The potential income that day traders can bring in is quite subjective: they have the opportunity to make millions and the chance to lose everything. Day trading is a popular job for people with stockbroker experience, folks who have spent years studying the market and novice traders who get their start watching CNBC and BloombergTV. Though it is an easy field to enter, staying in it for the long haul is challenging due to the constant fluctuation of the markets and the fact that the only guarantee is the fees you will pay to trade.
Traders With Firms
Day traders are rarely salaried employees. The employed are often with a brokerage firm to learn the ins and outs of the position while studying for stockbroker exams like the Series 7. Pay for these trainee positions is little more than minimum wage since the purpose of the position is education and exam preparation. Day traders and broker trainees are not interchangeable but the same essential trading principles apply, only in a much shorter time frame, and the training can help aspiring day traders to make successful trading moves.
Many who join trading groups must make a contribution of their own capital to the group to trade with a portion of the group's overall capital. The good part of trading groups is that you are still essentially working solo but you have added support and training to help you increase your odds of making money as a trader. Even with the support of the group there is still no guarantee of profits. According to BeADayTrader.com some traders average a loss or gain of £130 per day; some make upwards of £3,250 and others lose £650 to £3,250 daily.
Persons trading their own capital have the potential to make as much or as little as traders working with firms or groups. As a solo trader, your transaction fees can eat away at your personal earnings since solo traders often have to pay slightly higher transaction fees than those trading with firms or groups. Solo traders must also start off with a considerable amount of their own capital or trade with a margin account to see any financial gains in the fast-paced world of day trading.
The main key to success as a day trader is staying consistent with the strategy you use. Implement stop-loss orders with every trade. You will need to have a mental stop-loss as well: the point at which you will close out a position to stay sane in the trading game. Finding a strategy that works best for you will take research and experience. Save up as much as you can before entering the day trading game and use as little margin as possible to avoid going into debt as a result of trading losses.
Keeping a cash cushion is necessary for any trader, as are alternative sources of income. Day trading is not the same as gambling because of the consistent fundamentals that move a stock price up or down, but some people consider it to be just as risky. Make specific stock choices such as buying and selling the same few stocks over and over again: a Wall Street Journal article on single-stock day traders mentioned two traders who routinely made £1,300 or more per day. Ignore "hot stock tip" newsletters. Stay conscious of your transaction fees, commissions and use of margins.
- 20 of the funniest online reviews ever
- 14 Biggest lies people tell in online dating sites
- Hilarious things Google thinks you're trying to search for