If you aspire to trade stocks, get into blockchain trading, or take the next step in your finance career, this guide is for you. We’ll show you what a day in the life of a day trader looks like and answer the question, what is the average salary of a day trader?
Keep reading to find educational resources to master beginner, intermediate, and advanced trading skills and better understand the modern day trading profession. We will also cover a typical day in the life of a day trader and include day trader salaries and job outlook rates.
What Is a Day Trader?
A day trader is a financial investment and analytical professional who uses stock market information to buy and sell financial instruments within the day’s trading hours. To be a successful day trader, you need to gain an in-depth understanding of trading platforms, stock performance, and market tendencies.
Stocks are not the only financial instrument that a day trader buys and sells. In addition to stock options trading, a day trader may also engage in forex trading, which requires you to master global currency valuation. Depending on your career trajectory, you can either become an individual trader or a full-time trader for a finance company.
What Does a Day Trader Do on a Daily Basis?
A day trader’s day-to-day job duties cover a wide variety of financial, research, analysis, economic, and investment tasks. This job requires you to be vigilant, informed, and analytical when developing a trading methodology and choosing a trading plan for the day.
- Pre-market screening. A day trader typically begins their job around 9:30am with pre-market data watch and morning market scanning. Professional traders often use pre-market screening software to get a basic market overview, prepare for the trading day, and mark down the potential opportunities.
- First trade. Once day traders have screened the market and identified their target trades, the trading room floor gets busy. The initial trade hours are highly uncertain and volatile. Due to the high risk, the morning trade hours can be a slow burn. Professional traders must practice patience and observe the market closely.
- Post-lunch trade hours. The afternoon trade hours post-lunch are often considered the most vital trading hours. The trading market is highly active and requires traders to commit to making trades throughout the trading day. Active traders must be excellent decision-makers and highly analytical professionals to survive the afternoon sprint.
- Post-trade reflection. Once the clock strikes 4pm and the market closes, the active part of a dat trader’s job role ends. In the next stage of day trading, these professionals reflect on their strategies, options, and trade choices to prepare for the next day. Some traders keep a detailed trading journal where they jot down valuable data about market resistance levels, entry and exit prices, overnight positions, and trade outcomes.
- Variable job duties. A day trader’s daily job duties vary depending on the type of trade. If you work as a pattern day trader, you are required to make a minimum of four trade executions in five days and end all your day trades with a portfolio value higher than $25,000. On the other hand, forex traders use the foreign currency exchange trading method to profit off foreign currency parity valuations.
How Can I Become a Day Trader?
There are several educational routes you can take to become a day trader. Along with a business and finance education, you will also need to acquire quick decision-making abilities and learn short-term trading strategies, both of which will help yield profitable day trading results.
Below are the top four educational pathways you can take to enter the day trading profession. If you are looking for additional resources, top trading books and online tutorials on trading rolls will help you succeed as a floor trader.
Day Trader Degrees
The standard degree requirement for a day trader is a bachelor’s degree in a relevant business subject area. You can get a Bachelor’s in Accounting, Finance, Economics, Business Management, or Financial Technology. However, if you don’t want to spend four years in college, a two-year associate degree is also acceptable for this profession.
Day Trader Online Courses
The massive open online course (MOOC) platforms such as Udemy, Coursera, and edX are great platforms to learn day trading and other subjects. The top trading courses on these platforms are a great way to get all the necessary background in how to screen prices, better understand financial markets, and take educated risks to meet your daily profit target.
Day Trader Bootcamps
Coding bootcamps are short-term tech training institutions that prepare you for an entry-level career in the tech field. Although day trading is predominantly a finance and economics discipline, it also requires business analytics and technical analysis skills. You can attend the best data analytics bootcamps or attend a fintech bootcamp to learn these in-demand skills.
Day Trader Certifications
An industry-relevant professional certification in the trading sector will highly boost your candidacy and professional credibility. The verified certificates from your online courses are a great addition to your professional portfolio, but having professional trading certifications is a much better option. Below are the top professional certifications for day traders.
The Commodity Trading Advisor certification offered by National Futures Association is for expert day traders looking to gain professional qualifications. You will need to score a minimum of 70 percent to pass the Series 3 Exam.
