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Day Trading in Canada – More Canadians have turned to it following the pandemic

Although most Canadians are returning to in-person work, a significant rise in day traders observed throughout the pandemic shows no signs of letting up. With COVID-19 causing many Canadians to re-evaluate their financial standing, untold thousands have turned to day trading as a means of generating income (or at least attempting to). In fact, major trading platforms like Wealthsimple Trade and TradingView have noted 80% and 131% rises in new users, respectively. Among these new traders, it’s only natural that there tends to be a sunny outlook upon entry to the markets. At the same time however, experts warn that there eared risks even amidst promising markets.

Day Trading’s Open and Attractive Landscape

Because day trading is best explained as buying and trading assets within a single day, it offers a more “forgiving” work schedule that attracts new traders. Plus, since day trading most commonly occurs in foreign exchange (forex) and the stock market, new traders can get started in exchanges that are viewed as “beginner-friendly.”

Where stocks are concerned, the fact that the market directly concerns company shares means that the average Canadian can at least make educated guesses regarding market movement. This can be done simply by monitoring company and industry updates, as well as visible trends in price swings. To offer a clear example, Reuters’ Canada stock market coverage recently noted that Air Canada’s shares had jumped by 4.8% following the reopening of borders and air travel. It’s a market swing even a beginning trader could have anticipated.

As for forex, the perception of “beginner-friendliness” comes more from the size and nature of the market. FXCM’s introduction to forex explains that the market offers “abundant opportunities” for new traders on the basis that it’s open 24/5 and has unmatched liquidity. What this means is that at any time during the work week, a beginner can execute a trade with full confidence that it will go through smoothly and as ordered. In short, the process of trading is perhaps easier in forex than anywhere else (even if learning to read the market is still a challenge).

Another reason for the increase in day traders is the proliferation of trendy investments and influencers touting their own trading gains. In Maclean’s report on pandemic traders, it was determined that many of the younger traders who have joined the markets were persuaded to by activity they saw online. Dubbed the “Lambo Lifestyle,” this glossy picture of a day trade side hustle reaping almost immediate success has attracted many — with some new traders even quitting their regular 9-to-5 jobs to pursue trading full-time after seeing their first positive returns.

Experts Warn of Losses

Despite the fact that day trading can be profitable (and has made some people wealthy), experts fear that new traders rushing to the markets may not find success. This is because most enter the day trading game without having realistically planned out strategies or conducted adequate research. To that point, some surveys have revealed that most day traders jumped right in on the sole basis that they’d seen friends join. On top of this, financial analysts at Investment Executive suggest that new traders are in some cases using their savings or their government checks to make trades, rather than relying on dedicated investment capital. Needless to say, this adds an extra dimension of risk.

Additional concerns stem from the fact that many new traders belong to the Gen-Z and millennial demographics. As it happens, people in these age groups are more likely to fall below Statistic Canada’s “Low Income Cutoff” line. Now, there is potential for people in these age groups to turn their fortunes around as well. New traders are typically not likely to outperform markets, however, which means negative outcomes need to be considered as well.

In conclusion, although analysts don’t discourage average Canadians from day trading, they do recommend exercising caution. Allocating only a small percentage of savings, embracing patience, and crafting a carefully prepared strategy is the safest approach, and the most likely to yield real (if gradual) gains. Otherwise, entering a new market amounts to something closer to wishful daydreaming than true trading.


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