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In our last episode we talked about investing versus trading. Today we’re zooming in on one specific kind of trading that has captured a lot of attention, and cost a lot of people a lot of money.

Day trading.

It promises quick wins, control, and excitement. But the data, and more importantly, the wisdom of Scripture, tells a very different story.

It’s helpful to remember there are different kinds of trading.

Quick reminder:

  • Investing seeks to put capital to work in a company over the long term for potentially great rewards.
  • Trading is more like the get-rich-quick mentality… trying to capture quick “wins.” It’s not really putting money to work in a business.

The two main short-term approaches:

  • Day trading: Buy and sell within a single trading day. You end every session in cash.
    • This is why short-term capital gains tax brackets exist… if you’re treating it like a job, the government taxes it like one.
  • Swing trading: Hold for a few days to a few weeks, trying to catch momentum moves.

I’m less concerned about swing trading than day trading, but both carry a short-term bias that usually doesn’t serve the everyday steward well. Both tend to focus on individual stocks (or leveraged ETFs) rather than diversified, long-term ownership.  

Short term is technically anything you own for less than 1 year. It is taxed closer to your income tax rates. If you are treating your “investing” like a job, they are going to tax it like a job.

 

 

The Dangers and Risks of Day Trading

 

  1. Statistical Reality: Most People Lose Money

Studies from regulators, academics, and broker data consistently show that 80–90%+ of day traders lose money over time. The small percentage who profit often do so inconsistently… and many give the gains back.

  • Jordan & Diltz (2003): Roughly twice as many day traders lose money as make it. Only about 20% were more than marginally profitable.
  • SEC warnings: Day traders “typically suffer severe financial losses in their first months… and many never graduate to profit-making status.” 
  • 90% of day traders lose 90% of their funds within 90 days, underscoring the importance of risk management.  (Quantified Strategies) 
  • Multiple summaries of 2025–2026 FINRA and industry data: Only 1–4% make money consistently long-term.

Investing Statistic:

Compare that to long-term investing: JP Morgan’s Guide to the Markets shows roughly a 75% chance of a positive year in the stock market in any given year!!!

Scripture tie-in:

As Proverbs 13:11 (ESV) says, ‘Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.’ 

The data simply confirms what Scripture has always warned… haste rarely produces lasting fruit.

 

  1. High Risk + Leverage Amplifies Losses

Day traders often use borrowed money! 

One bad trade or sudden market move can wipe out an account… and leave them owing more than they started with. It creates the illusion of a “sure thing” while long-term diversified investing relies on the quieter power of compounding.

 

  1. Time, Stress, and Opportunity Cost

It demands constant screen time, monitoring, and a lot of emotional energy.  The end result very well could be stealing time and energy from your family, ministry, rest, and other needed and productive work. Many that are into Day Trading describe it as addictive… dopamine hits from wins, then chasing losses.

Scripture tie-in:

Colossians 3:23–24 (ESV) reminds us, ‘Whatever you do, work heartily, as for the Lord and not for men…

Day trading often pulls us away from honest labor that builds real value and allows us to be even more generous to Kingdom work. The opportunity cost isn’t just financial… It’s relational… and spiritual!

 

  1. Emotional and Psychological Traps

Fear, greed, FOMO, and revenge trading are common. Wins can create overconfidence and bigger bets. It often feeds the “get rich quick” mindset we’ve talked about before.

  • Think about the WallStreetBets meme stock frenzy. People made wild bets chasing huge gains… or took massive losses. It’s really just gambling.
  • Tim: mention the market in 2020 and 2021… it felt like easy money. Then 2022 came and it got hard. That showed investing takes real work and research. Markets go up… and markets go down.

The trap for day traders is using the wrong approach, then concluding the market is “rigged.” Long-term investors tend to avoid that mistake because they’re not relying on daily wins and losses.

Scripture tie-in:

First Timothy 6:9–10 (ESV) gives a sobering warning: But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils…

That snare is very real within the day trading culture!

 

  1. Tax and Regulatory Complications

Short-term gains are taxed at ordinary income rates (often higher brackets). 

Pattern Day Trader rules (even with recent changes) still create friction for smaller accounts. 

Hidden fees and platform incentives add up. If you’re not setting aside money for taxes, you’re setting yourself up for trouble!

 

  1. It Often Crosses into Gambling / Speculation

Unlike investing (ownership in productive businesses), day trading is frequently zero-sum speculation on price movements detached from underlying value. 

It can become a form of idolatry… trusting “the market” or your own skill more than God’s provision.

Scripture tie-in (strong landing point):

Jesus said in Matthew 6:24 (ESV), No one can serve two masters… You cannot serve God and money. 

 

When the screen becomes our primary focus, we have to ask honestly: who or what are we really serving?

 

New Day Trader Rules Increase Risk of Loss for Novice Investors

The Financial Industry Regulatory Authority (FINRA) previously enforced the Pattern Day Trader (PDT) rule requiring $25,000 minimum equity for frequent day trading in margin accounts. Regulators have now replaced it with a more flexible, real-time intraday margin system.

Key changes:

  • The old $25k threshold and automatic trading freezes are being phased out.
  • Brokerages now monitor real-time risk instead of a fixed account balance.
  • Standard margin rules still apply (generally need at least $2,000 equity to use leverage).
  • Full implementation rolls out through October 2027.

Note: The old PDT rule never applied to futures, forex, or crypto… those markets have always been more accessible (and often more dangerous) for retail traders.

 

Closing / Application 

Our consistent advice for the good steward is to be a long-term investor, not a short-term trader.

We encourage you to:

  • Keep a long-term perspective
  • Invest in companies that actually make the world better
  • Live debt-free
  • Maintain an emergency fund
  • Be generous

Practical alternatives to day trading include broad index funds, dollar-cost averaging, or building/owning a real business that creates value.

Scripture tie-in for the close:

Luke 16:10 (ESV) says, ‘One who is faithful in a very little is also faithful in much…

Faithful stewardship often looks like patient, consistent obedience rather than chasing dramatic wins.

 

 

Closing:

Day trading promises excitement and control. But more often it (as statistics prove) delivers stress, strong potential of financial loss, and distraction from the things that actually last.

The real question isn’t just ‘Did I make money today?’ It’s ‘Am I being faithful with the finances that God has entrusted to me…along with my time and talents?’

Long-term investing, living debt-free, building margin, and being generous… These are the quiet, compounding practices that honor God and serve your family well. If day trading has been pulling you away from those things, it’s time to step back and re-evaluate.

Schedule a stewardship review with us. 

Let’s look at your situation together and help you move toward wiser, more faithful stewardship…of your time…talents…and HIS treasure that he has entrusted into your hands.

 

 

Next Steps

 

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The topics discussed in this podcast are for general information only and are not intended to provide specific investment advice or recommendations.  Investing and investment strategies involve risk including the potential loss of principal. Past performance is not a guarantee of future results.

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