This Article is About
day trading
stress lifestyle
retirement income
volatility
million dollars
robots
Day Trading For A Living
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Day Trading for a Living

Many ask if day trading for a living is still possible given all the changes in the markets since the wild days of the first decade of the new millenium. Although the rules have changed a bit (and are still changing), the concept of day trading for a living is still alive and well. Here are a couple of ways investors are still earning an income in the market today. We'll start with a modest/high capital method and end with a low capital method.

Collecting Capital Gains on Dividend Stocks

Admittedly this is a method for people with a capital base in excess of $250,000 and other sources of income, including retirement income such as social security or pensions. This method can produce income monthly, quarterly, annually, or semi-annually depending on the asset selected and the income needs of the trader.

Typically what is done is an investor will pick a modest yielding income trust and invest a significant portion of their portfolio in it. Many time the volatility in these income trusts is higher than the actual dividend itself. In those cases the trader cashes in the capital gains and waits for the price to fall again (keeping the difference between buy and sell price as income). In the case where the stock/trust fails to increase in price the investor sits on the investment for a while longer and collects the dividend as income instead.

Day Trading for a Living with Low Capital

I think it fair to say most people day trading for a living probably don't have a quarter of a million dollars in liquid assets to use as seed capital. There are other ways of accomplishing the same level of income or more in the market, however they are riskier than the dividend method above. Although many are of the opinion that the best option for making money in the market with low capital involves using forex robots I tend to disagree. Day trading for a living shouldn't require the investor to live a high stress lifestyle week after week.

There are much less stressful ways to invest in that market, in particular by using low cost short term currency options trading instead. Low cost forex options strategies reduce costs for traders by eliminating spreads and commissions in the market while still providing opportunities for high returns. Rather than spend five days a week / 24 hours a day monitoring highly leveraged positions, an investor can instead make trades with an hour or day long duration and still produce the same amount of income. This allow the trader to pick when to trade and not have to constantly monitor margin requirements day and night.


Street Talk

Fascinating article on day trading, Steve.

Reply
  about 8 years ago
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