Day trading for a living is a very attractive lifestyle. You get to work from home, run your own business and run your own life. In most cases, it looks like sitting in a home office for only 6-7 hours a day, with multiple computer screens up, working away on your day trading software.
Day trading has always been a bit of a mystery. That is because most successful day traders work behind the curtain from a black box of stock market day trading strategies and systems. Here is a quick glimpse into the life of a day trader.
The Day in the Life of a Day Trader
Stock market day traders wake up in the morning before the market opens. They flip on the lights in their home office, turn on their multi-monitored computer, login to their day trading software and start planning for the day.
Depending on what day trading strategies they use, they may go to financial new websites, logon to the Securities and Exchange Commission’s EDGAR system, or simply open up the day’s Financial Times. In any case, they build a list of potential stocks to buy and put them on a watch-list.
Around 9:30am EST, they sit in their chair and get ready for the trading day. For most day traders, there are no lunch breaks, because as Gordon Gekko famously said in the 1987 film Wall Street, “lunch is for wimps”. There are no coffee breaks, no bathroom breaks, no nothing.
Well, some might take breaks but many are so intensely focused that they don’t even notice the time going by. You see, successful day trading requires an enormous amount of concentration and focus. Before they realize it, it’s 4:00pm EST and the trading day is over. They may have a few trading positions still open, but most of them are closed out. Now comes the time to evaluate the day’s trades.
It may have been a winning day or a losing day. Both happen when you are day trading for a living. Ultimately, you have to have more winning days than losing days. And you have to win more money than lose it.
Psychology of a Day Trader
Successful day trading requires a certain emotional and psychological makeup. First of all, you have to have an emotional detachment to the entire process. In essence, you have to be a shark.
You can’t see your money as representing ‘things’ that you want. In other words, you can’t see money as a real thing. If you do, you will be too fearful to trade with an objective mind.
The main reason is because you will certainly lose money if you are day trading for a living. But if you have an emotional attachment to it, your emotions will get in the way and you will not succeed.
Those who succeed take their money seriously, but they look at it more like points in a video game rather than purchasing power or their next meal. If they lose it, they’re bummed, but it doesn’t translate into the Porsche 911 that they just lost on that trade.
If you want to be successful at day trading for a living, you must have enough trading capital to do it properly. Some say you need $50,000. That’s on the low end. Some say you need $100,000 minimum.
This is different than just investing in stocks. For investing, you can start with any amount because you’re just letting it sit and grow over a long period of time. With trading, you’re looking for short term positions and to go in and out.
There are many ways that different day traders have been able to get that capital. Some have very high paying jobs and they save. Others start trading with whatever they have and build it up to $100K in trading capital. But those who do the latter keep their day jobs for the time being or work nights.
If you don’t have enough capital, you won’t succeed. In addition, if you don’t have enough to live on while you day trade, you will have too much of an emotional attachment to your money that will affect your trading.