Day Trading for a Living 2020
Day Trading for a Living – Day Trade With $1000
Day trading is rising to popularity among active traders as they want to have the freedom to control how they live their lives and their money. The rise in numbers are also due to free commissions and easy access to many online brokers.
Most beginners want to know whether they can start day trading for a living and whether they can start with a small amount of money like $1,000 or less. In this article, we start with day trading for beginners, move onto day trading strategies, and provide a range of day trading resources to help you get started.
Day Trading For Beginners
If you are a beginner trader who is considering day trading, you need to be well-prepared for it. Day trading involves buying and selling of a financial instrument (stocks, foreign exchange or forex, or futures) in a single day. You can either open and close a position once or make multiple trades per day. Traders look forward to make profit by taking advantage of small price movements in the market throughout the day.
Despite being short-term trading, day trading involves a lot of factors that lead to its success. Research is the backbone of day trading as this will provide you with sufficient knowledge on how day trading works. Other factors such as having the right equipment and deciding on how much capital you will need are also crucial elements.
Can You Day Trade With 1000 Dollars?
Day trading with $1000 is only possible in the forex market. If you are thinking of trading stocks, you will need to have at least $25000. With that said, even if day trading is possible with $1000 or less, it does not automatically mean that you will profit from it instantly. You still need to have a solid plan and strategy to be able to maximize profit and reduce loss.
Can You Day Trade For A Living?
The most straightforward answer is yes, you can day trade for a living, although it is not easy. Before diving into the world of day trading, you need to have enough knowledge about it. Being a day trader means being well-equipped and wise on each of your decisions. The benefits of day trading are that you will work on your preferred hours in the comforts of your own home, making it easier to focus on your work. However, the downsides of it are that it can be overwhelming for a beginner and your income is most likely inconsistent.
Day trading is not for everyone, but if you are set on doing it as your primary source of living, it is best to understand how it works and how you can prepare yourself mentally and physically for it.
Can A Day Trader Make Millions?
Earning millions from day trading is possible but it would entail significant risk. To be able to make millions usually means having a considerable amount of capital, dedicated time for trading, and a great strategy to back everything up. However, even if you have these said factors, it is still not guaranteed that you will be able to earn millions in one go.
Not every day trader has the capacity to invest a high amount from the start, and some would not be able to sustain in the long run. Most day traders also set a personal ceiling for themselves to reduce their chances of losses. To be able to earn millions from day trading would require a lot of resources to start.
Day Trading Strategies
Since day trading requires constant and careful monitoring of price fluctuations, the best way to take advantage of them is to adhere to the strategy you should have prepared beforehand. But how do you come up with a good plan, especially if you are just starting with day trading? Here are some tips:
- Learn and understand. Before you start day trading, you should be well-versed in essential things such as technical terms and the market you are going to trade in. Going in blind would be the worst mistake you could make. Having in-depth knowledge about your preferred market is essential in determining what stocks or companies are worth trading in. Reading and analyzing charts are also excellent skills to have when it comes to day trading.
- Use enough funds. While a high amount is usually best for day trading to capitalize on any price movements, you should only start with the amount you are willing to risk losing. It will prevent the trader from dealing with emotions that may affect their trading performance.
- Dedicate time. Day trading requires quick thinking and decision-making due to the volatility of the market, so you will need to set aside time to monitor it. You never know when an opportunity arises throughout the day.
- Start small. It might be tempting to get as many stocks as you can in a single day, but when you are just starting, you should stick to one to three stocks only. As a beginner, it is better to do well in a few stocks rather than risking more money in many.
- Plan a good trading strategy. To make up with a good day trading strategy, you need to take note of the three essential components: volume, volatility, and liquidity. Your decisions during day trading should be based on these three components as they are vital in choosing the right stock.
Some of the most common day trading strategies that day traders use are:
- Range trading
- Relative Strength Index (RSI) and Stochastic Oscillator
- Momentum trading
- High-frequency trading
Do note that it is not advisable to change strategies every time. Read about the different day strategies and select one that you can practice over and over again until you master it. A good trading strategy also needs to be backed up by a strong risk management tool that will limit your losses.
In day trading, there is a famous saying that goes, “Plan the trade and trade the plan.” This emphasizes the importance of sticking to the strategy that you come up with. Discipline is also a defining factor of your success in day trading. Many day traders tend to let their emotions get the best of them which can ruin their trading strategy and then end up with significant losses.
Why Do Most Day Traders Fail?
Some people might think that day trading is easy just because everything is done in just a day. However, it is the complete opposite. Many beginner day traders do not realize that day trading is very risky, especially to those who have not prepared beforehand. Another problem is that some of these people also do not have a proper strategy and risk management to aid them during trading. Since day traders are usually on the lookout for small fluctuations of prices throughout the day, it is vital that they carefully plan out their entry and exit points that will either help them earn or cut their losses.
Another reason why most day traders fail is that they expect to make a profit immediately when, in fact, they do not. Some also forget to set a personal ceiling that prevents them from spending more than what they have, which results in them incurring higher losses. Emotions have a huge role in day trading as they can change the mindset of a trader in a short amount of time, especially since things happen quickly in this type of trading.
High expectations are also a great cause of the downfall of most beginner day traders. They tend to anticipate that they will be able to make a profit on the first try when, in fact, it will take some time before they could grasp how day trading works.
How Many Hours A Day to Day Traders Work?
Day traders usually devote 2 to 5 hours a day for their work. It will all depend on the personal preference of the trader and what his goals are for the day. They would also spend a few minutes to prepare for the actual trading and review their performance at the end of it.
What Type Of Trading Is Most Profitable?
