How To Day Trade For A Living

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If you've been thinking about becoming a day trader and giving up your standard job, then there's a lot you need to consider before you quit your 9-to-5 work week. While day trading can be a great way to make some extra money, there's a lot more to it than simply keeping up to date with the latest stocks to watch or paying a broker to do the hard work for you. 

Introduction To Day Trading

In the days before computers were available to the world, and instantaneous communication was everywhere, many wall street firms employed traders to sit and watch the stock transactions that emerged from mechanical tickers in trading cities. These old-school day traders would be responsible for identifying opportunities for quick profits. Today, day traders follow the same strategy, although they have a much easier way of viewing the changes in the market with the help of the internet including premarket trading and after-hours trading within microseconds of real time market data. 

Could You Be A Professional Day Trader? 

A professional day trader needs several things to succeed in today's competitive marketplace. If you want to make a significant profit on your investments, then you'll need to understand how the markets work, and how small changes around the world can affect the securities that you buy. Additionally, another thing you'll need to be aware of is when you should be trading each day. There are certain times for trading that are best depending on whether you're trading Stocks, Bonds, Mutual Funds, Forex, Cryptocurrency, and Futures. 

Most importantly of all, day traders need a strategy. Some of the most popular day trading strategies include: 

Top Day Trading Strategies

- Scalping:  This is when a day trader sells their position as soon as a security becomes profitable. Usually, this means that trades are made within a matter of minutes instead of hours. 

- Fading:  This is when day traders sell short-sell stocks that are engaging in rapid upward movement. Short sellers often create an imbalance between buyers and sellers to drive stock value downward. 

- Daily Pivots:  These are the traders who may hold onto their stocks for a longer period than the scalpers, waiting for the best price to sell the securities that they bought earlier in that day. 

Choosing A Day Trading Strategy 

While there are many different kinds of day trading strategy to choose from, there's no single plan that works perfectly for every kind of trader. You'll find that as you hone your skills as a day trader, you'll begin to learn more about your ability to manage risk, and what you can do to limit your chances of making the wrong purchasing decisions. Over time, you'll be able to come up with your own unique strategies and put them to the test through things like virtual trading simulators and paper trading. 

Final Thoughts On Day Trading For A Living

One particularly important thing to remember is that even the best trading strategies won't work forever in a stock day trading environment. If you want to stay ahead of the competition and make sure that you're continually bringing in profits, then you need to be willing to upgrade your trading strategy as the stock market continues to change.

And don't forget the golden rule of day trading stocks for a living: never invest more than you can afford to lose! Good luck day trading!

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