“Whether or not you’re actively trading, information is currency.”

Ted Bailey

Pros and Cons of Working as a Day Trader

advantages and disadvantages of being a day trader

You think about becoming a day trader? While this job can be indeed exciting and has many other advantages, there are still many downsides related to this profession.

Thus, make sure to check out all the pros and cons of being a day trader in this article. Chances are that you will change your mind and go for an alternative career instead.

Day Trader Job Profile

Job DescriptionDay traders make money with trading stocks and other financial market instruments on a short-term basis. While few of them succeed, many others quit day trading pretty soon.
SalaryWhile some day traders make a six-figure income, most day traders struggle to make a living out of what they are doing and some of them even lose all their money.
Job SecurityNon-existent since you work self-employed.
Job SatisfactionRather poor since you will have to deal with enormous amounts of pressure as a day trader.
Work-Life BalancePoor since you will work long hours and will often not be able to unplug from work.
Physically / Mentally Demanding?Working as a day trader is extremely mentally and emotionally demanding.
Future OutlookRather poor since most day traders will just no longer be able to make any money in the future.
RequirementsNo special educational requirements, even though you should have profound knowledge of how financial markets work and a degree in economics or finance can really help you in this regard.

Advantages of Being a Day Trader

  1. Day traders can work location and time-independent
  2. You can make really good money as a day trader
  3. You can work self-employed
  4. Working as a day trader can be exciting
  5. Day traders have a great level of flexibility
  6. You don’t have to dress up in the morning
  7. Day traders can work from home
  8. You don’t have to work in a normal job
  9. You can even travel the world
  10. Day traders can work indoors
  11. You can avoid physical work
  12. You can engage in forums and share your ideas through social media
  13. Day traders never get bored

Day traders can work location and time-independent

One important advantage of being a day trader is that you can work location-independent. This means that you can basically work from everywhere you want. You can work from home, from a coffee shop or from any other location you like as long as you have a good internet connection which enables you to trade several financial market instruments.

You are also time-independent as a day trader, meaning that you can either work in the early morning or late at night. This depends on your individual preferences and whether you are rather an owl or an early bird.

You can always work when you feel best and full of energy and this can make your life as a day trader just much more fun compared to working in a job where you always have to get to your workplace at the same time and are not free for exemptions at all.

You can make really good money as a day trader

Some day traders also make really good money from what they are doing. If you are really good at day trading, you can make a six-figure income per year and have a pretty decent lifestyle. Sure, many day traders will fail in the long run and most of them barely make a living out of day trading.

Yet, a minority of people who are willing to work hard and also use latest technologies still have a good chance to make some money from day trading.

You can work self-employed

Another upside to working as a day trader is that you don’t have to work for someone else. If you work in the corporate world in a conventional office job, chances are that you get pretty annoyed and frustrated over time since you have to comply with all of the rules and regulations inside your company and just don’t feel free to do what you want to do. You will also often have a boss controlling what you are doing on a regular basis.

As a day trader, you will definitely have a much higher level of freedom since you can just do whatever you want to do all day long as long as you comply with trading laws and don’t engage in insider trading or other shady tactics that might bring you in a lot of trouble.

Working as a day trader can be exciting

Many people also really enjoy their job as a day trader since no day will look the same. Sure, you will work in front of a computer screen for long hours like in many other office jobs. Yet, you will never know what happens on the different stock exchanges and what political news may come up.

While this implies a high level of uncertainty and will be uncomfortable for many people out there, some people really like this kind of uncertainty and if you are one of those people who just want to be thrilled every time they go to work, becoming a day trader can definitely be a promising career path for you.

Day traders have a great level of flexibility

In general, day traders also benefit from a great level of flexibility since they can work whenever they want, wherever they want. In fact, it can be quite nice to just take some time off whenever you need it without having your boss to ask for permission. You can also just make many nice trips during the day and work in the evening.

If you have kids, you will also be able to bring them to school and pick them up later in the day. Thus, working as a day trader can also be great since it gives you more flexibility to manage your private and your professional life at the same time.

You don’t have to dress up in the morning

As a day trader, you also don’t have to dress up in the morning. It doesn’t matter how you look, the only thing that matters for your success at work is how well you understand the market and how lucky you are that day.

While many people spend more than an hour every morning to look good to impress other people they even secretly don’t like at all, you can just get up in the morning without spending any time on those things. You can just get right to work and focus on the things that really make or break your day.

Day traders can work from home

You also don’t have to commute to your workplace as a day trader. Sure, you could rent an office to do your work. But why bother with it? You can just stay at home, turn on your computer and you will be good to go. In fact, working in a cozy and familiar environment often leads to more success than working in a rather artificial office environment.

As a day trader, you can just enjoy a nice breakfast at home while checking the markets and evaluating the potential that individual stocks might have this specific day.

You don’t have to work in a normal job

Many people also dream about becoming day traders since they just don’t like their day job at all and just want to get out of the corporate world as soon as possible. In fact, working as a day trader can be much more fun and gives you much more freedom compared to a regular office job and it is definitely understandable why many people want to make this switch.

