As people around the world seek to have more control over their investments and take a more active role in investing, many are eager to become day traders and learn more about these professionals who can make a full-time income by trading stocks and other assets. However, it's not always as simple as it seems.

The Top Line

  • Being a profitable, full-time day trader is an appealing career that could allow you to create your own hours, earn a high income, and have the flexibility that you need.
  • Though being a day trader certainly sounds attractive, there is actually a lot more that goes into it than what you might think.
  • Day traders are highly disciplined individuals who must work very hard to beat the average returns of the market.
  • There are many factors and variables that go into determining how much money day traders make and how successful they are in day trading.

What is a Day Trader?

Before you can fully understand what makes a day trader successful and what determines how much they make, you will need to have a grasp on what exactly a day trader is. A day trader is an individual who makes money by buying and selling equities, stocks, commodities, and other assets. Typically, the strategy is to buy an asset low and sell it at a higher price later on.

However, some day traders also take "short" positions on assets, meaning that they are betting on the asset declining in price. There are a variety of ways that day traders can make money on the assets that they trade, and many of them will utilize these different ways to trade.

Factors That Determine Earnings

Being a day trader sounds simple. Just buy low and sell high, right? Well, in fact, it is much more complicated than that. There are a variety of factors that will impact a day trader's ability to earn a living through trading activities. Here are just some of the factors that can influence earnings ability when day trading.

Time

When you are a day trader, one of the most important resources that you have is time. The more time you have, the more time that you can spend learning and analyzing charts. This allows you the experience and time you need to really learn a lot about trading and trends.

Discipline

One of the most important characteristics that you can put on display as a day trader is discipline. If you want to succeed in day trading, you need to be able to have a plan and stick to it. Those that don't do this will quickly find themselves struggling to obtain and maintain a profit.

Markets

Another factor that goes into determining how much money you will make as a day trader is which markets you decide to trade. Some markets have more volatility than other markets. One such example is cryptocurrency markets. These markets are much more volatile, giving you more of an opportunity to earn more. Other markets, such as Forex, don't move quite as often or in such large increments, limiting your ability to make a profit unless you are using high leverage.

How Much Do Day Traders Earn?

According to ZipRecruiter, day traders typically earn between $37,500 (25th percentile) to $100,000 (75th percentile) with the top 10 percent of day traders earning $150,000 or more. As you can tell, if you become proficient as a day trader, you can earn a comfortable living.