Day Trading For A Living
Advancements in technology have ensured anyone with a working internet connection can start day trading for a living from their laptop or PC. But whilst it might be possible, how easy is it and how do you go about doing it?
This guide will look at the benefits of day trading for a living, plus what and where people are trading. Our experts also share their tips to getting started.
- Day trading for a living is possible, but it can be inconsistent and lonely. The financial markets can also be highly volatile.
- To make a living day trading, you will need a suitable setup, a good broker, an effective strategy, starting capital, and a sensible approach to risk management.
- You will also need to be patient and put in time and effort to generate a part-time or full-time salary from day trading.
Best Brokers For Day Trading For A Living
Is Day Trading Long Term Possible?
Successful day trading is certainly achievable, but it is not easy or less work than any other vocation that requires time, study and discipline.
Whether this is a route that you want to try or not, knowing what is required is a useful tool for traders at any level.
Beware – there are many out there who claim to make a fortune on day trading, but usually, these people are trying to sell you something. Don’t believe the hype or that there is such a thing as “easy money”.
Our team have found that there are ways to make it simpler – for example, cutting living expenses or operating ‘side gigs’ can ensure multiple streams of income, if the worst happens.
Despite the obvious allures of taking charge of your investing, comments about day trading full time also highlight some downsides. The most prevalent of which are:
- 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 may fluctuate hugely. You might make $3,000 one day and then lose $2,500 the next (or worse). You 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 results. You may also find it challenging to get back into the business world. Some ‘day trading for a living’ forums have even suggested that you will be less employable by the end.
- The battle against bots – Algorithms, automated systems, and bots are all taking over the market. Statistics show that 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 will need to find new ways to adapt and evolve if you want to maintain an edge.
What Are People Day Trading?
One of the most important decisions you will make is what markets or assets to start day trading.
So what are the popular securities and markets available to those who day trade for a living?
- Stocks – Trade blue-chip stocks like Apple and Meta, plus emerging shares and IPOs.
- Forex – Trade popular currency pairs, such as the EUR/USD and EUR/GBP.
- Commodities – Take positions on popular raw materials such as gold and coffee.
- Cryptocurrencies – Speculate on the price of popular digital assets like Bitcoin and Ethereum.
- CFDs – These derivatives are popular with aspiring day traders, offering access to multiple asset classes and increased buying power through leverage trading.
- Binary options – These financial products offer a straightforward up/down bet on the price of popular assets with a fixed stake and potential payout.
- Futures – These contracts are an agreement to purchase or sell a security for a fixed price on a predetermined date.
- Options – These contracts give the buyer the choice to purchase or sell a security for a fixed price on a predetermined date.
- E-minis – These products are popular with beginner day traders due to their low fees, wide market access and high leverage.
Whether you’re day trading penny stocks or currencies for a living, the volatility and volume in your chosen market will seriously impact your trading and potential. The cryptocurrency market, for example, is highly volatile, which increases good opportunities – but also raises risk significantly.
Whereas, day trading stocks may be more challenging, as it is already a saturated market. In addition, a relatively high amount of initial capital is required and losses could be more financially devastating.
Again, day trading commodities, futures or eminis for a living will present their own challenges, pointing to the need for effective research and understanding.
Our day trading team found that locations create different issues for would-be day traders to navigate.
India, Indonesia or South Africa, for example, not only offer volatile markets for trading, but you also have a very low cost of living, making it more feasible. Access to markets with more volume is challenging, and there may also be time-zone issues too.
Day trading full time in the UK, US, Canada, or Singapore still offers plenty of opportunities, but you have an abundance of competition to contend with, plus high costs of living.
You won’t be short of volatility or volume, but you will need to calculate how much you will need to make on average each week or month to be financially comfortable.
‘How To’ Guide
Making a living day trading is no easy feat as you will have a number of potentially expensive obstacles to overcome. Below, our experts have collated some top tips to help keep you in the black.
The question on many aspiring traders’ lips is, how to start day trading full stop. Firstly, you need just a few fundamentals. Get those fundamentals right and you will be in the strongest position to start.
- Hardware – You need at least a mid-range computer and internet connection. Any hardware or internet crashes could cost you dearly. Many suggest having two monitors up and running, for convenience as well as emergencies.
- Broker – Make sure you pick a broker that suits your needs. In our experience, we have found they need to offer competitive prices, reliable customer support, and an easy to navigate platform.
- Strategy – You need a strategy that suits your intraday trading style. It may rely on charts, patterns, and technical indicators – so ensure you have access to these. In addition, your strategy should enable you to manage risk on high volume, low-value trades.
Location is an important topic. Will you have an office at home or try and day trade remotely in a variety of locations on a laptop?
You may have seen the images of a lone trader sitting behind 6 or even 9 monitors keeping track of all sorts of data – but is it necessary? One alternative to trying to dedicate some space at home to trade is to use rented desk space.
