Technological advancements have provided us with an opportunity to trade by sitting at our home. In this article we are going to tell you what are the benefits of doing day trading and how to do that. Along with this we will provide you some beneficial tips regarding the same.
Can anyone live on day trading?
The first thing to note is yes, making a living on day trading is a perfectly viable career, but it’s not necessarily easier or less work than a regular daytime job.
The benefits of being a day trader is that you are your own boss. You are not required to listen to anyone’s command the whole time. Plus you can do your work from anywhere, anytime.
There are many people who claim that you can make profit from day one, but don’t fall under their words. They say so not because they want you to make money, but because they want to sell you something. There is no such thing as easy money.
If you really want to make trading as your career then you have to do some hurdles on your own. Many of the big traders have spent a lot of time on developing their system. So if you want to earn profit from the market you have to develop your own system.
How to Start Day Trading
Benefits & Drawbacks
- No boss – You’re your own boss. No more pandering to the needs of demanding and unreasonable bosses. You can work precisely the way you want.
- Hours – You set your own working hours. In today’s world there is always a market open. So, you can choose when you want to work and for how long, fitting it around other commitments. If you want a four week holiday, there’s no HR department to navigate first.
- Overheads – No more expensive train ticket to get to work. No more petrol and parking costs. No more pricey suits. You simply need a computer, an internet connection and some capital to get going.
- Comfort – Whilst everyone else is ironing their shirt for the day ahead, you can slip into some comfy clothes and begin your 15-foot commute to your desk, with a fresh cup of coffee. No more stuffy office or distracting colleagues to deal with. You work from the comfort of your own home.
- Solitary lifestyle – Your colleagues may have driven you up the wall at times, but sometimes it’s reassuring to have people around. Day trading for a living can get lonely. If you don’t like being on your own, think twice.
- Inconsistent salary – Your salary will fluctuate hugely. You might make $3,000 one day and then lose $2,500 the next. You probably won’t have a stable salary to rely on. On top of that, if you take the day off work you won’t get paid a penny.
- Career progression – The only thing that can improve is your takings. You may also find it challenging to get back into the business world. Some day trading for a living forums have suggested you’ll be less employable by the end.
- The battle against bots – Algorithms, automated systems, and bots are all taking over the market. They are now responsible for a massive 60% of all market volume. Whilst, there will always be a place for humans in the market, you’ll need to find new ways to adapt and evolve if you want to maintain an edge.
What to trade for day trading?
It is important to look out what you want to trade in for starting with day trading. There are many different kinds of assets traded in the market, hence first pick out what you want to trade and start doing work.
The assets that are traded in the market are:
- Penny Stocks
Whatever you choose, the market volatility & volume will seriously impact your profit earning. There are few people who are making good earnings by trading with crypto currency.
There exists a problem that sometimes it becomes difficult for you to choose the asset which you want to day trade with. As the market is already saturated and a high amount of money is required to make good profit which sometimes is financially devastating.
Trading commodities & futures as day trading for living has its own challenges & difficulties.
How to start Day Trading for living?
One thing that comes very first in the mind of a trader is how to start day trading? The answer is very simple, you just have to take care of a few fundamentals. Get good knowledge of all those and here you are ready to make money.
The most basics of them are:
2. Trading Office
Now you have to decide you want to continue your trade from home or want any formal space to carry out the activity. You might have seen traders keeping an eye on 8-9 devices at a time. If you have such huge information to take care of and require more than one system, then you can go for rented desk space.
One of the first questions out of aspiring traders’ lips, is ‘how much capital do you need?’ The one requirement of day trading from home for a living is capital. Roll back the dice a few years and you needed a minimum of $25,000 to start day trading in the US. Not only that, but you always had to maintain at least that amount in your account.
Education is the basis of all the activities taking place in the world. Here education means learning the skill & not reading books and doing nothing. There are many ways in which you can learn about your strategy and regulations. Some of them are:
- Study guide
You can get advice from big traders, blog posts, & chat rooms. You will get details about strategy from books, ebooks & PDF. A lot of trading e books, PDF, epubs are available for free download on the internet.
Risk management is so important yet so inferior that many if the retail traders forget to implement it in their day trading. While, risk management is the most essential thing to consider. As Larry Hite rightly asserted, “Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.”
You are required to put stop losses at the right place in order to earn the right profit. Each successful trader advises to put stop loss so that you do not lose much money.
- Stop-loss – This is simply the price at which you will sell a stock and take the loss. It will eradicate you holding on in hope that ‘it will come back.
- Take-profit – This is the point at which you will sell a stock and take the profit. This will help you retain that profit, by enabling you to sell before a period of consolidation kicks in.