If you've ever wondered what it's like to be a day trader, then you're in the right place. In this guide, we'll take you through a typical day in the life of a day trader and provide insights into the average salary of this profession. Whether you're a beginner or looking to advance your finance career, we've got you covered with educational resources and a deeper understanding of the day trading profession.
What Is a Day Trader?
A day trader is a financial professional who uses stock market information to buy and sell financial instruments within the day's trading hours. However, stocks are not the only financial instruments they trade. Day traders may also engage in forex trading, which requires them to master global currency valuation. Depending on their career trajectory, they can work as individual traders or full-time traders for finance companies.
A Day in the Life of a Day Trader
The day-to-day job duties of a day trader involve a wide range of financial, research, analysis, economic, and investment tasks. Let's break it down:
Pre-market screening
Day traders typically start their day around 9:30 am, reviewing pre-market data and scanning the morning market for potential opportunities. This involves using pre-market screening software to get an overview of the market and prepare for the trading day.
First trade
Once day traders have screened the market and identified their target trades, it's time to hit the trading room floor. The initial trade hours are often uncertain and volatile, requiring patience and close observation of the market.
Post-lunch trade hours
The afternoon trade hours post-lunch are considered the most vital trading hours. The market is highly active during this time, and traders need to be excellent decision-makers and analytical professionals to navigate the fast-paced environment.
Post-trade reflection
When the market closes at 4 pm, the active part of a day trader's job role ends. At this stage, traders reflect on their strategies, options, and trade choices, often keeping a detailed trading journal to track valuable data for future reference.
Variable job duties
A day trader's daily job duties can vary depending on the type of trade they engage in. For example, pattern day traders have specific requirements, such as making a minimum of four trade executions in five days and maintaining a portfolio value higher than $25,000. Forex traders, on the other hand, focus on profiting off foreign currency parity valuations.
How to Become a Day Trader
If you aspire to become a day trader, there are several educational routes you can take. In addition to a business and finance education, you'll need quick decision-making abilities and knowledge of short-term trading strategies. Here are four educational pathways to consider:
Day Trader Degrees
A bachelor's degree in a relevant business subject area such as accounting, finance, economics, business management, or financial technology is the standard requirement for a day trader. However, a two-year associate degree can also be acceptable for this profession.
Day Trader Online Courses
Massive open online course (MOOC) platforms like Udemy, Coursera, and edX offer excellent trading courses that cover everything from screening prices to understanding financial markets. These courses can provide you with the necessary background and skills to succeed as a day trader.
Day Trader Bootcamps
While day trading is predominantly a finance and economics discipline, it also requires business analytics and technical analysis skills. Attending data analytics bootcamps or fintech bootcamps can help you acquire these in-demand skills quickly.
Day Trader Certifications
Obtaining professional certifications in the trading sector can significantly boost your credibility and enhance your chances of landing a day trader job. Some of the top certifications for day traders include the Commodity Trading Advisor Certification and the Certified Financial Technician (CFTe) certification.
How to Get a Job as a Day Trader
Finding a job as a day trader can be challenging, as it requires a high level of finance, stock brokerage, market analysis, and business administration skills. Here's a step-by-step guide to help you navigate the process:
- Learn Business, Finance, and Trading: Start by getting the required education in financial management, technical analysis, stock trading, economics, and business administration.
- Get an Entry-level Business, Accounting, or Finance Job: Gain professional experience by working in relevant trading jobs and connecting with industry professionals.
- Learn to Trade: Develop an in-depth understanding of various types of trading, trading tools, financial market analysis, and trading strategies.
- Choose your Day Trader Profession: Once you have the educational background and relevant job experience, choose the type of day trading role that suits you best.
- Get Professional Certifications and Start Applying for Day Trader Jobs: Acquire professional certifications to strengthen your candidacy and start applying for day trader positions.
The Average Salary of a Day Trader
According to ZipRecruiter, the average salary of a day trader is $80,081 per year. However, this can vary based on factors such as educational qualifications, industry experience, professional background, job designations, and place of employment. Here's a breakdown of the day trader salaries at different experience levels:
- Entry-Level Day Trader: The average salary for an entry-level trader is $45,436, with cities like San Jose, Oakland, Tanaina, and Wasilla being the top-paying locations.
- Mid-Level Day Trader: Junior traders earn an average salary of $84,535, while forex traders can expect an average salary of $98,107.
- Senior-Level Day Trader: Senior traders, holding management or senior positions, earn an average salary of $101,792.
Job Outlook for a Day Trader
While the United States Bureau of Labor Statistics does not provide a specific job outlook rate for day traders, it projects a four percent increase in jobs for securities, commodities, and financial service agents between 2020 to 2030.
Conclusion
If you're interested in a career that combines financial analysis, market research, economics, and stock trading, then becoming a day trader may be the path for you. With robust technical and business analysis skills, you'll be equipped to make smart investments within short time frames. So, why not give it a shot? Take the leap into the exciting world of day trading and see where it takes you!
Image: An excited trading manager holding a silver tablet and celebrating a bull market. A Day In The Life Of A Day Trader.
