Who or What is a Day Trader?
The day trader buys and sells stocks, currencies, or futures to profit from price swings that occur within a single trading day. However, there are consequences to day trading. The profession may seem exciting and simple to do, but few individuals are successful.
Successful day traders thoroughly understand the forex pairs or stocks they buy and sell, and the mechanics of trade execution, that is: when to enter a trade (hold them), and when to close a trade (walk away).
A day trader’s ultimate purpose is to profit from a volatile market. If conditions are favourable for a day trader, there must be a significant understanding of the forex pairs or stocks being traded, and of how one’s trading techniques can be complemented by an appropriate trading platform.
There are two types of day traders: those who trade individually and those who take a job in a brokerage firm or financial institution.
Day traders and their trading styles vary tremendously. Working individually, they frequently handle money for other people or may use their own. If a prospective trader has no funds to trade with, one cannot compete with the company (prop firm) trader.
Day traders typically hold their securities for a day (or intraday), meaning savvy traders close their positions at the end of each day.
Day Trader Salary
How much does a day trader make? US day traders, whilst within a corporate setting, can make up to $116,895 a year, or $56 ph. You have got to be in the top 10% to make over $198,000 a year, while the bottom 10% earns just under $68,000. ( Traders who operate alone, or within their own prop firm structure, experience a different pay structure)
Lauren Simmons was the youngest and only the second black woman to ever trade on the floor. Despite her business acumen, she was at the bottom 10% while trading on Wall Street. Lauren Simmons earned only $12,000 a year, while her male counterparts earned six figures.
Still, the best advice for women thinking about day trading is to be positive and follow the day trader rules.
Day Trading Rules
Few approaches to stock trading get as much attention as day trading. There are rules as a day trader you should be aware of before you start trading, just like there are in any other profession or field of work. Here are a few pointers that should be helpful to you when pursuing this line of work.
- Seasoned traders prefer to create a clear, workable strategy in advance and carry it out.
- Day trading requires you to have a substantial amount of money on hand.
- You shouldn’t dip into funds or savings that were meant for emergencies or bills.
- Learn the lingo.
Thinking of Day Trading?
Even though 14.7% of day traders mentioned technical analysis on their resumes, other skills like analytical thinking and customer service are equally useful. You may have what it takes, don’t doubt yourself.
Zippia completed extensive research and analysis and found that:
- While 90.5% of day traders are men, 9.5% are women.
- White men make up 71.6% of day traders.
- Spanish is the most commonly spoken foreign language among day traders, at 36.4%.
“At the end of the day, people have to understand what their risk tolerance is, what their goals are, and make the smartest money moves they can,” says Lauren Simmons.