Day Trading: Guide, Leverage, Options, FOREX, & Earnings


There are several ways to trade stocks and other securities. Some people are long-term value investors, while others are looking for quick deals and trades.

In day trading, the focus is on the latter. Day trading involves securities trading with a very short time horizon.

As the name reveals, a day trader usually tries to start and end his trade within one and the same trading day, before the stock exchange closes.

So, how do you make money day trading?

You make money day trading on the short-term movements in financial instruments such as stocks, commodities, indexes or currencies. Usually every profit is small, it takes a lot of business to make a good result in the end.

It is important to have a good strategy and plan for what and how you should trade.

You must follow that plan in a disciplined manner. You need to decide which type of products you want to trade with and with which broker.

To be able to make money on trading, you need to have a capital to trade with.

Here’s a video to help you better understand how to make money day trading:

How much can you earn day trading?

It is important to have respect for the fact that trading is difficult.

There are undeniably those who make money from trading, maybe even a lot of money and are happy to show it on social media.

As a new trader, one of your first goals should not be to lose money. If you take a position, it can end in five different ways.

It can be a big loss, small loss, break even, small profit or big profit.

Can you through risk management ensure that you never make a big loss is much gained.

Risk control

In your trading plan, you must carefully describe how to handle risk and how to minimize losses. One way is to always run stop loss in every trade.

Never risking more than 1 or 2% of your trading capital on each individual trade can be a good benchmark.

Keep your feet on the ground

Instead of dreaming of unrealistic big gains, your goal should be to be profitable in the long run with minimal risk.

The day you are profitable, you can set new goals. You want a higher percentage profit and you want fewer loss-making deals.

It’s easy to get too eager if you’ve had several lucrative deals in a row.

You must continue to be disciplined and adhere to your rules in your trading plan.

You want a profitability curve that is steadily going in the right direction. It is more important that development is stable than that it goes fast.

Try to avoid periods of large and many losses. It will take a long time to catch up.

This is how you get started day trading today

It’s easy to start trading. There are plenty of brokers to choose from and it is easy to become a customer with them.

It only takes a small amount of capital to start. But be careful which broker you choose. Choose a well-known or who gets good reviews from others who trade.

Before you start your trading career, you need to have a plan for what and how you want to trade.

There is a lot of information on various blogs and youtube. Read, learn and create a plan that works according to your conditions.

1. Open an account with an online broker

To start trading, you must open an account with an online broker.

There are many online brokers who are more focused on trading than saving and investing.

Trading is a global phenomenon, you can become a customer of the player that suits you best. It is important to choose a reputable broker.

Choose one that has received good reviews and is well known. One such is Webull. They offer a wide range of products for short-term trading. They also have a social platform where you can learn from other traders.

2. Transfer money

To get started with your trading, you need to transfer money to your online broker. When you have come this far, you should also have a plan for what and how to trade.

Of course, it takes time to learn to trade. Many aspects of trading cannot be practiced until you experience them in real life.

Learn from your mistakes and update your trading plan.

3. Test yourself carefully with smaller transactions

At many brokers you can trade with small sums. It’s a great way to learn trading.

Be disciplined and follow your trading plan. If there is no opportunity to buy or sell, you must learn to wait until there is one according to your strategy.

4. Learn everything afterwards and read a lot of books and online guides

There is a huge amount of information and guides on the internet about trading.

A tip is to find a strategy and become really good at it. Then you can build on with more strategies to act on.

There is no strategy that gives 100% profit, maybe not even the number of winning trades is more than your losing trades.

The important thing is that you make a total profit on your trading.

5. Shift up your volume after him as you develop your skills

When you notice that you have a strategy that works and that you have the discipline to follow it, it’s time to shift up. Maybe you transfer more money to your trading account or let each position get bigger.

Keep a journal of your trades and learn from both your mistakes and what you have done well.

Can anyone become a day trader?

Anyone can become a day trader. There is no requirement that you must have a certain license or a certain education. Anyone can open accounts with a stock or CFD broker and start trading.

However, this does not mean that everyone is suitable to become day traders or that it is an easy way to make money.

To become a successful day trader, one must try to learn everything one can learn about the market, trading and various analysis methods.

You must also be willing to dedicate a lot of time each week to analyzing the market and trading on the information you get.

You do not have to be a genius to be successful.

You do not have to be good at math either. But you have to be willing to put in the effort if you want to succeed.

