With the internet available in most people’s homes and pockets, you may be wondering if day trading is possible anywhere now. Certain technology advancements like low-cost brokers and constant connections have made day trading a viable strategy, but it still comes with plenty of risk associated with it. If you’re fine assuming some risk when trading, then day trading might be for you.
Getting Yourself Familiar
If you’re new to the trading game, you might first be asking what is day trading? Simply put, day trading is trading the same stock at least twice in a buy/sell pair in one trading period. You’re allowed three of these in a five-business day period before your broker must flag your account as a pattern day trader. A marginal account with $25,000 is needed to continue trading as a pattern day trader.
Is Day Trading for a Living Possible?
Making a living on day trading is possible, but you should understand that it won’t be easier or less work than your current job. In fact, many of the most successful day traders dedicate upwards of 60 to 100 hours to trading, practicing, and honing their strategies. If you’re not willing to commit this level of time investment to learn how to day trade, then perhaps traditional means of trading would also be viable.
Tools of the Trade
As a successful day trader, you will need to have access to the internet at all times. Trading stocks happen between a specific window for the exchange you’re using, but cryptocurrency can be day traded at all hours of the day. Day trading cryptocurrency can also be a viable way to make monthly income, but it is just as risky as trading stocks and futures.
Benefits of Day Trading
Some of the benefits of day trading include being your own boss. You no longer have to deal with someone else’s unreasonable demands or requests, since you are in control of yourself. You also get to set your own hours. You’ll need to be awake when the market you want to trade in opens, but remember that cryptocurrency day trading is available at all hours. Some of the drawbacks of day trading include the fact that it is a solitary lifestyle. You might have hated how much Anna in accounting talked about her cat, but you might find you miss the human element of interaction with a day trading lifestyle. Most day traders have sub-communities on services like StockTwits and Discord, so see about joining those for tips and tricks.
Is It for You?
The biggest drawback of day trading is how inconsistent the profits are when they come. One month you may be rolling in the green while next month you’re eating ramen to get by. Financial planning can help you weather the storm, but generally, you shouldn’t be relying on day trading income unless you’ve been trading for a few years now. Day trading can be done with a variety of stocks, depending on how much time you want to invest.