Connect with us

Hi, what are you looking for?

Investing

Working as a day trader

Day Trading

Being able to work as a day trader is for many a dream. But it’s not necessarily an easy path to choose and it will require a lot from those who dare venture into the world of online trading.

But what exactly is needed to start day trading professionally and how does an average day look for a day trader?

In the following post, we’ll try to answer that and much more.

Definition of a Day Trader

As defined by the professional day traders over at FincanceRaters.com, a day trader is a person that traders daily, often opening and closing several positions during a day, rarely keeping a single position open for more than a few hours at the time.

Naturally, to be considered a professional day trader, you will have to become efficient enough to make daily returns on your trades.

Now, there are several different ways one can work as a day trader and it’s all based around the instruments or assets that you choose to trade. The two most popular day trading options are to trade either stocks or forex (currency exchange). However, you can also trade commodities, cryptocurrencies, options, bonds, and much more.

With that said, many opt to trade several different assets and can, for example, combine forex trading with cryptocurrencies or stocks with commodities. This is best done using speculative derivatives such as Contract for Differences (CFDs) instead of trading the actual securities of the exchanges.

Required Skills and Tools

To become a professional day trader, one has to master a large set of different skills. Maybe it goes without saying, but the most important skill is learning how to analyze assets in search of value on a said market. Although, that is only one part of the equation.

Skills:

  • Analytics – As mentioned, learning how to analyze financial markets is the key to becoming successful as a day trader.
  • Determination – You need to be determined that you will succeed. Learning how to trade is not easy and it will require a lot of dedication, often for many years on end.
  • Global Awareness – Without understanding what, how, and why certain things happen in the world, you won’t be able to analyze markets correctly. Having a good global awareness is therefore important.
  • Patience – Some days there might not be so many profitable opportunities and at times you’ll be losing more money than you make. The trick is to never give up and to continue grinding.
  • Research Skills – As soon as you start trading, you’ll realize that it requires a lot of research. Not only do you have to research markets and assets but also the tools you use, the strategies that you can apply, etc.
  • Mathematics – Day trading is a mathematical game and if you don’t have a good sense of numbers of calculations, you won’t make it very far.
  • Money Management – Perhaps the most important skill to master quickly is money management. You need a stable strategy for how much you’re going to spend and on what as well as knowledge about how to avoid or limit certain risks.

Tools:

  • Trading Station – Professional day traders rely on a great trading station to aid them in their work. A good computer and at least two screens where you can show multiple graphs at once is the minimum. Many traders also use mobile trading platforms to further optimize their ability.
  • Trading Platform – The above-mentioned trading station will not be of any use unless you also have a trading platform where you make all your trades. These platforms are, generally speaking, provided by brokers.
  • Analytic Tools – In addition to analytic tools provided by a trading platform, most day traders rely on a plethora of other analytic tools that helped them better analyze markets to find potential trades.

Working Hours

As a day trader, you will mainly be working on your own and most often, day trader work from home. Therefore, you will have the ability to control your own working hours after your own needs.

The only thing that you have to adjust to are trading hours. You see, every market and exchange are only open during certain hours. For example, if you want to trade American stocks, you will be working during American business hours, and if you prefer training Asian commodities, you will have to adjust to Asian working hours.

Potential Income

The best part about being a professional day trader is that there is no cap on the potential income. Many day traders make several million dollars a month and on a lucky day, you might even make that in just one day.

The more realistic goal, however, is to start making enough that you can live on the income. From there, you can streamline your skills and strategies to improve your returns.

How to Get Started

How you’re going to learn how to trade depends on the skills you already have and how fast of a learner you are. As a complete beginner, we would suggest that you start studying simple strategies and a few different markets. You can even open a demo account with an online broker to start trading using virtual money.

Just keep in mind that there will always be new skills to master, new strategies to try out, and new markets to work with. In fact, you’re learning curve will never be completed. Even the most experienced traders are continuously working on improving their skills.

Read more:
Working as a day trader

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

By Jenina P. Ibañez, Reporter PHILIPPINE INDUSTRIES are struggling with higher import costs caused at least in part by global supply chain constraints amid...

Economy

ELECTRONICS EXPORTS growth this year could exceed the initial target if supply chain limitations are resolved, the industry group’s top official said. Semiconductor and...

Economy

CAR SALES in May increased by more than four times from the same month last year after coming off a low base. A joint...

Economy

A SECURITIES and Exchange Commission (SEC) panel revoked the license and slapped a P32-million fine on Venture Securities, Inc. (VSI) and key officers over...

Economy

Grid operator says department policy will not eliminate brownouts By Angelica Y. Yang, Reporter THE Department of Energy (DoE) told privately owned National Grid...

Economy

STREAMING your favorite hour-long television show is the environmental equivalent of boiling a kettle for six minutes or popping four bags of popcorn in...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Economy

THE Securities and Exchange Commission (SEC) has warned the public from investing or to stop any investment in a group named Maxxprofit Computer Trading...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!