Becoming a day trader is not an easy way to make money but most people can succeed if they are sufficiently motivated and disciplined.

I recommend that you take a look at this video I found on Youtube. You will get an idea of what it takes to become a day trader and what you can expect:

How much money do you need to day trade?

If you are willing to take big risks, as little as $5000 may be enough to become a day trader. However, I recommend that you try to save at least $50.000 before trying to become a day trader. This allows you to make money without having to take equal risks.

How much money you need to become a day trader is a very difficult question to answer. It largely depends on how much money you have to earn to be able to live on your trade and how much you want to earn.

Someone who is single and lives in a cheap apartment needs much less money to be able to start day trading than someone who has a family to support and a mortgage to repay on.

I recommend that you try to figure out how much money you need to make each month (on average) and then try to figure out how much money you need to be able to achieve it.

How much money you need to start day trading also depends on how much risk you are willing to take.

If you are willing to trade with CFD certificates with high leverage, you can make a lot of money quickly without having to have a lot of money to invest.

In this case, however, you also risk losing all your money quickly. Only you can decide how big risks you are willing to take to try to become a day trader.

Can you live on day trading?

Yes. It is possible to live on day trading. It is not easy but there are many who do it and there are day traders who earn many millions every year.

For every successful day trader, however, there are several who failed and never managed to make money on day trading.

If you want to become a day trader, it is very important that you do not think it is easy but that you are willing to do what it takes to be successful.

Many brokers offer demo accounts where you can trade for virtual money. Use these to try day trading before you start trading for real money.

This lets you see if there is anything you need to learn more about and if there is anything in your trading strategy that you need to change in order to make money.

Do not start trading for real money until you can successfully trade on the demo account.

Financial instruments with leverage?

Most day traders use different types of financial instruments with leverage to be able to make money on small price movements without having to invest large sums of money.

Below I will give some examples of products with leverage.

1. Options

Ordinary options are not directly a product with leverage, but they can still be very volatile and small changes in the value of a share can have a major effect on the value of an option.

This is especially true if the option matures soon. Options can provide very high returns.

2. CFD

CFD certificates make it possible to make money on price movements without having to own a certain asset. Most CFDs have leverage.

It is e.g. common that one can trade with 1:30 leverage on the stock market. CFD certificates allow a day trader to make a lot of money on small price movements.

This is especially true when it comes to certificates with high leverage. Trading can be very risky.

3. Binary options

Binary options are used by some day traders to monetize an asset’s volatility.

A binary option always gives the same return regardless of how much the value of the asset has changed and can therefore make it possible to get an extremely good return on small price movements.

However, in most cases we advise against trading binary options.

4. FOREX certificate

There are many types of different FOREX Certificates.

Some types are very similar to CFDs while others are more like options.

Common to most of these is that they allow a day trader to take positions with leverage in the foreign exchange market.

Conclusion

Day trading is stressful for the psyche

There are many reasons why day trading is stressful for the psyche. Daytradar you, it’s probably your main income. You then have a pressure on you to generate a profit every day.

Every trade you take is associated with risk.

To be profitable, your trades must go as you intended. It can be easy to be too eager and chance, Not sticking to your trading plan punishes yourself in the long run.

But being disciplined is not as easy as it sounds.

Alone

Being a day trader is a lonely job.

It is not the free glamorous life that many think of you. You have to be in front of your computer screens all the time, missing a location can be expensive.

A good alternative to day trading is swing trading. It is based on you holding your positions longer, maybe days or weeks.

It is also an employment that can be combined with other activities or jobs.

Even when it comes to swing trading, it can be psychologically stressful. But if you find a strategy that suits you and that does not require you to spend too much time in front of the screens, swing trading can even be mentally healthy.

To develop as a trader is also to develop as a human being.

Be realistic

I am not saying this just to be a downer and crush your dreams of becoming a successful day trader. I am saying this to give you a no bs guide on what you can expect.

I think it’s great that you want to try a new way of making money and you can always just try the virtual way of day trading as I mentioned before. This way you don’t have to worry about losing your capital.

So, have a nice day and good luck!

Kevin

Hi, my name is Kevin and I am a weightlifter, now part time blogger. Keep in mind that I dont have any fancy degrees or operate some high-end business company. I am just a dude from Sweden who loves to learn new things, especially new things on how I can inqrease my wealth. And now I have the opportunity to share that knowledge back to you.

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