Earning a living, or even making a fortune, while in your pajamas sounds pretty nice to a lot of people. There are a lot of ways to make money from home, of course, but one that is very intriguing to a lot of people is day trading.
If you’re unfamiliar, day trading is buying and selling stocks. Usually, buying in the morning and selling in the afternoon. Hence, day trading.
Since just about anything can be done online these days, many have traded the corporate finance world for an opportunity to call the shots themselves by using online trading platforms.
Learning to day trade is only one aspect of the process. It also includes understanding how things work and what the risks are before you get started.
Is it as good an idea as it seems? If it is a good idea is it right for you? These are questions we will try to answer in this article.
How it works
Usually investors don’t like volatility, but day traders love it. During the course of the day, if a stock value is fluctuating, that presents an opportunity to buy it low and sell it later for a quick and tidy profit.
That volatility is a double edged sword, however. If it were as easy as just buy low, sell high and profit then everybody would do it. The more you know about how stocks work the better.
An example is how people jumped into the cryptocurrency trading arena without really understanding the concept or process. Though lots of people did well by cashing out to sell Bitcoin for USD before it crashed, many people lost money.
Why it isn’t for everybody
There are many people day trading that were in the trenches for a long time and know what they are doing. Many were traders on stock exchange floors and traded that stress for a more cushy work from home option. You can study how to do day trading, but you will be competing with people who are like sharks and can outmaneuver somebody who is new at it very easily.
Experience beats any kind of learning and it will take time and potentially lots of money lost to be able to figure it out effectively.
What happens to most new day traders is that they become very afraid of any loss. This makes them hold on to winners for too long and take too long to buy a falling stock as they feel it can be bought lower.
How to get started
You should look into taking some online courses on day trading to learn the ins and outs before doing anything. That will not only give you some practical knowledge to get started but can also clue you in if you are cut out for it.
Then open a practice account and see how you do. Many online trading platforms offer trading simulators so you can get a feel before investing any money.