As we start investing, a common trap most emerging investors fall into is the urge to day-trade. Day traders try to time the market and make money by capturing inefficiencies in the market (e.g. stock price dipped midday just to recover by the end of the day.)
Day trading is notoriously hard and it's where most people lose their money. Before we even consider day-trading, we need to understand a significant IRS rule.
Dangers of day trading
If we continuously buy and sell meme stocks like $GME and $AMC, the IRS only recognizes the money we make on our good trades and none of the money we lose on our bad trades for the year.
To avoid the wash-sale rule, we need to wait at least 31 days to repurchase what we sold. Otherwise, any losses booked will not help our taxes.