Average Day Trader Income
Day trading is a profession wherein traders trade securities on an intraday level. All the positions are closed at the end of a trading day.
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Day trading is quite a challenging profession that requires an immense amount of dedication, hard work, and passion. It seems like an easy way to make big money as beginners. Reality, however, is the opposite. Some research found that a mere 5% of day traders become successful and profitable at this profession.
Types of Day Traders
Day traders can be categorized into two types:
- Work from home Day Traders: The work from home day traders do not work for a firm or an investment company. They trade for themselves and by themselves, from anywhere they want, any time they want.
- Stock Traders: On the other hand, stock traders are the traders who work in investment banks or investment firms. They have fixed working hours and work off the capital of their company.
Day traders who work from home enjoy the flexibility and independence. They can choose which securities to pursue, day in and day out, and when to trade them. They also get to keep the entire profit earned by them, while the same is true for losses.
Thus, an individual day trader must have access to all the technical tools, know-how, and capital required. He should also be able to access news, research, and analysis.
The average day traders’ income depends on several factors like how much time they spend trading, the initial capital, the markets traded, the instruments traded, and the individual personality.
According to some statistics, the US national average trader makes about $89,000 a year.
Stock Trader Salary
Stock traders are professional day traders who work for large institutions and investment firms. They get access to all the required tools and training for the job and trade using the company’s capital with no personal risk, except for getting fired. This is the most significant advantage of being a professional day trader; however, the obvious drawback is the profit split. They work for someone else and give a significant part of their hard-earned income to the company.
As the risks reduce, so do the rewards. Professional stock traders trade use the company’s tools, platforms, and capital. In return, they give the lion’s share of the profit to the firm, retaining only a pre-defined percentage. Therefore, the salary of a professional stock trader is less than the average salary of an individual day trader.
Day Trader vs. Stock Trader
Both professional stock trading and individual day trading have their pros and cons. As discussed, a professional stock trader does not need to invest his own capital in setting up the technical tools and platforms, and gets direct access to all the news, research, and analysis from his company. He does not place his own capital, too. However, in return for the received privileges, he is bound to share a large portion of his profit with the company.
On the other hand, an individual day trader must set up a trading desk of his own. He needs to open a trading account with a broker, in cash or on margin and assume full risk of the investment. The bright side is that he gets to keep all his profits to himself. If the individual day trader is backed by extensive education, knowledge, and skills, he can make an excellent living day trading. The most significant advantage is that he does all of this from the comfort of his home or home office, at any time he wants, in any security and market he wants, on his terms and conditions.
Want To Become A Day Trader!
It has been established that it is indeed possible to make a living day trading. On top of that, being an individual day trader has its own perks and benefits. Thus, both the beginners and the professional stock traders can dive into the world of individual day trading, provided they are supported by excellent education, skills, and experience.
Tradenet offers support to the neophytes as well as to the professionals. The beginner can start with the education packages of Tradenet. The Intro package contains all that is needed to get started- a self-study course with tens of learning units, training videos, and sessions and tests, along with access to Tradenet’s live trading chat room to learn from the live trades of top analysts like Meir Barak.
Traders who have some experience in trading can apply for Tradenet’s 5-day demo challenge. The demo account comes with a trading balance of $10,000, and the trader is required to reach net profit of $500 at the end of the challenge while following specific rules. The traders who win the demo challenge gain access to a $14,000 live funded account, in accordance with the challenge’s conditions.
In short, Tradenet helps traders become successful in their journey towards professional trading and financial independence by offering them the required tools and support, along with making them eligible to apply for a funded trading account.