Return of the Daytraders?

Now that the markets have calmed somewhat, will daytrading become popular again? The question is important not just to daytraders themselves, but to average investors. If the seasoned troops don't feel ready to hit the trenches quite yet, average investors should definitely think twice before trying their extreme strategies.

You know the story, of course. Daytrading peaked in popularity during the late '90s. Back then, you'll recall, share prices of overinflated tech stocks -- especially Internet stocks -- routinely moved by $20 or more in a single day. That presented traders with lots of opportunities, because volatility is the stuff they thrive on. The heady times gave many neophyte daytraders a false sense of confidence. A rising tide lifts all ships, as the saying goes. Meaning: Just about any strategy a daytrader employed appeared to work.

Then the crash of 2000 changed everything. Maxed out on margin, their portfolios over-weighted with volatile stocks, many daytraders watched their net worth plummet in tandem with the Nasdaq's 60% decline. ...