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How Much Money Day Traders Can Make (Stocks, Forex and Futures)

Hi Cory, I am very appreciative of your detailed write ups on trading. They think they are doing something wrong and keep switching strategies. There are no fast legal ways to earn such money in the world. An IPO is the first time a company issues stock. Is this the right thing to do? This is largely attributed to the use of leverage in the forex and futures markets which can magnify returns and losses.

Watch video · Options Action: Instant money in Zoetis PM ET Thu, 25 June | Options traders have been turning deal chatter into quick profits. Thursday afternoon, trading in animal health company Zoetis was halted on a Wall Street Journal report that the company was approached by Canada-based drugmaker Valeant Pharmaceuticals for a potential takeover.

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Any precise numbers would be untrue because even professional traders don't have a stable profit. Generally speaking, after getting enough experience, it is possible to make a living out of options trading. And yet, the key point is that if it is your main job you must get used to income fluctuations. It varies from an average salary to even six digit sums of money.

As a consequence,considering the unstable income and the pressure they experience while trading, professionals have to be extremely calm and realistic, avoiding sudden emotional outbursts.

As for the main points that cause these variations, the most decisive factor is definitely your initial investment or budget. However, it is by far not enough to ensure yourself a profitable activity as the minimum account at most of the brokerage firms is considerably higher. Additionally, the money generated even if you win all your trades wouldn't be enough to pay the fees and commissions.

Notwithstanding, a common pitfall is margin trading. It is quite elusive especially among novices. Margin traders are rather prone to get in debt than strike it rich. To conclude, options trading offers you endless opportunities, but in practice it mostly depends on the amount invested, your strategy , experience and how you can handle your emotions.

Wow, seems like everybody is a PRO here. Does your heart rate go up before you place a trade? Do you sleep well at night with your positions on? Do you know what Delta and Theta mean? Do you know how to place an option combination trade? How long have you been trying for and how many trades to you have placed in your trading career? Seriously, if you don't know how to answer the question, why stick your nose there?

Lets assume you are trading income strategies: However some months you will make less, other months will lose some, so if you know what you are doing 30—35 should be realistic. For you to quit your job and start trading for a living you should have over k in your account, that will give you access to portfolio margin, which will let you use close to half a mil in margin. This might be a situation where: You could also ask yourself how much do people who choose to start their own business make.

The question is too broad for any meaningful answer. Many Hedge funds and position traders utilise options as a tool to lay off risk and speculate also.

You can lose and win big in the billions easily with options… If you've got the strategies and the money to cover the margin required to place the trades. Trading in the stock market is like legal gambling and not an honest investment in the long term period. This is where it is different than investing, which is longer-term and safer.

Some people can develop an unhealthy obsession with trading, which can lead you to lose a lot even all of your money. If you feel like you're losing control of your ability to make rational choices about investing your money, try to find help before you lose everything. If you know a professional who is smart, rational, objective, and unemotional, ask that person for help if you feel out of control. I am planing to quit my job and make my profession in share trading.

Is it good or risky? The above article offers lots of good tips. Note that the article says that "some losses are inevitable. Do not quit your job until you have demonstrated the ability to make money consistently in trading. Pick a broker who provides a "virtual" trading platform for practicing, as noted in Part 1, Step 4 above. Not Helpful 1 Helpful It might still go down further.

No one, not even your broker, can tell you what the price of your stock will do in the days or years ahead. The best plan is to pick stock of companies likely to prosper in the future and simply wait for them to do so. Not Helpful 4 Helpful Not Helpful 6 Helpful I invested money in some company, but I have lost it.

Can I keep the stocks until it gets higher? I don't want to sell them. A stockholder does not actually gain or lose money until he or she sells the stock they hold. You will receive whatever the price is when you sell shares less trading costs. Not Helpful 7 Helpful Not Helpful 5 Helpful Can I make profit from online trading?

Is there any charge for trading? Many people make money trading online. Not Helpful 0 Helpful 2. What are the best books someone can read to understand stocks and investing?

