Day traders typically make a full-time career by making strategic trades through the stock market every day. At first glance, this career seems like one filled with freedom. You’ll be self-employed and making your own independent choices about how to approach the job. However, a day in the life of a day trader is still quite busy and must be structured around the stock market. Gain some additional insight into this approach to trading with the information below.
What Is a Day Trader?
A day trader is an individual who buys and sells a security within a single trading day. Day traders typically aim to end the day with no open positions. As a day trader, you’ll work for yourself, which means you don’t have to worry about answering to a boss or reporting to an office. However, day traders are still subject to the scheduling of the stock market.
What Is a Day Trader’s Schedule Like?
A day trader’s schedule revolves around the hours of the daily stock market. Pre-market trading begins around 8:30 a.m., and the New York Stock Exchange opens promptly at 9:30 a.m. Eastern time. If you’re in a different time zone or working with a different stock exchange, you’ll need to adjust your hours accordingly to suit those of the applicable market.
The middle of the day will often slow down for a day trader, providing time for strategic planning and market research. The last hour of the trading day is usually busy again, with final trades picking up between 2 and 4 p.m. By the end of the day, many traders using this approach will be finished with their work and ready to close up before beginning again in the morning.
What Are the Challenges of Day Trading?
Day trading can be profitable, but it’s also volatile. Traders may likely face many days when their trading activity ends on a loss. You can still be successful as a day trader — even after having these experiences — as long as your profits outweigh your losses. Even four days of minimal losses are all right if you recap everything you lost and turn a profit with the fifth day of trading. This industry is about balance.
One of the greatest challenges of day trading is understanding the balance and having the commitment and wherewithal to stick with these trades for the long term.
What Strategies Can Day Traders Use?
You can take many different approaches to day trading. The key is finding a strategy that works for your goals. Those who use a scalping strategy take a fast-paced approach by buying and selling for small profits which add up in large quantities. Breakout traders purchase stocks when they peak above the spot where the top resistance price formerly occupied. Momentum traders act sooner on stocks that are moving upward by purchasing stocks when they see upward movement of 30 or 40 percent.
The schedule of a day trader can offer a rewarding experience for those who don’t mind working with the flow of the stock market in this self-employed career option.