Any type of trading is profitable as long as you have enough knowledge and have a good grasp of how a particular trading type works overall. Most traders prefer long-term trading as this can give them a better overview of the market and also give them time to make wise decisions. However, short-term trading such as day trading can also be profitable with adequate preparation for it. The most important factor of a day trading’s success is to have a well-thought-out strategy that utilizes the right indicators and a risk management tool to reduce any potential losses.
Day Trading for A Living Statistics
Day trading has become a popular active trading style today, but not everyone who starts doing it can maintain it as their full-time job. This is understandable as day trading is considered as high-risk trading involving a huge amount of funds and thorough planning and execution.
Despite rising in popularity, the number of day traders is still small, making some people wonder if there are day traders who have been doing it for a living and if they can also do it on their own.
What Percentage Of Day Traders Are Successful?
There is no exact number that can tell how many day traders are successful as they usually do not disclose their trading results to anyone. Some say that only 10% of day traders become successful and only an even smaller percentage who actually makes money from it.
However, most information on the Internet agree to one thing: the majority of day traders fail and stop trading a few years after starting. Those who have been successful have already developed their trading strategy and maximized its potential before handing over a significant amount of money. Unfortunately, not everyone has the patience to come up with and stick to a strategy and have a considerable amount of money in their pockets all the time, leaving only a small percentage of day traders who can make a profit.
Who Is The Richest Day Trader?
One of the best known richest day traders today is Paul Tudor Jones. He is the founder of the hedge fund Tudor Investment Corporation and has a reportedly accumulated wealth of $5.1 billion today. During the stock market crash of 1987 (also known as Black Monday), Jones was able to triple his capital to 62% by holding short positions and using the portfolio insurance strategy.
Portfolio insurance is a risk management tool that is used to limit the losses of a portfolio of stocks, especially when the market conditions are highly irregular. In this hedging strategy, losses are limited by buying stock index puts that will protect the portfolio from risk.
Later that year, Jones was able to earn $100 million for his company and then, during the years 1992 to 1995, he served as the chairman of the New York Stock Exchange.
10 Best Day Trading Books
Before you can day trade, you need to have extensive knowledge of it and the technicalities that surround it. Fast decision-making is vital when it comes to day trading and, to do that, you should be able to identify the trading indicators that will give you the right stocks. Studying and understanding the market while also looking for the appropriate signals are two critical factors for day trading success, and the best way to start the process is to rely on top resources.
There are many available day trading books that you can consult with regards to risk management, strategies, technical analysis, and the whole process of day trading. Whether you prefer to day trade in the stock market or the forex market, you will surely have many options to choose from.
Stocks Day Trading Books
- Beginner’s Guide to Day Trading Online by Toni Turner
- How to Day Trade For a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology by Andrew Aziz
- Start Day Trading Now: A Quick and Easy Introduction to Making Money While Managing Your Risk by Michael Sincere
- Mastering the Trade by John F. Carter
- Day Trading For Dummies by Ann C. Logue
- The Truth About Day Trading Stocks by Josh DiPietro
- The Stock Trader: How I Make a Living Trading Stocks by Tony Oz
- The Art and Science of Technical Analysis by Adam Grimes
- Digital Day Trading by Howard Abell
- How to Day Trade Stocks For Profit by Harvey Walsh
Forex Day Trading Books
- Day Trading and Swing Trading the Currency Market by Kathy Lien
- Currency Trading for Dummies by Brian Dolan
- Japanese Candlestick Charting Techniques by Steve Nison
- Forex Trading: The Basics Explained in Simplest Terms by Jim Brown
- The Disciplined Trader by Mark Douglas
- How to Make a Living Trading Foreign Exchange by Courtney Smith
- Forex For Beginners by Anna Coulling
- The Black Book of Forex Trading by Paul Langer
- Forex For Ambitious Beginners: A Guide to Successful Currency Trading by Jelle Peters
- How to Start a Trading Business With $500 by Heikin Ashi Trader
10 Best Day Trading Blogs
Sometimes, books are not enough to understand day trading. Many people also often find books overwhelming to read and they want to consume content that is easy to digest. This is why aspiring day traders turn to blogs because they offer the latest information and update their content regularly.
Stocks Day Trading Blogs
If you are thinking of pursuing day trading in the stock market, below is a list of blogs that you can follow:
- Warrior Trading Blog
- Day Trade The World
- Stock Market Analysis
- Livestream Trading
Forex Day Trading Blogs
If you are planning to trade currencies, here are some blogs that might help you succeed in the forex market:
- Marc to Market
- Day Trading Forex Live
- Day Trade to Win
- Top Down Charts
10 Best Day Traders on Twitter
In day trading, your success relies on being continuously updated on the market conditions for the day. You need to determine which companies or stocks that are going to be favorable. In this day and age, getting the best news in real-time has been made possible with social media, particularly Twitter.
Many traders have dedicated their time to share their insights and market news that help other day traders on Twitter. The social media platform is perfect for real-time updates and makes it easier for day traders to keep up with the latest news throughout the day. But there are already many day traders on Twitter, making it challenging to identify which users are worth following. To help you save time scouring the platform, we have compiled a list of the best day traders on Twitter:
- Nathan Michaud (@InvestorsLive)
- Marc Lehman (@markflowchatter)
- Warrior Trading (@WarriorTrading)
- Bryon Fanzen (@bkfViking123)
- ZeroHedge (@zerohedge)
- Stock Lock Trading Alerts (@stocklockalerts)
- Jared Wesley (@ScalpMaster1)
- Profit Trade Room (@ProfitTradeRoom)
- Mojo Day Trading (@ProTrader_Mike)
- Live Traders (@Live_Traders)