Most people who watch videos of traders making millions on stock exchanges are left wondering, “Is this really possible?” Is it possible to turn trading into a profession and make it a daily source of income? Let’s weigh the pros and cons and explore how traders actually make money.
Possibility of Profit
To understand the potential of day trading, it’s essential to grasp how this method works. Day trading is a strategy in financial markets where traders aim to profit from short-term price fluctuations by opening and closing positions within a single trading day.
To achieve noticeable profits in day trading, volatility is key. Cryptocurrencies, as some of the most volatile assets, can rise or fall by 3% to 12% in a single day, depending on market capitalization and liquidity. Choosing the right asset is critical for success.
Is It Possible to Make Money?
Yes, earning decent money from day trading is entirely possible. For example, Ethereum, with a market cap of nearly $409.81 billion, rose by 6% in the past 24 hours. Just three hours ago, it was 10% lower than its current price. A day trader could have profited twice today—once by shorting during the drop and again by going long during the rise (data as of 24.01.25 12:00 UTC).
For details, visit: Movo ETH/USD Trading.
Let’s Calculate the Earnings of a Day Trader
Imagine a trader starts with a $100 deposit.
- Opening a position with a 10x multiplier gives them $1,000 to trade.
- A 10% drop in price yields a $100 profit on ROI.
- A subsequent 4% rise adds another $40 in ROI.
In just two trades on today’s Ethereum fluctuations, an attentive trader could earn around $140 in 3 hours.
Day trading offers opportunities for those who can navigate market fluctuations wisely. While it comes with risks, selecting the right assets and using tools like multipliers can significantly amplify potential returns. With the right skills and discipline, even beginner traders can achieve profits in the fast-paced world of day trading.
How to Make Money in Day Trading: Key Rules
Making money in day trading is possible. But the key to the success of the example above is that the trader couldn’t simply predict the trend direction without specific knowledge. So, what’s most important here?
Technical Analysis on Charts
First, a day trader determines the trend direction using 1-minute, 5-minute, and 15-minute charts to identify trends, applying three indicators:
- Moving Averages (SMA, EMA): Helps smooth price data to determine the direction of the trend.
- MACD (Moving Average Convergence Divergence): Indicates when trends might change.
- RSI (Relative Strength Index): Helps identify whether an asset is overbought or oversold.
Additionally, focusing on volume as an entry indicator can help confirm the trend. The simplest indicators on the chart are candlesticks and Renko, but it’s important to understand the differences between them.
Support and Resistance Levels
Identify key levels where price action is active. These levels help forecast potential market reversal points:
- Find previous lows: The level where price previously stopped and reversed upwards serves as a support level.
- Identify previous highs: The level where price reversed downwards is a resistance level.
By the way, you can determine an ascending trend line by identifying a sequence of higher highs and higher lows.
Common Challenges and How to Make Money in Day Trading
Every day trader should use the key principles of risk management: don’t trade all your funds, use the minimum multiplier with a small deposit, and, of course, always use stop orders. This helps avoid liquidation during sudden trend changes due to high volatility.
What other challenges await day traders? There are several:
- Crowd Influence: Self-discipline is crucial here. The ability to follow your own opinion rather than being swayed by behavioral patterns is key.
- Making Quick Decisions: Always allocate enough time for technical analysis before opening a position. Your trading decision should be well thought out.
- Breaking Your Own Strategy: Lack of discipline and failure to follow your established trading strategies can lead to losses.
- Unexpected News: Sudden news or economic data can shift the overall market trend in a matter of minutes.
- Technical Problems: System failures, order execution delays, or issues with your internet connection or personal equipment can negatively affect your trading results.
How to Make Money in Day Trading: Factors for Success
Day trading can indeed be profitable. However, the success of day traders relies on mastering five key pillars:
- Market Knowledge and Expertise: Continuous education and exploring diverse trading strategies are essential. Start with the basics, like reading the best books for beginner traders.
- Consistent Trading Practice: Regular operations help build experience and refine skills.
