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 financial expert with a deep understanding of day trading, I can affirm that the article provides valuable insights into the world of day trading as an occupation. My expertise in finance and trading allows me to substantiate the information presented with a comprehensive grasp of the concepts involved.
Day trading, as depicted in the article, is indeed a viable option for making a living, especially evidenced by the half a million individuals in India engaged in this profession. However, the article rightly emphasizes that day trading is not a shortcut to easy money. Success in this field demands a combination of traits, including patience, logical judgment, extensive knowledge of the share market, and a resilient mental mindset.
The advantages and challenges outlined in the article align with the realities of day trading. The flexibility to control one's time and work from home, as mentioned, are attractive aspects. Nevertheless, day traders must be prepared to navigate risks, exhibit discipline, and contend with the absence of a fixed salary.
The distinction between day trading and positional trading is elucidated well. The benefits of day trading, such as avoiding capital lock-ins and calculating trade output daily, are presented accurately. Additionally, the mention of trading options and the associated minimal risks adds a layer of sophistication to the discussion.
The inclusion of various securities like stocks, penny stocks, forex, options, futures, eminis, gold, and cryptocurrencies is crucial. The success of a day trader hinges on a profound understanding of liquidity and volatility, as rightly emphasized in the article. Liquidity and volatility are pivotal factors that impact a day trader's decision-making process.
The regional perspective on day trading in India, highlighting the low costs of living and the ease of starting with less capital, is a valuable addition. The tips provided for sustaining oneself as a day trader, including maintaining a stable salary, leveraging technology, and prioritizing work-life balance, demonstrate a nuanced understanding of the profession.
In conclusion, the article effectively captures the essence of day trading, offering both aspiring and experienced traders valuable insights and practical tips. The recommendation to start with a trading account with Kotak Securities provides a practical step for those looking to enter the field. Overall, the article provides a comprehensive overview of the pros and cons, intricacies, and strategies involved in day trading as a profession.
