The ability to work from home, set your own hours and use your money to generate further income are all big drivers for people to learn how to become a day (active) trader on the stock market. Whatever your motivation, you can learn trading from the comfort of your own home at your own pace, which means that it can start out as a side hustle that you can turn into something more substantial as you get the hang of the different systems. However, it will be essential to take part in at least a beginners online stock course so you know what you’re getting yourself in for and can plan your way to success.
Day trading sounds like the ultimate dream job; work from home or wherever there’s an internet connection, and maybe even get your computer to do most of the work for you. It can feel surprising to newcomers that there aren’t more success stories of amateur day traders making big money, but with the right preparation, it’s possible for you to become one of those stories. While each day trading coaching website has its own recommendations, the following steps to success are common across all scenarios:
With the advent of high-speed internet across most the developed world, at home trading has begun to take off as people begin to experiment with day trading as a way to generate extra income. However, with this increase in individual investors, there have been regulations related to US Markets, that exist to reduce the risk of undercapitalized individuals from damaging themselves financially. One of these rules is the pattern day trader (PDT) rule. This requires anyone who makes more than three fully executed day trades inside a rolling five-day period to maintain a $25,000 account equity (this can be a combination of cash and shares). Your broker should notify you if you have been classified as a PDT, and you can remove the restrictions on the number of trades you can make by increasing your equity to over the $25,000 threshold. While this rule can seem frustrating at the start, the industry brought it in to protect smaller investors, so you need to decide whether to avoid the designation by making fewer trades or increasing your equity to trade freely each day.
For some people, the risks involved in becoming an independent trader outweigh the benefits, but they still have the desire to use their knowledge and skills in the stock market. This is where becoming a proprietary (“prop”) trader is an interesting avenue to explore. Instead of being an independent trader, prop traders work for a larger brokerage firm and take a percentage of the profits that they generate through their trades. This means that you use money that doesn’t belong to you, which lowers the personal risk, but you won’t see 100% of your trading profits like you would when using only your own capital. However, for the beginner trader, prop day trading has the biggest benefit of a ready-made source of expertise, strategy and networking with professional traders, so it could be a place to start your day trading adventure and then go independent when you show that you be consistently profitable.
Learning how to become a day trader is an ongoing process, and the stock market is a constantly changing with the impact of technological improvements, various types of players, global dynamics and investor sentiment. Taking regular online courses to expand your strategy repertoire will help you succeed and utilizing a massive database like StockOdds to spot trends, patterns, get actionable insights for your strategies, will increase your edge substantially. With the right preparation, solid financial backing and a sense of adventure, it’s time to start your day trading entrepreneurial enterprise today.