How to Day Trade for a Living - Create Monthly Income from Day Trading

By Rae Teo

Are you looking to generate passive income?

 

Do you work a 9-5 already, but want a little extra on the side? Are you looking for a way to invest your money without having to spend years learning about financial markets?

Are you looking for a way to get into the stock market without having to buy and sel

• Language: English
• Publisher: PG Publishing LLC
• Release date: Dec 17, 2020
• ISBN: 9781087936345

Book preview

What Is Day Trading?

Day trading involves the buying and selling of different financial instruments in the same day with the motive of generating some profit. Earlier, day trading was available only to the professional financial institutions. The exchanges and all the market data for the stocks, currencies, options, and futures were accessible only by them. But nowadays, due to the improvement of technology and the internet, these markets are available to everyone allowing them to day-trade at a very cost-effective price.

How Does Day Trading Work?

Day trading styles vary from person to person. The style depends greatly on the personalities of the day traders. It ranges from short time trading styles like scalping (in this, the positions are held only for a few seconds or a few minutes) to long term trading styles like position and swing trading, where the position may even be held for the entire trading day. Most day trading systems are very flexible. Depending on whether the trade is in a profitable state or not, it may have open positions starting from a very few minutes to even a few hours. The prime categories of day trading markets are stock markets, currencies, options, and futures. There are market groups, among these types, based on commodities, currency exchange rates, and stock indexes. With the help of direct access brokers (as the name suggests, direct access brokers provide direct access to the exchange), day traders can access all the exchanges.

Advantages of Day Trading

If you can day trade successfully, then there will be plenty of rewards. Although day trading requires time management skills and discipline, it also allows you to have your own time without worrying about pleasing a boss or a manager. Day trading will enable you to make money from the comfort of your own home and provides you with too many advantages that you can't get in other financial instruments and traditional stock trading forms. Let us discuss some of the critical benefits of day trading.

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Free Resources and Information – Just like any other field, day trading also requires plenty of studying before you start to trade. You don't necessarily need to have expertise in making investments because there are plenty of available resources on the internet for free. You can also get some in your local libraries. You just need to take time and learn it before you start trading. If you want, you can even purchase day trading software, which will provide you with instant stock information, charts, and news, but you don't even need to do that if you are a beginner. Various websites offer you to learn and practice day trading on a sample software either for free or at a meager price.

You Can be Your Boss – Can you imagine making money from the comfort of your home without a boss or a manager keeping an eye on you? It is possible if you can successfully day trade. In this, you do not need anyone's permission, nor do you need to fulfill anybody's demands. You are totally in charge of yourself, and the entire thing depends on your performance and sincerity. You can lose a considerable amount of money if you fail. Just because you have the freedom, you should not be reluctant about it. Your self-discipline, work ethic, and sound knowledge about this field will determine your fate in day trading.

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No Risks Overnight – In other traditional trading forms, your profits can reduce due to long-term trading, but there is no such risk in day trading. A day trader can close his position at the end of the trading day or even before the end of the trading day. So, in day trading, you can secure your positions before the trading day ends and go to sleep peacefully without having to worry about anything. Nothing can affect your earnings for that day.

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You can Succeed in Bad Market Conditions – In a struggling market situation, a day trader can take advantage of the falling stock prices by using short-selling trading strategies. The fact that a day trader can earn in the struggling market is a huge advantage.

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Focus on the Technical Analysis – Most investors and traders look to two types of analysis for financial information: fundamental analysis and technical analysis. Long term traditional traders focus on the company's fundamentals: management information, financial statements, and company health for seeing the change in the company's stock values in the long run. Day traders can focus on the technical analysis for the entire day for making quick and successful transactions, thus generating profits. A day trader's main concerns are the things that are going on at the present moment.

Disadvantages of Day Trading

Let us discuss some of the disadvantages of day trading.

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Split-Second Timing – Day trading requires people who are fast at making decisions. The tables can turn within just a few split-seconds. You need to be able to quickly analyze the market and make decisions with confidence and speed. You must also promptly manage your reward and risk, maintain discipline, and manage your trade. If you fail to do this, which most people do, you will not generate profits through day trading.

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It is Emotional – It can be much more emotional than other forms of trading. When you see the fluctuations in your profit and loss statements in such a short period, it can be really stressful and overly emotional for you.

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It may be Boring – When the market moves fast, day traders face the challenge of dealing with the emotions of greed and fear and making quick decisions. Most of the time, the day traders do nothing but sit and watch the market for hours and yet not seeing it do anything meaningful.

Day Trading Vs. Swing Trading

Day Trading

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Smaller and multiple losses and gains

It depends on the state-of-the-art trading tools and platforms

Utilizes short-term buying and selling signals

It is a full-time job

Your positions may last from a few hours to a few days

You can make multiple trades in a single day

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Swing Trading

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Bigger and fewer substantial losses or gains

You can accomplish it using a standard brokerage account

Uses momentum indicators and trends

It can be done part-time

Your positions may last from a few days to a few weeks

You can make numerous trades per week

Traits You Need to Have As a Day Trader

For being a successful day trader, you need to have certain traits. It is not as easy as applying a strategy and making tons of money. These trades are necessary to succeed in day trading. If you don't possess these traits, you should not day trade.

The traits are:

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Discipline – The key trait that a day trader must possess is discipline. You get numerous opportunities and thousands of products to trade in every second of the day, but only some of them provide some great profits. You have probabilities of messing your trades with each passing second. One wrong move and you will end up losing a lot of money. Even if your actual trading time is very little, you need to stay disciplined and sit there waiting for your trade signals. Since you have no manager and boss, if you think you can be careless, then you are wrong. Everything requires discipline, and in this case, it is needed even more. If you see no potential opportunities at that time, you should not relax and be absent-minded. You should be disciplined and stay alert for identifying possible future opportunities. On seeing potential trade opportunities, the day traders must act in a fast and disciplined way.

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Patience – Patience is directly related to discipline. Day trading requires several hours of waiting. When you see no opportunities and leave the trade, you will be making a huge mistake. You never know when the potential opportunity may arise. Patience and discipline go hand in hand. You need to stay patient even when you see no possible opportunity. Whenever you see an opportunity, you need to act in a disciplined way without any hesitation. Based on the day trader's strategy, they need to wait for their ideal points of entry and exit patiently.

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Adaptability – The most important thing you need to understand about trading is that none of the days are alike. Each day is different. For someone with just some bookish knowledge, this constant difference can be problematic. When they attempt to apply their academic learning, they see that the real scenario is very

Reviews for How to Day Trade for a Living - Create Monthly Income from Day Trading

[jay · Rating: 1 out of 5 stars]

Worst book of all time, why does no one want to talk about actual day trading strategies. This is not a how to it’s a dictionary for trading terms.