How to Become a Day Trader in Stocks

Some people imagine successful day traders as multimillionaires lounging on a beach and trading but day trading isn’t as easy or lucrative as it seems. Despite challenges, some still choose day trading as a part-time or full-time job, If you know your stuff and follow a strategy, you can make money over time through day trades. I’ll explain how to become a day trader if you’re interested in this article.

How to Become a Day Trader in Stocks

What is day trading?

Day trading involves buying and selling securities and stocks within the same day to profit, a day trader closes all positions and realizes gains or losses at market close, trade times can range from a minute to several hours per day and a day trader typically trades four times in five days. Day trading is the opposite of long-term investing, which aims to gain value over time. Day trading involves buying dips and selling high in the short term; long-term stock prospects matter less than immediate volatility.

Two types of day traders:

  1. Professional day traders work for large financial institutions. They have the tools and training to be successful and don’t trade their own money. It’s client and firm capital, so personal equity isn’t at risk.
  2. Individual traders are more common. Traders focus on market, technical analysis, and price movements. Fundamental data guides their market awareness.

Day trading isn’t without its challenges, losing money is inevitable while you learn, understand, and are comfortable with your work will take time. Even if you know the strategies and terminology, use the warning as motivation to persevere and succeed.

Steps to becoming a successful day trader.

First, take a trading course.

Get educated to understand the market, TD365’s online stock trading course can help you become a day trader. Trading is not luck-based like gambling and the course teaches the science behind significant trading decisions. Education builds skill, skill ensures consistency, consistency leads to discipline, and in day trading, discipline empowers investors.

2nd step: Research

Your journey to becoming a day trader begins with market research, finding the right strategies, and potential platforms, AI trading software can help beginners. Before becoming a day trader, you must understand which markets to trade such as forex, stock, or index market.

Step 3: Set aside feelings

Some people think of successful day traders as multimillionaires in expensive cars and restaurants. Who could resist? If you want to become a day trader, you must understand from the start that materialistic gains will lead to failure. Successful traders don’t follow their emotions or desires.

Step 4: Start Small

After learning about the markets and how to trade, start small as putting a lot of money on the table to start day trading is a risky move for a new trader. Day trading is risky, so use the money you’re comfortable losing. As horrible as it sounds, you should detach your emotions from your trading capital to avoid emotionally-driven trading decisions.

Step 5: Stick to your trading strategy

Most traders make money on small price movements in liquid stocks or indexes with high volatility and a long or short price movement is needed to make money, for this, entry and exit techniques are key to successful trading. Once comfortable, most traders stick to a similar trading style. Some only trade one or two stocks a day, while others trade a small basket of favorites, but this preference is yours to make, and once made, you should stick to it. Be consistent!

Test a process with fake trades, find your best process, and experienced traders define a trading setup and the pattern and indicator combination they want before trading. They stick to routines to stay focused and in check as It’s easy to deviate from what you know you should be doing due to trading emotions and hunger for success, but you must learn to be strict, disciplined, and mechanical in every step of analysis and trade execution. Yes, you must be robotic in your process.

Day trading salary and stats

Day traders in the United States make an average annual pay of $116,895, which translates to an hourly wage of $56. The highest 10 percent of earners bring in more than $198,000 annually, while the bottom 10 percent make less than $68,000 annually.

The majority of day traders are men with only 9.5% of day traders being women, while 90.5% are men. White individuals make up 71.6% of all day traders, making them the most prevalent racial and ethnic group among day traders. At 36.4%, Spanish is the most popular language spoken by day traders who are also fluent in another language.

Part-time stock trading

Most day traders only trade for one to three hours per day, while some day traders trade all day, the best gains in the quickest period are usually around the stock market’s opening and closing. 9:30 a.m. and 4 p.m. and you should focus on the open when starting part-time day trading. Start preparing for your initial trades around 9 or 9:15 a.m. The first 30 minutes of the day are the most volatile and offer the biggest profit possibilities. Finish trading by 10 or 10:30 a.m. if you have an hour.

If you have time, trade until 11 a.m. EST. As lunchtime approaches, there are fewer possibilities and trades take longer as volatility declines. If you can only trade later in the day, consider 3:30 to 4:00 p.m. EST. The trading day concludes at 4 p.m. because day traders close all positions before or at the closing bell.

Recommended Day Trading Broker

Take your time when selecting a broker because day trading typically results in higher costs due to the huge number of trades that are executed in a single day. Low trading fees should boost profits and TD365 believes all CFD brokers should disclose trading costs (many don’t), they offer honest and upfront pricing so their clients know how much they’ll be paying for every trade.

TD365 offers tight, set spreads that don’t vary throughout volatility on an easy-to-use super fast trading platform.

Visit TD365

Published by Enda Trading

Trader and YouTuber from Ireland.