From a strictly personal perspective, I believe that "Short-Term Trading" has many advantages over "Buy & Hold" Investing, specifically, it allows the trader to personally maintain control of his/her investments, using technical analysis, without depending on "tips from others" or "luck" to profit in the market.
One perfect example that you will recognize; General Motors, now known at Motors Liquidation Company. The long term investor (buy and hold) is now a financial nightmare for "buy and hold" shareholders.
Motors Liquidation Company, formerly General Motors Corporation, is engaged primarily in the development, production and marketing of cars, trucks and parts. The Company develops, manufactures and markets vehicles worldwide through its four automotive segments: GM North America, GM Europe, GM Latin America/Africa/Mid-East and GM Asia Pacific. In addition to its automotive operations, the Company’s finance and insurance operations are primarily conducted through GMAC LLC. GMAC provides a range of financial services, including consumer vehicle financing, automotive dealership and other commercial financing. In June 2009, the Company filed for bankruptcy. In July 2009, the Company announced that the United States Bankruptcy Court for the Southern District of New York approved the sale of substantially all of General Motors Corporation's assets to NGMCO, Inc., an entity funded by the United States Department of the Treasury. In July 2009, the Company emerged from bankruptcy protection.
A look at the chart tells the entire story.
But a Day Trader or Short Term Trader, looks for stocks that continually go up and down (which is natural) $1 (trader's choice) most days, or every few days if "Swing Trading". After studying the equity, the Day Trader will jump on board, either at the perceived top or perceived bottom, and buys a 1,000 (trader's choice) shares, and only stays in their position until they see their pre-determined goal met for the day, or the period, sells their position, puts the money in their account, and waits for the next opportunity.
While occasionally, Day Traders will make bad calls, by limiting their trading activity to minutes, hours, or days, and faithfully watching their monitors while a trade is in play, they control their assets with - Few Surprises.
This Oil Service Company is constantly on the move, up and down, and as you can see on this 1 month chart, the opportunity to take $.25 - $.50 a day is provided on a regular basis, if you have this stock in your basket of stocks, and regularly buy and sell 1000 shares of stock per trade, the returns can be exciting, and in your control.
By daily following sectors and having a few select stocks in each sector, representing your basket, you can move with the market. If the market is excited about medical stocks one day, then the next day it's switched interests to tech stocks, and the next day it once again switches to oil or oil service stocks, the trader is continually moving with the market, which constantly presents the Trader opportunities to earn daily.
