The average hourly wage of a day trader is $1.03 per hour. This is around $26,600 a month. So $4,824 – $4,810 = $5,600 a week.
This means $7,000 a year of a day trader’s earnings. That is a total of $10,000 a week or $20,000 a year.
To make a long term investment in a day trader, one needs to look at the long term returns, and not just the short term returns.
Day traders need to keep track of all short term risk, while the long term returns will be high or low.
As for the long term returns of a day trader, they are more dependent on how high or low the price of the commodity goes.
The lower risk of buying a low priced “flash” commodity makes a lower risk or “inflation risk” the most risky. This is because you can only increase your risk by spending more time in the market. When you look at the risk of more buying and selling a short position, the risk goes down, and the risk of less buying and selling goes up.
However, there is also a more profitable strategy of going long. You buy more in a given time frame, than if you sell when supply and demand go down. That’s because you can use your “extra money” to buy and hold more in excess value, and sell when supply and demand go up.
Another thing to keep in mind, the market is like a long game of poker. If you play poker with $20 at the end of the game, you are likely to draw the next hand that you play.
You don’t always have to play poker. Some short term trades can be a profitable way to take advantage of the fact that we can trade for many more days or weeks at a time.
Some day traders sell their positions in stocks, bonds, or commodities short, on the hope that they make a fortune. They are also looking to make some money from selling their short positions after the market closes.
It’s best to keep your trades simple and to stay away from trading on margin.
Short Term Trading Summary
If you are ready to make the transition into long term trading, here is the short term trading summary:
Buying: Your goal with your short term trading is to buy low and sell high in a given market.
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