- Risk Management Rules: Always follow strict risk management protocols.
- Emotional Control: Maintaining discipline is critical to avoid impulsive decisions.
Even the most successful traders adhere to these principles.
Insights from the Top Traders
George Soros
A legendary day trader who achieved enormous success in financial markets. His most famous trade occurred during “Black Wednesday” in 1992 when he shorted the British pound and earned approximately $1 billion. This event became a landmark in financial history, showcasing his expertise in currency speculation.
- Soros’ Tip: Understand the boundaries of risk and be prepared to accept financial losses. Avoid greed; if the market isn’t favorable, it’s better to exit a position.
Jim Simons
A brilliant trader and mathematician, Simons founded Renaissance Technologies in 1982, pioneering quantitative trading with advanced mathematical models and algorithms. Under his leadership, the fund became one of the most successful hedge funds, earning billions of dollars. In 2014 alone, the fund generated $1.1 billion in profit, with assets valued at $20 billion by 2018.
- Simons’ Tip: Successful trading requires an objective approach, maximizing the use of mathematical models and minimizing emotional influence on decision-making.
John Arnold
Arnold earned his first billion at 33 years old and became one of the most successful energy traders in the world. He founded Centaurus Advisors in 2002, which grew into one of the top hedge funds in the market.
- Arnold’s Tip: Success in trading comes from focusing on a specific niche. Avoid trading everything at once; instead, specialize in one industry and stay informed about its developments. Risk management is critical for sustained success.
The Psychological Aspect of Day Trading
As you can see, day trading offers opportunities to make money. However, this type of trading demands immense focus and discipline. The psychological aspect of trading is crucial; without it, success is unlikely.
It’s no surprise that many intraday traders transition to medium- or long-term trading once they’ve built sufficient capital. These approaches require less screen time and place fewer demands on emotional resilience.
Fees and Costs
If you aim to make money as a trader, remember that a portion of your profits will go toward fees charged by exchanges or brokers. These fees are usually minimal but can add up depending on your trading volume and frequency:
- Trading Fees: Includes taker fees (for closing a position with a market order) and maker fees (for opening a position). These range from 0.1% to 0.5%.
- Financing Fees: Charged each time you open a position using leverage.
- Liquidation Fees: Applied when your position is liquidated due to adverse market movements.
Proper preparation and trend analysis help ensure that profits significantly outweigh fees.
Your Profile to Make Money in Day Trading
Want to know how to make money trading during the day? Start by setting up your trading profile.
For example, let’s consider MOVO:
- Download the App: Start by downloading the platform from the official site.
- Register and Verify: Fill in your details and complete the verification process (takes just a few minutes).
- Fund Your Account: Deposit funds, which can be amplified with leverage.
- Start Trading: Once set up, you’re ready to trade.
Additionally, subscribe to the broker’s social media channels to stay informed about bonuses and giveaways.
Alternatives in Money Making with Trading
Day traders can also profit from other trading strategies that involve shorter or longer timeframes:
- Scalping: Holding positions for just seconds or minutes.
- Medium-Term Trading: Positions are held for weeks or months.
- Long-Term Trading: Also known as “buy and hold,” this approach suits stock market assets.
- Swing Trading: Positions are held from several days to a few months.
Also learn about the type of trading that the professionals are hiding.
FAQ
How to Make Money with Trading?
Earning money through trading requires financial discipline, market knowledge, and continuous learning of various strategies. Mastering both technical and fundamental analysis is crucial. Once you acquire these skills, sticking to your own trading strategy will significantly improve your chances of success.
What Are the Steps to Make Money with Trading?
To profit from trading:
Choose the right market and asset (preferably one with high volatility).
Conduct thorough technical analysis.
Stay updated on relevant news and events.
Identify the market trend before opening positions.
How Much Does a Day Trader Earn?
A day trader’s income depends on their knowledge, experience, market conditions, risk management, and emotional discipline. On average, a skilled day trader can earn up to 10% of their deposit in a single day, though results may vary significantly.