That's a good place to start. Also read anything by or about Warren Buffett. Two good choices are "Buffett: Not Helpful 0 Helpful 1. See Choose an Online Broker. Not Helpful 0 Helpful 0.

No, not for an inexperienced trader. A beginner is more likely to lose money than make it. Is BitConnect good site to invest money? Answer this question Flag as How a virtual trading platform works? Once I opened a broker account, do I need to deposit starting capital money? Include your email address to get a message when this question is answered. Already answered Not a question Bad question Other.

By using this service, some information may be shared with YouTube. Did you try these steps? Upload a picture for other readers to see. Tell us more about it? Click here to share your story. Making Money Online In other languages: That means you always can see the bars prior, or a pattern to indicate the stop loss and entry, before getting into the trade. Just need to be on it, and watching that chart…as the price moves, always be thinking about where your trade setups could develop, how far the price could move target, and is the trade worth taking and where the stop loss would be.

To be safe, reduce the position size slightly in case of slippage which would increase the risk and therefore reduce the position size.

This way, on most trades you know you will be in the ballpark of your correct position size. Then only adjust it if there is a trade where the stop loss distance is quite a bit greater. HI Cory, Is it possible for people to make 5 trades if they are trading only for hours a day? Will of course depend on the asset they are trading, how volatile it is price moves are what create opportunities , what their strategies are and what time frame they are trading on.

But it possible that on some days there may only be one or two opportunities. But that is pretty rare. I purchased your book and find it very informative as for me trying to learn forex trading might as well be trying to learn another language!

In reading your book and following your videos and articles online do you think there is enough volitility in the market these days to make money at forex trading for newbies? Still getting my butt kicked daily lol Should a person look at another pair to day trade with more volitility?

So if you end up liking that pair better, you can stick with it. Thanks for the prompt response! Sometimes I think to trade others markets around the world but one thing stop me trade forex.

Anyway to use futures in CME like a base to scalp and day trade? Best Regards from Rio de Janeiro, Brazil. But it is not the same as the stock or futures market. Forex is fragmented, as it is not a centralized market.

So you will see different things on the Level 2 depending on which broker you are using. Some brokers have bigger liquidity pools that others. If trying to trade off just level 2 in forex, i suspect there would be a bit of a learning curve, but it is likely possible.

I personally mostly rely on my charts as opposed to level 2, so that is about all the insight I can offer. Cory, thanks for reply. I will email they to check this and test this hypothesis. If it is not showing up, it may hidden. Right click in the MarketWatch window and select Symbols. While in there you can also select gold, silver, natural gas, etc, under the various headings.

I will check this later with FXOpen. I think I find my style less time consuming and can still make the same amount give or take, monthly. But I still think there is great potential in there for day trading if you can utilize your strategy into automation and robot ai trading. This article was definitely informative and well put together. My husband already day trades futures, but not forex.

I have a thinkorswim paper money account and have been diligently learning for about 3 months. Hi, thank you for the wonderful article. You could face a significant lose or even lose your entire account where the price to move even several percentage points against you unable to exit at planned exit point. I realize the trade might trigger below my set point but why would it FAIL altogether?

Practice in a demo for months logging in the plus hours you have mentioned that it takes for a person to start seeing some profit. Or practice in a demo trading stocks for months. Once consistently profitable in the demo with stocks seek a trading firm that can lend me their capital to trade stocks. Are these percentage returns possible within this time frame of practice? Are better percentage returns possible within this time frame of practice? What are your thoughts on the second approach? And based on your experience do trading firms require or prefer people with college degrees?

I prefer trading on my own, but firms do have the advantage of helping you develop better discipline someone looking over your shoulder and you may be able to gain some insight from the traders around you. But this comes at the cost of them taking some your profit or getting a return some other way …at the beginning this cost is typically offset by access to more capital and reduced trading fees.

So it is a viable way to enter the industry. Depending on the firm, they may train you more typical of brick and mortar firms with a physical location , or they may only be looking for traders with a successful track record more typical of firms who only operate online and allow traders to trade remotely. If you go on your own, with I would go with forex.