There is also a service that takes things a step further. ETrading HQ offers leased desk and office space, but also day trading data and collaboration.
Like-minded traders can exchange ideas and strategies face to face. The concept is booming in both London and New York and may make day trading for a living much more viable for those concerned about markets data, solitude and office space.
Another question traders may be asking is: ‘how much capital do you need?’ The one requirement of day trading from home 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.
These tough regulations meant that for the majority of people, trading for a living was simply not financially feasible. However, the globalization of the financial industry has allowed numerous platforms to develop outside of strict regulation. Today, you can start day trading with as little as $1,000 in your account.
How much capital you will need will also depend on what it is you want to start trading.
If you want the best chances of succeeding at day trading, you need to utilize a wide range of resources. Fortunately, you can now find free, educational tools with just a few clicks of the mouse. Some of the most effective resources worth considering are:
- Brokers with education – leading brokers offer user-friendly resources with insights into different markets and tips on managing risk and growing your day trading salary
- Communities – ideal for those looking to start making a living by day trading stocks, futures, forex, and cryptocurrencies
- Books – see our list of good reads, including easily accessible Google books
- Ebooks – e.g. ‘The New Trading For A Living ebook’, by Alexander Elder (hassle-free download)
- Tutorial videos
- Study guides
You will find first-hand advice from experienced traders on forums, blogs, and chatrooms. You can also benefit from detailed strategy examples from books, PDFs and tutorial videos – many of which can be found on e-commerce sites such as Amazon and Flipkart. A lot of the ‘day trading for a living’ ebooks, epubs, and PDFs are available for free downloads too and can be accessed via Kindle.
If you are looking for specific guidance on how to make a living day trading forex, head to our forex guide. Alternatively, our stocks tutorial is a great place to start if you are interested in trading stocks from home for a living.
Another increasingly popular service with day traders looking to make a full time living is social trading.
These platforms connect newer investors with experienced traders so they can share tips, market insights and even copy strategies.
Social trading platforms are a great place to learn while trying to generate a salary from online day trading.
If you are looking at how to do day trading, one of the essential components is how you manage risk.
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 need a system that ensures you have enough to make moves, whilst retaining enough capital that you don’t have to stop.
A good system often revolves around stop-losses and take-profits. These allow you to plan ahead and prevent heightened emotions from taking control of decisions.
- Stop-loss – This is simply the price at which you will sell a security and take the loss. It will eradicate you holding on in that hope that it will come back.
- Take-profit – This is the point at which you will sell a security and take the profit. This will help you retain that gain, by enabling you to sell before a period of consolidation kicks in.
If you are trading, consistent and stable profits are the goal – but these are no means guaranteed – you will require a consistently disciplined mind. As Victor Sperandeo highlighted, “The key to success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.”
It may sound straightforward now, but when you’ve got $2,500 on the line and you have been staring intently and tensely at the screen for the last six hours, keeping fear at bay isn’t so easy.
An effective way to limit your emotional liability is to employ as much technical help as possible.
Keeping your emotions in check will take practice, a lot of mistakes and then even more mistakes. However, a neat trick that helps many traders is to focus on the trade, not the money.
Take it from experienced trader Alexander Elder, “The goal of a successful trader is to make the best trades. Money is secondary.”
The number of people day trading for a living since 2014 has surged.
But is it realistic?
The answer depends entirely on your ambition and commitment. It won’t be an easy ride. But, if it suits your working style, you choose the right market and you utilize the tips mentioned, then you could be one of the few that triumph.
How Can I Start Day Trading?
To start day trading full time, you will need to consider the setup you will use to carry out your trading practices. This includes reliable technology and hardware, plus a suitable workspace (whether that is at home or elsewhere).
Utilizing various resources, and knowing where to find them, will also be key to your day trading journey. Finally, choosing a suitable day trading broker will help set you up for success.
Is Day Trading For A Living Easy?
Day trading for a living is by no means easy, especially for those just starting out. The risks are huge, and there are absolutely no guarantees. It is a fact that more people lose money trading online than make a profit. Consider that before getting involved.
How Much Capital Do You Need To Start Day Trading For A Living?
How much capital you need will ultimately depend on where and what you are trading. The cost of living in countries such as the UK, US and Singapore, for example, is much higher than in other nations, so you will need to factor in what costs you will need to cover.
It is also worth considering that most brokers have a minimum deposit. Beginners, in particular, may want to consider brokers with a low deposit. The firms often let new day traders get started with less than $50.
- How to Day Trade for a Living: Trading Strategies & Tactics to Consistently Earn Passive Income in Any Market - Stocks, Forex, Cryptocurrency, Or Options (Bryan Lee, 2020)
- How to Day Trade for a Living: A Beginner's Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology (Andrew Aziz, 2016)
- How to make a Living from Day Trading: Make a High Income Living from Home (Richard Cristopher, 2016)
- The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management (Alexander Elder, 2014)
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