Like any other business or occupation, there is a wide range of reasons that people get into day trading. However, given the stress and risk, the goal for most people who try to trade is usually monetary reward and financial freedom.
This begs the question – how much do day traders make? The first thing you should be aware of is that most day traders actually lose money. Given that the stock market is zero-sum, it means every time someone gains a dollar, another person inherently loses one.
This is why we strongly stress getting a specialized education in day trading, investment theory, and wealth management. Read on to see if you’re cut out for a day trading lifestyle. Not all our student day-trade, others are active but spend only a few hours a week analyzing the markets and setting up their trades. Many let their trades pan out while they are busy doing other things.
How Much Do Day Traders Make?
It’s hard to say how much each trader makes. Everyone trades for different reasons and to achieve different goals. How much a trader makes depends on their account size, how consistent they are, and what they are trading. Along with other factors such as mindset.
Some traders start with larger accounts than others, but growing a small account is possible. Daniel X. Bustamante has long been an advocate for trading a small options account, especially for those new to trading.
What Hours Do Day Traders Keep?
Similar to the question of how much do traders make, this is also going to be based on your overall trading configuration. The American Wall Street Exchanges open at 9:30 am ET and close at 4:00 pm ET. However, many brokerages allow pre-market and post-market trading but we do not recommend trading outside of the regular session hours.
Additionally, you can trade Forex, crypto, futures, and other markets at all hours of the day. If you really desired, you could be trading securities 24/7, if you follow all global markets. Here’s a friendly hint for your health and sanity: do not trade (or do anything) for 24 hours a day!
Many experienced traders will set a schedule and stick to it. Others will move theirs around to fit in with their other commitments. We always like to emphasize that the reason you should be getting into trading is for financial freedom but also because there are so many ways to calibrate your life around this wonderful vehicle. Making your own hours is just another one of the positive elements of treating day trading as a business.
What Do I Need to Start Day Trading?
A common barrier to entry for day trading is an understanding of what resources you need to get started. It isn’t overly complicated, but distilling it down to a concise and manageable list should help you avoid over-stressing or adding clutter to your setup. In order to day trade, you will need:
- A Computer: Yes, it is possible to trade from your phone. It’s also still possible to trade from 11 Wall Street in New York. In all seriousness, while the phone is somewhat viable, it still will not support certain brokerages, charting software, and give you the real-time flexibility that a CPU, monitors, and full web-browser will.
If you are going to treat trading like a business, you need to have adequate gear. You don’t need to stop yourself from using your phone in a pinch, but the best tools for leveraging your knowledge and edge in the market involve a desktop setup.
- Trading Captial: As we alluded to, you don’t need to start with millions or even tens of thousands of dollars. However, you do need to be starting with money that you can lose without going hungry or jeopardizing the roof over your head. If you are trading with the last of your essential cash, you will most likely make desperate moves. Desperate moves are the ones that get exploited most in the stock market.
- A Brokerage: You need to have a reputable brokerage that can handle the types of trading you are looking to do. Some brokers do not support certain exchanges or have higher fees for different stock types. Some have great customer support and perks but lack advanced platforms. We recommend doing your own research to see which suits you, but the classics such as Vanguard, Schwab, TD Ameritrade, or iBroker will be a great place to start for comparison’s sake.
- An Education: When it comes to trading we emphasis the cost of not having an education. While no one can guarantee that you will make money, you are giving yourself a better chance of long-term success.
With the right education, coaches, and live coaching, you can get a significant leg up on your competition before you’ve even bought and sold one security.
Learn from the Pros at StockAbility™
At StockAbility™, we take our students’ financial future as seriously as our own. If you are looking to take the next step in asset growth, wealth management, and day trading education, sign up for one of our free webinars.