The job of a day trader includes elements of financial and technical analysis. This Certified Financial Technician certification is best suited for traders seeking an internationally applicable financial qualification. You will need to pass two levels of CFTe to acquire this certification.
How Can I Get a Job as a Day Trader?
It isn’t easy to get a job as a day trader, and it typically requires a high level of finance, stock brokerage, market analysis, and business administration skills. Below is a step-by-step guide to getting a job as a day trader.
Steps to Finding a Job as a Day Trader
- Learn Business, Finance, and Trading
The first step to paving a path for a day trader career is getting the required education. You will need to learn financial management, technical analysis, stock trading, economics, and business administration. You can choose an educational route that suits you best.
- Get an Entry-level Business, Accounting, or Finance Job
The second step is to gather professional experience. Apply for relevant trading jobs in the business sector and work at these positions for a year or two. Connect with industry professionals during your journey to advance your day trader career.
- Learn to Trade
The next step is to get an in-depth understanding of how to trade. In this step, you should learn the various types of trading, price screening, trading tools, financial market analysis, and trading strategies.
- Choose your Day Trader Profession
Once you have attained a trading educational background and relevant job experience, it’s time to find the role in day trading that suits you best. You can become a forex trader, pattern day trader, individual trader, discretionary trader, retail trader, or options trader.
- Get Professional Certifications and Start Applying for Day Trader Jobs
The last step is to get a professional certification to boost your candidacy and start the job application process. You can also add day trade projects to your portfolio for a higher chance of landing a job.
What Is the Average Salary of a Day Trader?
According to ZipRecruiter, the average day trader earns a salary of $80,081 per year. The average salary of a day trader varies according to their educational qualifications, industry experiences, professional background, job designations, and place of employment. Below are the day trader salaries you can expect at different experience levels.
Salary for an Entry-Level Day Trader
According to ZipRecruiter, the average salary for an entry-level trader is $45,436, with day traders falling under this occupation. ZipRecruiter further lists San Jose, Oakland, Tanaina, and Wasilla as the top-paying cities for this position.
Salary for a Mid-Level Day Trader
Mid-level day traders often fall under the categories of specialized traders or junior traders. According to Glassdoor, the average salary of a junior trader is $84,535. Forex trading is another mid-level day trading job that can bring a higher salary. According to Glassdoor, the average salary for a forex trader is $98,107.
Salary for a Senior-Level Day Trader
Senior-level day trader jobs cover management or senior positions in commodity trading, stock market trading, forex trading, securities trading, and real-time trading. According to Indeed, the average salary of a senior trader is $101,792.
Job Outlook for a Day Trader
The United States Bureau of Labor Statistics (BLS) does not have a specific job outlook rate for the day trader profession but categorizes them as a financial service occupation. According to BLS, jobs for securities, commodities, and financial service agents are projected to increase by four percent between 2020 to 2030.
Should I Become a Day Trader?
Yes, you should become a day trader if you are interested in a career that integrates financial analysis, market research, economics, and stock trading. To become a successful day trader, you need robust technical and business analysis skills for fast decision-making. This fast-paced career is all about smart investing in a short time frame. If that appeals to you, go for it.
A Day in the Life of a Day Trader FAQ
The day-to-day job duties of a day trader cover trade planning, market research, stock trading, financial analysis, price screening, and business analysis. The day begins with a pre-market preparation phase and then moves onto morning and afternoon trading hours. Lastly, there is an end-of-the-day trade decision reflection.
Yes, you can earn a sustainable salary by becoming an individual trader, but due to the volatility of the trade market, you should expect to lose your money some of the time. You should have a livable personal savings account to prepare for any rainy days.
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There are many skills needed to become a successful day trader, including stock market trading, financial market analysis, forex trading, business analysis, and quick decision-making skills. You will also need to master specific skills to cater to the preferred trading approach of your chosen day trader profession.
Day traders are economics and financial service professionals who can choose to pursue a wide range of trading careers on the trading floor. Forex traders, retail traders, options traders, floor traders, pattern day traders, and individual traders are the various types of day trader professions.
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