Many investing enthusiasts wonder whether they can turn their hobby into a full-time job. In fact, thousands of people day trade stock shares from home as part-time and full-time workers. It’s important to know two things right off the bat. First, there is a learning curve. Second, the number of hours you work is up to you. Once you get familiar with the process, day trading can be an interesting, rewarding, good paying full-time job you can do from the comfort of your computer chair. Here are some key facts to know if you want to get started off in the correct way.
Understand Account Requirements
There are rules when it comes to day trading, but it’s important to review the account requirements based on where you reside. The minimum account value, taxation, as well as the number of trades over a period of time can differ from country to country. You can consult a tax, legal, or financial professional before you decide to get started.
The Basics are Essential
Before you begin to do day trades of any size or frequency, it is necessary to learn the basics of how to place orders quickly and get out of positions just as fast. That’s because you’ll always want to be in cash at the end of the day. Every position you hold should be closed before the final bell. This type of activity calls for split-second timing in many cases. How to learn the basics? Read everything you can about the subject, and then spend time on a trade-simulator using fake money. Simulators are not perfect, and they won’t teach you everything you need to know. But they are excellent at one thing: they’ll help you learn how to place different kinds of orders accurately and quickly.
Ease into the Job
It’s recommended to keep your day job while learning to day trade. Ease into the full-time commitment over a year or more. Depending which markets you choose to operate in, you might have some time requirements that cut into a standard 9-to-5 job. A great work-around for this challenge is to use the forex markets. Except for weekends, foreign exchange markets are open around the clock, making them and ideal choice for people who want to go full-time.
Conserve Your Capital
Be careful with your finances. Accumulate a small nest egg just for the purpose of your new avocation. It should be money you could afford to lose without changing your lifestyle. Then, after you begin, consider keeping purchases to about two percent (or less) of your total available capital. It’s a conservative approach, but one that will help you get accustomed to the daily give-and-take of the securities markets while preserving your bank roll.
It’s Not Gambling
Day traders are not gamblers. If you have the urge to gamble, chances are that you are not a good fit for taking on day trading as a full-time profession. The job calls for objectivity, a calm attitude, and the ability to make decisions based on facts.