The Day Traders Advantages - Getting Out of Drawdown Fast

If you've ever tried to make money Day Trading the worlds markets then you'll know that large profits can be made but if you don't know what you are doing you can also get caught by larger than usual losses. If you are willing to work at day trading and really hone your skills then you stand to make some amazing money but the learning track can be long and arduous.
If the road to day trading success appears difficult at first then just remember that the ability to replace your current income by trading the worlds markets will take time and usually won't happen overnight as the saying goes. Today we're going to have a look at the day traders advantage and how you might be able to use that in your own trading.
Your trading profile - which category do you fit into?
The main types of traders you have are short term day traders, swing traders, medium term traders and long term investors. There are a couple of unique points about each type of trader but one of the main distinctions is the frequency of trading. Ultimately the major advantage a day trader has is the high frequency of trading which allows them to apply their edge in the market and potentially recover from drawdowns quicker.
The formula for profit
There is a formula for working out your trading profits and that goes along the line of expectancy multiplied by Risk per trade multiplied by Opportunity. Today we'll be focusing more specifically on the opportunity component as that relates to the amount of trades a day trader makes compared to any other trader.
High Frequency trading and the benefits
Malcolm Gladwell wrote a fantastic book titled 'Outliers' and in it he describes how 10,000 hours of practice tends to be the critical point of going from average to superstar in any field of activity. Trading is no different so take a moment to think about how many trades a day trader does in a year compared to a medium term investor. Some active day traders can make over 200 trades in one day whereas medium term traders might do 50-100 trades per year.
So one of the greatest advantages of a day trader is their ability to make hundreds of trades in a short space of time and be able to learn from that experience. Over the course of one year the difference could be thousands and its this practice or real time trading that sets the day trader apart and gives them an advantage.
Another subtle advantage of day traders is their ability to climb out of drawdown so much quicker than any other type of trader. Once again the frequency of trades allows this to happen. If as a trader you head into the abyss known as drawdown it may take quite some time to recover and largely it does depend on how bad the drawdown is. But suffice to say that a day trader, through the sheer number trades they take, is able to pull themselves out of drawdown much faster than any other style of trader.

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