Consequently, becoming a day trader can also be a great choice if you are just sick of working in a normal 9 to 5 job you secretly don’t like at all and if you desperately want to make a change towards a more independent working environment in the future.

You can even travel the world

Another benefit of being a day trader is that you can also travel the world while working at the same time. Since you are location-independent and can work basically from wherever you want, you can also travel to many different countries and can experience many different cultures.

This can be quite fascinating and can also give you a different perspective on how the world works in general. Hence, if you make enough money as a day trader, you will be free to travel as long as you have a working internet connection.

Day traders can work indoors

While many people have to work under extreme weather conditions outdoors, you will have the privilege to be able to work from home or in another cozy environment, protected by your four walls.

While other people will work under extreme heat or outdoors in the snow, you will even have the luxury to use heating or air conditioning to optimize your working environment as a day trader.

You can avoid physical work

While the job as a day trader can be mentally exhausting, you can still avoid physical work. For instance, a construction worker will not have this luxury and will have to carry heavy things all day long. This can not only be quite annoying, it can also lead to serious health issues, especially once these construction workers become older and some of them even have to quit their jobs.

As a day trader, you will not have those kinds of physical health problems from your work since you can sit in a comfortable chair and can also work out in the gym to get some exercise after work so that you maximize your chances to stay healthy in the long run.

You can engage in forums and share your ideas through social media

Since day trading has become increasingly popular over the past decades, there are many forums out there which you can join and where you can discuss day trading strategies and everything related to it. You can see the success and failure of other people and can develop strategies with them that might work better than the previous ones.

Not only can you share your ideas in these forums, but you can also share them on various social media channels where you will get responses to your questions almost immediately.

Hence, if you have any problems with your trading platform or with other technical things, there will often be people who can really help you out in this regard for free.

Day traders never get bored

Day trading is more than a job for many people. In fact, day trading is often a lifestyle and many people have built their whole lives around it. Since no day will look the same and market conditions frequently change, you always have to adapt to new trading environments since you will only stay successful if you evaluate all the information that is publicly out there on a real-time basis.

While all this implies significant stress, it also leads to a state where time will fly and you will likely never get bored in this exciting world.

While day trading may sound like a dream job to you until now, we also have to talk about the downsides related to this career path in the following.

Disadvantages of Being a Day Trader

  1. Day traders have no secure monthly income
  2. You may even lose money
  3. Some day traders have lost it all
  4. Unclear whether day trading can really still make you money
  5. Rather poor job prospects in the future
  6. Day traders have to sit in front of a computer for many hours
  7. Extreme levels of pressure related to day trading
  8. You often have to work long hours
  9. Day traders often have to study markets all day long
  10. Many day traders also work on weekends
  11. It’s hard to unplug from your job
  12. Being a day trader is difficult if you have a family
  13. Most people crack under the pressure sooner or later
  14. Many day traders develop mental problems in the long run
  15. Day trading is just not fulfilling for many people

Day traders have no secure monthly income

One problem with being a day trader is that you simply don’t have a secure monthly salary like in many other jobs. You will just earn what you make with trading and this might not be enough to pay your bills.

In fact, many young day traders are often surprised regarding how difficult it really is to make money on the stock market and many of them greatly underestimate the level of experience that is really necessary to compete in this world.

You may even lose money

Many day traders will even lose money. In fact, swings are huge and even though you might have a good strategy, luck still plays an important role in the short run.

Hence, even though you might do your work in a profitable manner over the course of the year, you may still lose money in some months and you should make sure that you save money in good months to cover your losses and your expenses in bad months.

Only then will you be able to pay your bills on a consistent basis and avoid any financial trouble.

Some day traders have lost it all

Some traders which are overly optimistic and don’t have the discipline to set strict limits for the day can even lose everything they have. In fact, if you trade certain financial market instruments, you can lose much more than you invested and many newbies fall for this trap.

Day trading is only suitable for real experts who exactly know what they are doing since only one mistake can lead to a state where you lose all your money. In extreme cases, you may even end up homeless and have to apply for welfare if you don’t know what you are doing as a day trader.

Thus, make sure that you are pretty careful and to get profound education in this field before making your own trades that could potentially ruin you.

Unclear whether day trading can really still make you money

Many experts out there even claim that day traders will not be able to make consistent profits in the long run. Sure, there may be good days and luck will be on their side.

However, on average, many day traders indeed lose more money than they win and the overall profitability of working in this industry can be considered pretty questionable.

Rather poor job prospects in the future

Many big banks already use arbitrage systems to use small price differences between different stock exchanges to their advantage. In the future, it will be extremely hard for day traders to still make any money from what they are doing since artificial intelligence and machine learning will make many day traders obsolete since they can simply do the job much better and large financial institutions will just dominate the market and will often not leave any room for day traders to still outperform the market.

Day traders have to sit in front of a computer for many hours

While you will have a much higher level of freedom as a day trader compared to working as an employee, you will still sit in front of a computer screen for many hours, just like in a normal office job. This can be quite annoying, especially if you are the type of person who really needs time on the fresh air and wants to work with his hands.

