Day-trading and the Cognitive Limitations it can Impose
Day traders attain profits or losses based on their accuracy in predicting how different events and capital market conditions impact the value of a stock in a day-to-day setting. Subsequently, day-trading processes are heavily dependent on economic speculation and computer algorithms. Day traders are typically keen to determine how different events will impact the value of paper assets in the capital market, in turn, exploit them to attain financial gains. However, the daily price fluctuations in the stock market may not reflect changes in the company's intrinsic value that influences lasting impacts on the processes and outcomes of the firm in question. Subsequently, day traders are likely to dispose off great stocks for immediate financial expenses at the expense of more significant rewards that may be attained in the long-term.