Day Trading For Beginners: 6 Secrets To Consider Before Becoming a Day Trader

Thinking about ditching your regular 9 to 5 job to become a day trader? Day trading is a legitimate career that can potentially be lucrative. However, before you quit your job, you should first figure out whether you have what it takes to be a day trader. Here are five secrets you should know before making a decision:

What is Day Trading?

Before you start, it is important to understand what day trading entails. In essence, a day trader aims to buy a financial asset at a low price and sell high all within a single day, taking advantage of dips in prices along the way. For instance, you might buy Bitcoin when the price is at $40,000, see the price skyrocket to $48,000 in a matter of hours, and then sell at a 20% profit. Then the process starts again the following day. This is in contrast with long-term trading in which the investor holds onto the asset with the hope of gaining returns down the road. With day trading you have an opportunity to gain profits quickly, but you also face higher risks as compared to long-term trading, where your profits are slow and steady, but much less risky because they are based on historical patterns.