How to Make Money Day Trading Online
Online day trading is a relatively new way to make money. Of course, it was, you needed the internet to come along in order for it to even be a thing. But since the late 90’s, when the internet became widely accessible, it has been a way for the average man or woman to make money sitting in front of their own computer, at their own home.
This is likely the reason it has become so popular in recent years. Even with new laws cropping up seemingly every year restricting day traders and their ability to make profits, online day trading is an endeavor that many take up.
If you too want to take up day trading there are a few things that you need to take into consideration, the first of which is; this is not a get rich quick solution. If you think that you are going to sit at home and make a six-figure income right off the bat, then you are in the wrong line of work, and if you approach day trading in with that attitude you will lose. BIG.
That said someone with a level head, the proper discipline and the will to do the work it takes to make money this way can make a good living for themselves with online day trading.
What you will need
As with any new job (especially when it deals with tech) you will need to have a few basics first, they are as follows:
Computer: If you are day trading you should be spending several hours in front of your computer, every minute counts. If possible get two monitors. This is so you can watch what is going on in real time. While still placing trades, looking at charts, and a multitude of other tasks you will find yourself doing. You should expect to be multitasking a lot while day trading
High-speed internet: You have to have an extremely reliable internet connection with to notch speeds. Please do not skimp here, if you are trying to keep your bill as low as possible you will struggle in this line of work. Speed matters here, you don’t just want the information coming in quickly, you need it coming in fast.
- Also, if possible get a backup hotspot in case your main internet line goes down.
- Trading software: It is a necessity that you have a brokerage account that will allow you to stream charts. Day traders need to see up to the minute analytics; streaming is absolutely required for you
- Discipline: Again, you need to be at your computer the entire time the stock exchange is open. Any day that you aren’t paying attention is a day that you lose potential profit. Not only do you need the discipline to be able to hold yourself accountable for showing up to work, but you also need to have enough discipline not to act compulsively. This will get you into serious financial trouble.
- Capital: To get into day trading you can make money without money. Many day traders take out a loan so they can have enough capital to make money while trading. This is certainly a risk, but if you do what you are supposed to be doing, you will make this money back and much more.
What is the best day trading strategy?
When you are day trading your goal should be to make money every day, but we’re not talking pennies here, you want to make enough money so that you walk away feeling like you didn’t waste your time. To do this, you will need to trade in high volume.
Trading in high volume is necessary because you are looking to capitalize on small movements in the market. When doing this it becomes necessary to trade hundreds of stocks, and here is why.
As a day trader you are typically dealing with minimal increases (let’s say 50 cents) if you only move 50 shares at a fifty-cent profit then you have only made 25 dollars. Here is the catch, there are fees for buying into a stock and fees for exiting the trade. The fees may vary, but out of that 25 dollars, it is likely that you are paying at least that much in fees.
So, the most important strategy for a day trader is to find small movements in stocks and trade them at high volumes in order to maximize your profits
What are the pitfalls that day traders should watch for?
The single biggest pitfalls that day traders fall into is not being measured in their decisions and the choices that they make. This is a huge mistake for day traders (or really anybody who trades stocks). You won’t be earning every day, that just is not how stock markets work. In fact, you may go several days in a row without making any money. Or worse you may go a few days in a row losing money.
When these times happen, and they will happen, you cannot go on tilt and begin looking to make all of your money back in one transaction. People who do this end up losing everything they have.
Another pit fall that many people fall into is becoming too dependent on making a set amount of money every day. Day trading is not a secure job where you know what your income is going to be for the month. It will fluctuate, and you need to be prepared when the rough times come.
Wrap – Up
Day trading can be a gratifying experience, and you can make a good living doing it. But it can, and at times it will be extremely frustrating and very taxing. The danger of day trading becoming more like gambling than a business venture is very real for those who lack the discipline to stick to their plan.
Remember, this is not a get rich quick program. It takes practice, skill, and dedication. If you can commit to those, then day trading will treat you well.