The returns are totally dependent on the work put in. But as you can see from the simple math…if you have a viable strategy, and are disciplined and practiced enough to follow it, great returns are possible. But here, it just makes sense in the way everything is explained. And you reiterate some basic tenets time and again which is great for us newbies.

You make a great teacher, thanks. I have a tdameritrade accout. Do you have or know of a good course that can teach someone like me how to start off with say 5, I just need to do this..

I need training and someone trustworthy who is not just trying to sell me a bag of goods…. Long-term goals are good. Most traders find a return they are comfortable with and that is what they make it MAY be a dollar amount, or a percentage amount, or a certain number of pips in the forex market.

Everyone is different…even if they are trading the same strategy. Some people are more aggressive, some people are more conservative, some people can trade all day, some people can trade for an hour. Expect to work hard for at least 6 months to a year before you start to see income. Several months will be spent in a demo account trading fake money and making sure you can actually make a profit.

Even once you know it strategy it takes time to learn all the variables to watch for, and to develop the confidence to place trades exactly when they need to placed not a second before or a second after. You have some things to work on first. I assume you are interested in day trading? I would read through some of the free forex content in the Tutorials drop down menu for a basic understanding of the market and some general strategies to get you started and practicing in a demo account.

I have compiled a Forex Guide https: Thanks for the comprehensive overview! Just one quick question regarding the day trading section: In other words, can I apply all of my buying power for each of the 20 trading days and still sell all my positions at the end of each day and not violate the policy?

So, instead of having 20 trading days, we would only have about 6 trading days for a total of 30 actual trades 6 x 5 trades a day. Please let me know if I am not understanding the freeriding rule correctly because it would awesome if I could max out my buying power each day!

Thank you for your time. It is best to check with your broker or the broker you intend to trade with …so you and them are both clear on how you wish to trade and can handle any issues now before you begin day trading. I have never experienced a problem with this. Day traders often make MANY trades in the same and different stocks each day. Most day traders use all, or most of, their capital in a day…or even WAY more, if you add up the value of many trades which could be taken in a day. As long as you have capital and margin to cover all your trades, you are fine.

As long as your positions are closed before the closing bell, no need to worry about settlement too much. BUT AGAIN…check with your broker so you are in full compliance with any day trading rules they may specifically have some brokers impose additional restrictions, etc.

Yes, there are several sites and platforms, and even brokers, that suport this type of functionality. In forex they are typically called PAMM accounts. I am in the UK and looking for a platform for a begunner for for ex market and eventually will use the same platform from a demo version to real version after some months. Maybe investing 10k gdp. Can you please advise what platform I should use in the UK?

Taxes and tax rates will depend on where you live, and if trading is your primary income how often you trade. Hi, I was wondering why you do not mention day trading options. Options are a great market. I prefer the mentioned markets for day trading. The CME imposes position limits on traders…. You would likely experience problems before these limits though.

As you start getting bigger and even in the 10 to 30 contract range you will start to get partially filled on your winning trades but always receive all the contracts on a losing trade. Here, it is your capital that will cap your position size. I want to start trading but not not got a trading account yet, but my question is when I do set a trading account up what is the lease amount of money I can put in my trading account where I can start making a good amount of money.

How much capital you need varies by market, and whether you want to day trade or swing trade. Since this is a day trading article, I will assume you are interested in day trading.

For how much money you need to day trade, see: Open a real account only after you have proven to yourself that you can profitable in a demo account for several months in a row.

You can eventually make a living off that. This does take time though—expect to practice for at least 6 months to a year before you start to see profitable returns in a demo account. Then another few months to acclimatize yourself to trading with real money. So it is possible, but not common.

I prefer boring any day. I trade the trends that occur, and step aside for news events only entering after into normal trend trades. My bread and butter is being able to trade everyday boring moves. For some people, there may be more opportunity in some markets than others, but for me, I do the exact same thing no matter what market I trade, so the results are pretty much exactly the same. I do trade big momentum moves as they occur in forex, stocks and futures.

