How Does a Day Trader Spend a typical Workday?
The SEC on Day Trading
How day traders spend their workday has a lot to do with their individual temperament, their approach to trading, and their relative success. According to the Securities and Exchange Commission (SEC), day trading is stressful, difficult, and demands great concentration. While it's true the majority of people who attempt day trading suffer catastrophic losses and are forced to quit, many others find day trading a relatively easy and enjoyable way to work from a home office and augment their wealth.
The Reality
Some aspects of the occupation are common to all day traders. There will inevitably be hours spent in front of a computer, or even several computers, watching live charts of markets in real time and studying historic charts after hours. Most traders combine technical analysis, which relies on finding patterns in price movements and determining opportune entry and exit points. Depending on their technique, a trader may also spend a considerable amount of time reading, listening or watching market-related news or conducting other research. Because it can be a lonely existence, many day traders will spend time on the phone with other market watchers or in communication with some form of online trading community.
The nature of markets is to offer protracted periods of relatively uneventful trading punctuated by hair-raising moments of sheer excitement. But traders who experience this as extreme stress or terror are likely those relying on short term gains to cover expenses such as mortgage or rent payments, groceries or other immediate necessities. The best traders are able to eliminate most stress by using so-called "mad money", that is, cash they have no immediate need to spend. Many have a modest daily, weekly, or monthly profit goal and do not take any more risk than is necessary to meet these sustainable targets.
Lifestyles
A day trader's schedule also need not be as fixed as the SEC would make it appear. Electronic communications affords access to markets around the clock and traders can tailor their trading schedule by trading in markets around the world. Thus, many day traders find it quite easy to spend a sunny day at the beach or the golf course and trade in the afternoons and evenings, or to trade early in the day and enjoy nightlife. Of course, this is the sort of confidence that arises from considerable experience.
Day trading is not for everyone. For those with little or no understanding or knowledge of markets, the learning curve is liable to be very expensive. Those who lack discipline will also find themselves parted from their money in short order. But those with the knowledge, the intelligence to process information quickly, and the grace to stay calm under pressure can flourish as day traders. This ongoing competition with oneself, to remain in tune with the market rather than fighting it, is what many describe as the zen of day trading.
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