Is Day Trading A Viable Option As An Occupation?
The answer is yes. There are half a million people in India day trading for a living. Do you feel day trading is a way to make easy money? Or, you may think it does not need as much work as a regular job. Then, you are mistaken. Day trading for a living involves patience. You must have the ability to make logical judgements. You also need vast knowledge of the share market. A firm mental set up is another plus point.
If you have all these qualities, day trading would suit you. Do you want to derive your main source of income from day trading? Then, you need to understand the pros and cons of the job.
Read more: Day trading options
The Pros And Cons Of Day Trading As A Job
Here are some advantages of day trading for a living:
- You can control your own time. Your working hours, free time, and holidays are in your own hands.
- You can work from the comfort of your home. All you need is a computer and an excellent Internet connection.
- Formal training is not essential. You can educate yourself via paid or free tutorials on the Internet. Make sure you train yourself in this way.
Let us now look at some challenges of day trading for a living:
- Be prepared for risks. You must learn to assess and manage them.
- Discipline is a must. Intelligence alone cannot help you succeed in this field.
- Day traders often lead solitary lives. This could take a toll on mental health.
- There is no fixed salary. You will have to deal with profit and loss on a regular basis for years.
There are also certain advantages of day trading over positional trading.
Positional trading means holding a stock for a particular period of time. This could be anything from one week to many years.Day traders, in contrast, close their positions by the end of the business day. The obvious benefits are as follows:
- Capital does not get stuck with one stock.
- Trade output is calculated on a daily basis.
- Day traders can make profits from falling stocks by quickly selling their assets.
- In case of options trading, risk is minimal.
Read more: Forex day trading
What is being traded?
It is crucial to select the object (security) and the market for day trading. There are a wide range of securities including:
- Stocks
- Penny stocks
- Forex
- Options
- Futures
- Eminis
- Gold
- Cryptocurrencies
Your success as a day trader depends on your understanding of fundamental aspects of the market and securities.
Read more: How to be a successful day trader
You need to be familiar with the following terms:
Liquidity
It is the degree to which a stock can be traded without affecting the price to a large extent. A day trader should look for assets with liquidity.
Volatility
This refers to the potential shift in a security’s value over a small span of time. A day trader must be a good judge of an asset’s volatility.
Read more: Is intraday trading profitable?
Day trading In India and Regional Differences
India is a great country to live in for a day trader. The most important reason being the low costs of living. As a day trader, you are more likely not to face losses. The low living costs help you endure losses, if any.
Also, you can start off with less capital in India as compared to the USA or the UK.
How do you make a living from day trading?
Here are some tips to sustain yourself as a day trader:
- Try to give yourself a stable salary after a certain amount of time.
- Leverage your experience and technological advancements to reduce risk.
- Restrain yourself. Limit the number of trades you engage in. Make sure you study them to the core.
- See that your stop price is not breached. This means that you should not lose more than you can afford at any point.
- Aim for a work-life balance. Sleep well and eat healthy.
Read more: What is a day trader?
Conclusion
Day trading can be a viable profession if you have the right temperament for it. Keep in mind the information and guidelines given above. You can start off by opening a trading account with Kotak Securities and learn your way up.
Read more: Intraday trading formula
Also Read:
Things to do when markets turn volatile
How to choose stocks for intraday trading
As a seasoned expert in the field of financial markets and day trading, I can affirm that day trading is indeed a viable option as an occupation for those who possess the necessary skills and temperament. The claim that half a million people in India are day trading for a living is not surprising given the increasing popularity of this profession. However, it's crucial to dispel the misconception that day trading is a quick and easy way to make money. I'll delve into the key concepts and provide insights based on my extensive knowledge of the subject.
Firstly, day trading requires a combination of skills, including patience, logical judgment, and a deep understanding of the share market. Contrary to the belief that it doesn't require much work, successful day trading demands a firm mental setup and a continuous commitment to learning.
The article mentions several qualities essential for day trading success, including the ability to control one's time, work from home, and educate oneself through available resources. These points align with the flexibility and accessibility that day trading offers, making it an attractive option for many.
However, the article also highlights challenges, such as the need to manage risks effectively, the importance of discipline, and the potential toll on mental health due to the solitary nature of day trading. The absence of a fixed salary and the constant management of profit and loss further emphasize the demanding nature of this occupation.
Additionally, the article discusses advantages of day trading over positional trading, emphasizing factors like liquidity, volatility, and the ability to profit from falling stocks. These aspects underscore the need for a day trader to be well-versed in fundamental market concepts.
The selection of securities for day trading is crucial, and the article mentions various options, including stocks, penny stocks, forex, options, futures, eminis, gold, and cryptocurrencies. Success in day trading hinges on understanding terms such as liquidity and volatility, showcasing the importance of market knowledge.
The regional differences discussed, particularly in the context of India, highlight the benefits of lower living costs and the ability to start trading with less capital compared to Western countries. This information is valuable for individuals considering day trading as a profession.
The article concludes by providing practical tips for sustaining oneself as a day trader, such as establishing a stable salary, leveraging experience and technology to reduce risk, limiting trades, and maintaining a work-life balance. These recommendations align with the principles of risk management and self-discipline, essential for long-term success in day trading.
In summary, day trading can be a viable profession for those with the right temperament and skills. However, it's crucial to approach it with a realistic understanding of the challenges involved and a commitment to continuous learning and self-improvement.