Some days are bigger, but that is just what the market provides, and not a function of the market I am trading. All markets provide ample opportunity way more than any trader can take advantage of. Of course, each person trades in their own way, so if they have a strategy that works on stock-based news events, but nothing else, then they should trade stocks.

But I can only speak for me. I focus on boring everyday trends, which makes how I trade fairly universal across markets, and not much changes when I switch from one market to another…except that stocks require a lot more capital for the same return I get elsewhere. I should also point out that I could care less if I am trading against all algos.

If you talked to forex traders, they will say that trading forex is great. If you talk to futures traders they will say trading futures is great. All these markets exist because people succeed at trading them while the mast majority lose. Whether you trade stocks, forex or futures, your odds or success are the same low! By all means trade stocks if you like them. But forex and futures are also viable options.

Put 6 months to a year of hard work into any market, and your odds of success are the same, and your income likely will be as well. Have traded all three markets, profitably, for multiple years, I can say that without question. The only difference is the capital you need to trade them and a few details like trading hours, etc.

But that said, trade what interests you most. I agree that the good traders stay silent. Thanks for your knowledgeable response. I just still disagree with your analysis of returns possible in FX and futures. If they could, they would be managing a successful, small hedge fund and the world would know about it. I just think you should be steering newer traders away from FX and futures if possible since it is way harder to find trades with context and tempting to overtrade.

Technical trading alone in FX and futures can still lead to big drawdowns. And how could any new trader expect to compete with algos anyway? So you are correct, as soon as large sums of money hedge fund are involved, the returns drop because it becomes harder to find liquidity and great trades with more capital …but my focus here is the individual trader, who CAN make seemingly high returns. There is so much money passing back and forth that based on my strategies it seems to be the easiest to day trade.

Futures are also good, and another market I really like because of the inherent leverage in them. But I disagree on steering traders away from futures and FX. If you know what you are looking for, these are more lucrative markets, because much less capital can be utilized effectively. So with pretty much everything being equal, I choose forex or futures because they are more accessible to the person starting out with a smaller bankroll. So you need to be losing all trades and not winning any to see any significant drawdown…and since our winners are bigger than losers it takes less winners to make back the loss.

So with a good strategy drawdowns are minimal, and in a worst case scenario it is a VERY slow capital drain, but if this is happening the trader can hopefully work on finding the issue that is causing the drain in capital before it becomes significant. Cory, thank you again for your diligent response. You are clearly passionate about this industry and about helping others. It is evident in your patient thought and articulate delivery. Less successful traders than you who would have quickly dismissed my first question and then arrogantly summarized my commitment and character.

Some of these traders worked very hard and still failed. I wish I would have engaged some good mentors early on. Most of my trading knowledge was built by observing and reading about every good trader I could find. Almost doubled my money until I got burnt out and lost control of my emotions.

From that experience, I learned that good health is just as important as any trading strategy. I know it sounds wacky, but I believe in adrenal fatigue, and I think adrenaline does often flow during trading. But there are ways to effectively manage it. I did this while working a full-time job. It was always interesting trying to speak intelligently on an incoming call while managing an erratic position. Anyway, my family kind of lost faith in trading as income after that, or whether it was even healthy.

But given that a vet like you says there are opportunities in every market, I believe it.

Since each option represents an interest in underlying shares, this will amount to a total sale price of $ Since the investor purchased this option for $, the net profit to the buyer from this trade will be $ That's a % return on a 5% move in the underlying shares. Not bad. When the option expires, IBM is trading at $ Once you understand options you will realise you can make much more money than trading stocks alone with less risk i. E no margin calls if you short or max loss has already been priced in. Control emotions and follow your rules you set on a trade setup and you will be successful. The only reason anyone starts trading stock options is to make money, and one of the most common questions people ask is “What can I realistically expect to make in my first year of trading?” It’s a critical issue, but you probably won’t like the answer very much.