Thus, while some people will be happy with the working environment as a day trader, others will not become happy with it at all and you should ask yourself whether you rather want to work with your brain or with your hands.

Extreme levels of pressure related to day trading

Another downside to working as a day trader is that it simply implies enormous levels of pressure. Many people out there think that making money with day trading is pretty easy and that you just have to push some buttons. The reality is that day trading is a brutal game and you compete with top-level experts in a pretty competitive industry.

This also means that you will have many losing days and that you will often have to worry about how to pay your bills. In turn, you might lose your confidence in your trading strategies and the whole system will begin to crumble in the long run.

Consequently, you need an extremely stable mindset for being successful as a day trader and the majority of people out there just don’t have this emotional stability.

You often have to work long hours

Day traders also often work long hours since they always have to place orders and study the different markets to get a potential edge over the competition. Apart from just trading, this also implies reading research articles and newspapers to stay ahead of the game.

In fact, many day traders work 60 hours or more every week and you should really ask yourself whether you are willing to work that much or if a 9 to 5 job will be more suitable for you.

Day traders often have to study markets all day long

Many day traders also barely get enough sleep since they often work until late at night and get up in the morning pretty early to read the latest news and to adjust their trading strategies accordingly.

In fact, many day traders can barely sleep at all since they are so stressed and know that small mistakes can lead to big financial losses for them.

In turn, sleeping problems are quite common among day traders and this can greatly decrease your overall quality of life.

Many day traders also work on weekends

Another disadvantage of working as a day trader is that you will also work on weekends most of the time. Sure, you don’t have to place trades since most stock exchanges will be closed. However, you will still need this time to educate yourself about latest developments and to exchange your ideas via social media or on forums to stay ahead of the game.

Always remember that only a small minority of day traders will stay successful in the long run since they just outwork all other market participants while most people will just quit the game sooner or later.

It’s hard to unplug from your job

If you are a day trader, you will just always be on. It’s just the price you have to pay to be part of this industry.

You will have money at risk almost all day long and this means that you will always be at work on a mental level.

This can lead to burnout sooner or later and can just make your life much more stressful.

Being a day trader is difficult if you have a family

You might not hear about that too often, but many day traders also have serious family problems. Since you will never have a secure income, it is just hard to plan a future with you and if you want to have kids and a working marriage, chances are that you will not achieve this goal as a day trader.

Most people crack under the pressure sooner or later

Since the pressure that comes along with day trading is enormous, many people just quit day trading sooner or later. In fact, if you are not a mentally stable person who can deal with the huge swings, you will be far better off working in a different job where you will have a stable income and higher job security in general.

Many day traders develop mental problems in the long run

Day traders are not only at great risk of burnout, but they can also develop serious mental problems like depression.

This is especially true for day traders who engage in extremely risky strategies and cannot unplug from work at all.

Day trading is just not fulfilling for many people

While day trading is extremely interesting for some people, others just want to work in social jobs where they can do good for others instead of just caring about themselves.

Hence, if you are the altruistic type of person who wants to make the world a little bit better, working as a day trader will just not be fulfilling for you.

Top 10 Being a Day Trader Pros & Cons – Summary List

Being a Day Trader ProsBeing a Day Trader Cons
Being a day trader can be excitingMany day traders don’t make a living
You will be quite flexible as a day traderWorking as a day trader can be stressful
You can work from wherever you wantDifficult job if you have a family
Day traders don’t have a bossHigh levels of insecurity
You don’t have to dress upMany day traders suffer from burnout
Day traders can travel the worldOnly the best will survive in the long run
You can work indoorsDay traders often work long hours
You can avoid working in normal jobsYou will always be on
Day traders can avoid physical workQuestionable future job prospects
You can share your ideas in communitiesSome day traders lose it all

Should You Become A Day Trader?

I hope I had been able to show you the advantages and disadvantages of being a day trader. In the end, you have to decide for yourself whether you still want to work in this field or if you rather want to go for a more stable career path instead.

Also make sure to check out the following articles:

Advantages and disadvantages of working as an investment banker

Advantages and disadvantages of working as a financial controller

Sources

https://www.investopedia.com/articles/trading/05/011705.asp

https://en.wikipedia.org/wiki/Day_trading

About the author

My name is Andreas and my mission is to educate people about the different career paths that are possible in our current state of the world. In my opinion, people often make the mistake to choose their profession solely based on how much money they can earn from it instead of doing what makes them really happy.

This is quite sad and I just want to give people a more objective picture of how a fulfilling career could look like. I did the same when I started working in consulting after finishing my Master’s degree in Economics. However, I’ve quit pretty soon after that since I haven’t found true meaning in my job.

Now I can do what I really love to do and I want to enable as many other people as well to go this exciting path towards happiness instead of money.

I conducted various interviews with employees to give you a good impression of what working in different fields will look like and that you can make the best possible decision regarding your future career choice.

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