How Much Does a Full Time Trader / Day Trader Make ? This is often asked by those who want to become a day trader / a full time trader. How much does a trader earn, how much do they get if they trade in one full day, why should they become a trader?
So I will explain how much income a day trader earns in one day. This article was compiled by collecting references from various forums on the internet.
Who can be called a Full Time Trader ?
Full time traders / day traders are those who trade / buy and sell an investment instrument in one day only. Being a full-time trader does not mean you work every day. It simply means that your trading is paying for your lifestyle. This is a very important distinction and one I recommend you ponder if your goal is to trade full time. Trading is about creating a lifestyle, not making it your lifestyle.
Can I make money by becoming a full time trader?
Sure, but …
- You need a lot of capital. My gut feeling is something close to a million. You may need less capital in more risky and leveraged investments. For example options, shorting stocks, warrants and derivatives – but those are super risky and you can lose everything for sure.
- You have to be very good at day trading.
- You still spend a lot of time in front of multiple screens – and one trip to the bathroom can make or break a position.
- You need to be very good at research and getting public and legal information very quickly. (Insider information is great – until one gets caught and spends time in jail.)
- You better be really good at both technical and fundamental analysis. And also very good at reading the charts.
- You can cut losses very quickly and not get emotional – not get stuck in a losing position and let the losses get worse.
- You will also spend a lot of time watching the finance channels around the world. Even if the US market is closed, it is better to keep an eye on the Europe and Asia markets so you know what to do when the US market opens the next trading day.
It’s super hard but some people are good at it. I would suggest if you want to consider doing day trading, start with a mock portfolio and also see if you can “back test” your strategies.
If you can handle all that, congrats! You will probably be very successful as a full time trader. 99.99% of the population won’t be able to do that.
I also get the list below in internet forums.
“ Frankly, you can make a lot of money, but :
- Markets favour those with a market advantage
- Markets favour those who are well-read
- Markets favour those who are well-organised
- Markets favour those who are systematic, who are disciplined
- Markets favour those who are analytical
- Markets favour those with experience
- Markets favour those who manage risk by qualifying it, rather than avoiding it.
- Markets favour those who play to their advantages
- Markets favour those who study all the aspects required for their trade
- Markets favour people who treat trading as a business
- Markets favour those who use trading psychology “
So, How Much Does a Full Time Trader Make In One day ?
Some of the questions that come to me from some people around me and on internet forums. How much does a full time trader in India make in one day or how much does a full time / day trader in the UK make in one day or in 1 month?.
I will answer it. I myself can’t be sure how much money they get in one day because the amount of money they make depends on several factors. It depends on market conditions and trading style. A professional trader makes profit between 40% – 100% pa ( may be more ) in general market conditions, in sideways or flat markets professional traders do not trade. If you have good trading strategies and trading psychology then you can make 3% to 7% every month.
80 – 95 percent of retail day traders lose money. You can check the results from currency trading competitions which publish results at the end of these contests trading either demo account or real account.
It is possible to make money consistently doing high frequency trading or day trading, but the traders who are making money consistently are professionals with the budgets to acquire and develop the best trading tools running on the best trading infrastructure. Obviously those are smart people who are not going to waste their money, which is why they have a higher success rate.
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Average day trader does not make money anywhere in the world. It’s not a pyramid. Only the top 5% make some money. An elite day trader can churn returns of around 3 to 6% per month on an average on the capital. Be very wary of folks who claim to do more. Day trading returns are a bit like “how long can you hold?” thing. Most claim they can go on all night. But you know the reality and what is sustainable in the long run.
To gain knowledge you have to read books. You have to read articles on the internet. You can also watch videos and blogs on the internet. You have to learn from any source possible. You cannot just decide and start investing because investments come with risks. Therefore if you have knowledge you will be able to make correct decisions while trading. You can read articles of famous investors like Rakesh Jhunjhunwala, Warren Buffet, etc. You can refer to websites like investopedia and also Sharekhan Free Articles.
Experience matters. If you have experience in these investments then you will be able to choose the correct stock. It’s okay if you make mistakes at first . Learn from the mistakes you make. Search for reasons why you lost in that stock ? How much is the loss and also about it’s past. At first start investing in small stocks then once you gain confidence you can invest in large stocks.
Never bring emotions in between. Do not trust anyone, do not be greedy. You can ask for expert advice from fund managers but do keep in mind that they can make a mistake sometimes so you can trust them but do not completely rely on them.
You can research market conditions and invest. Keep in mind that if a certain stock is doing good in the market that does not mean that it will do good the next time also. The market is volatile so you never know what will happen.
Never follow the herd mentality. If everyone is investing in a particular stock it does not mean that the stock will do good. The price may fall even if the stock is popular. Invest only where you feel to invest.