by living that experience yourself.

    One thing I would really like to note is that sometimes stocks theoretically should go up or down, but we've seen a lot of those theories get crushed throughout these harsh times. Pay close attention to what analysts have to say about the stocks that you are dealing with because most of the time, its their word that the public makes decision on (even if you don't agree with them).

    I hope everything works out whichever path he choses to go with.

    All the best,

    Yazan
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  • Profile picture of the author Mr. Enthusiastic
    Day traders are supposed to close out their positions at the close of each business day.

    Internet marketers hope that they'll make money while they sleep. After all you can order "even if it's 3 a.m.!"
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