There has been a lot of talk recently about day trading. Some tout it as a way to make big money fast and others have unfortunately fallen victim to the risks of engaging in this type of speculative investing. If you are thinking about day trading, I urge you to think again. Day trading is serious business and not something you just dabble in for fun, particularly if you are using leveraged investment strategies or trading leveraged products.

Whether you’re just starting out or you’re a seasoned investor, day trading is a complicated and risky form of investing. Bottom line−unless you understand the risks you’re taking, and the economics and performance of leveraged investment strategies, such as trading on margin, or using options or leveraged products, you should not engage in day trading.

Day trading involves actively buying and selling securities within the same day, trying to capitalize on short-term changes in price. Those involved in day trading often borrow or leverage capital each day in order to purchase additional assets−but it also substantially increases your risk. This sophisticated level of investing requires meticulous market and news monitoring, is fast moving, and involves a large amount of speculation. Professional day traders are typically very experienced and have a deep understanding of the markets, products, strategies, and the risks. Before engaging in any type of day trading it’s crucial to understand the considerable risks involved.

Day trading is not for the faint of heart as it involves minute to minute decision-making, as well as leveraged investment strategies that can lead to substantial losses. The goal of this kind of investing is to profit from daily short-term market and stock price changes. The risks involved, however, are substantially higher than longer-term investing strategies. A lot can happen during the market day that can result in market and stock volatility that can be a challenge for even the most experienced day trader.

It can be especially difficult to check your emotions at the door when making investment decisions in this kind of environment, which may lead to some costly financial mistakes.

Day trading often involves sophisticated products, and day traders often use leveraged investment strategies. Leveraged investing involves using borrowed capital to purchase stocks or other securities. Some examples of leveraged investing include sophisticated products, such as options trading, and margin trading. Leveraged investing may increase a day trader’s profit if a stock’s price or the market moves in the right direction. However, using a leveraged investment strategy is very risky, and the risks involved may not be apparent to you at first.