Day Trader Salary

Few jobs are as volatile as that of the day trader. Day trading involves entering and exiting the stock market - all in the matter of a single day. This article will explain what a day trader does and the day trader salary he earns.

Day Trader Jobs

A day trader enters the stock market such as the New York Stock Exchange in the morning, with the intention of leaving it at the end of the day, with a tidy profit - no strings attached. Day traders rarely represent anyone and generally operate on their own. On a given day, when they feel that the market is on the high, a day trader will buy stocks of one or more companies, which he believes will be in green at the end of the day. Thus, as the demand and therefore the price of his stock rises during the day, the trader may sell the stock at some point where he feels his profit will be maximized. It's a pretty simple mechanism - go in, buy, sell, come out.

A day trader generally invests a lot of his own money and reaps his own profits. But while the mechanism of the job looks pretty simple at the outset, there is a lot of effort that goes into it. Firstly, a day trader enters the stock exchange, when he is sure that it is on the way up. He will have to first monitor the financial progress of the company whose stock he plans to buy and then see how it's doing on the stock market. He will then take some of his money and punt on the company, which he feels is on the way up. During the day, the price of the company fluctuates. He will bid for the stock of the company and if the seller accepts his bid, he will be able to purchase the stock. Then he will set a higher selling price. If someone is willing to match the offer, the day trader will sell it. If not, the day trader may choose to hold on to the stock for some time or lower his asking price. All in a day's work. He also needs to exchange day trading tips and day trading strategies that work from fellow day traders.

To be a good trader, you first need to have the basic knowledge as to how the stock market and stock trading works. Secondly, you need to have a good grasp of finance to be able to understand how the company is doing. Thirdly, you need to be able to feel the pulse of the market to know if the other day traders feel that the stock is going to go up or not. And lastly, a good day trader always has his antennae up, looking for clues or hints which will help him invest in the right company.

Day Trader Salary

Now, given the largely speculative nature of the day trader's job, the day trader salary is never fixed like other salaried jobs. A good day trader will always make a profit, because he knows when to and when not to enter the market. A good day trader who knows all the day trading rules never bets, but invests based on a sound, informed guess. The day trader salary also depends based on the economic scenario in the country he works in.

All in all, your salary would be the amount of money you make (off your own money) each month. This will depend on a lot of factors - your available capital, whether you are a home trader or are working for a hedge fund, whether you're starting out or have been in the game for a long time. Just a few from a vast number of things that influence your monetary output.

As a Beginner
If you're a home trader (trading from home, using your own money), you will mostly suffer losses for the first 4-6 months. It is highly unlikely for your income would top $50,000 per year. Day trading is a very tough venture and expecting instant results will be the worst mistake you do.

Intermediate Trader
If you intend to be a serious player, you can work for a hedge fund. Land a job at a good one and you'll have a large capital at your disposal and a great monthly paycheck in your own pocket. It can be anywhere from $200,000 per year when you start off in a good hedge fund. Again, to work at one needs years of experience and a credible run in the market to prove that you have what it takes to earn for them.

Expert Trader
Very, very few people make it to the top bracket of $1,000,000 or more per year. You need at least 5 years of (successful) experience in day trading and would still require lady luck by your side. After all, day trading is a way of gambling. To get here, you need insane amount of capital, determination, smarts and luck all together.

So this was all about the day trader salary and job description. Clearly, day trader jobs have the highest amount of risks attached to them and the money they make can be phenomenally high, but so can the losses. Hence, it is important that day traders need to be careful in their dealings, otherwise the stock market could eat them up!