How difficult is day trading for a living?
Nothing in life is difficult if you're willing to work very hard at it, study constantly and devote most of your life to accomplish your goals. To be a trader you must first learn how to invest. You must know the products and the markets in which they trade, how security transactions are cleared and more importantly you must know the rules that govern those products and markets. So you must know what you’re doing, why you’re doing it, and how to do it. You should start by reading “Investing for Dummies” by Eric Tyson. To be a day trader you must first know how to trade and in order to trade you must know how to invest. To day trade you need several years experience as a trader. You must know the products and the markets in which they trade, how security transactions are cleared and more importantly you must know the rules that govern those products and markets. So you must know what you’re doing, why you’re doing it, and how to do it. And most importantly you must have the capital to finance your transactions, a decent day trader should have least $50,000-$100,000. Before you enter your first order you need to address four major policies and have very strong discipline to follow them 1 - You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don’t try to out-smart the market, you’ll loose but if you always take what the market is willing to give you, you’ll be successful. Other words, you don’t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose 2 - A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away - don't loose more than you need to and don't be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up. 3 - You must have sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it. 4 – A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them. Unless you are willing to study and follow the above you will never make it as a trader. To be successful as a trader it takes work and constant study of the markets and the products traded in those markets, there is no easy way and it will take you several years before you should even think about day trading.
Not difficult at all. How can sitting at a computer and making choices be difficult? But if you don't know "how" to do it, and you go in blind, then you are just asking them to take your money.
zman492: Very difficult. From the SEC
Very difficult. From the SEC: "Day trading is extremely risky and can result in substantial financial losses in a very short period of time." https://www.sec.gov/fast-answers/answersdaytradinghtm.html "While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring." https://www.sec.gov/reportspubs/investor-publications/investorpubsdaytipshtm.html For a lengthier discussion of trading from the SEC see https://www.sec.gov/news/studies/daytrading.htm ----- Some people are very successful at day trading, so if you start with enough money it is possible to support yourself day trading. Just remember that even successful day traders have losing streaks and need not only enough cash to live on during a losing streak, but also enough cash to keep trading at the end of a losing streak.
The greatest day trader in history was Jesse Livermore, 100 years ago. He started out as a poor farm boy. He made, and lost, and made again, and lost and made again, and finally lost (and committed suicide) fortunes as large as anyone in the USA at the time (including Andrew Carnegie and J.P. Morgan). He had the advantage of no SEC regulation. He was also really lucky. He was the prototype for "The Great Gatsby". Even he started small, with a tiny amount of borrowed money and the wages of long and hard work. Basically, it's impossible to make a living as a day trader. You can take big risks, and if you're lucky you'll do well at first, perhaps very well, but over the long term it's a losing proposition. Eventually one or more of those big risks will go wrong and wipe you out. By careful study, the purchase of good advice, cautiousness and patience, you can beat the market averages by a few percent, which is to say you can consistently get about a 10% return on your money per year, so if you're managing a million dollars you can consistently make $100,000 a year. That's about it.
To you have an advanced knowledge of establishing trading algorithms? No? Several hundred million in capital? No? Good luck with that.
Day traders must have enough cash to survive a market downturn or a trading slump. Freedom is severely affected for day traders. Several trading firms hire phd (mathematics experts) to program servers to trade markets and this makes it really impossible for any day trader to beat the market.
Very difficult. Not to say it cannot be done but it is not easy. Don't fall for any scams, you need to study and study hard.
The most stupidest thing u could do.
Day trading is a negative sum game--a loser's game.
It is difficult, and it is essentially a pipe dream for most speculators. Consider that the greatest investors such as Warren Buffett and Peter Lynch could sustain only a 20% return. If you made a 20% return on $100,000 you are only making $20,000 per year. The idea that you can take $10,000 and make a $100,000 per year salary is fiction. IF you want a true insight into the realities of day trading, read "The Way of The Turtle". It is probably the most accurate representation of the methods and probabilities of successful day trading. If all the people writing books and giving seminars on day trading were making a fortune day trading, they wouldn't be putting on seminars and writing books to earn a living. I've seen a lot of people touting day trading, however, I have never met anyone day trading for a living successfully.