How can you make money with day trading? An analysis (2024)

The dream of high income from stock exchange trading appeals to many people. But can you really make money with day trading or is it more of a loss-making business that many people fall for? We have taken a close look at the opportunities and risks of this activity.

How can you earn money with day trading?

All investors and traders who are active on the stock market want to make a profit. If this is particularly successful and a high return is achieved, it is of course also possible to live exclusively from this income. But this requires corresponding sums of money!

There are several ways to reach this point: Those who already have substantial assets can generate further cash flow through a classic dividend strategy, for example. The Options trading can offer opportunities for permanent income. Another alternative with comparatively less capital expenditure is the Day trading.

With day trading, traders rely on Stock market transactions that are already completed after a comparatively short time - by the end of a trading day at the latest be closed again. Leveraged investment products are predominantly used to achieve significant profits in this limited period.

If you want to earn money with day trading, you have to carry out a comparatively large number of transactions, most of which should be positive. Occasional failures can never be ruled outHowever, these should be more than compensated for by the successes. Trading with very few, large positions, on the other hand, has not proven successful due to the higher risk.

Due to the regular profits the capital that a successful day trader uses for trading increases continuously. At the end of the trading day, all positions are closed and the assets are "safe" in cash form in the custody account. Traders can withdraw capital at any time and use it to pay their living expenses, for example.

However, revenue must first be recognized Taxed become. If the most difficult part - actually earning money through day trading - is successful and the profits are booked on the securities account, then but the further procedure is quite simple and day trading as a source of income.

What professional day traders need

Anyone who wants to trade professionally in the short term, i.e. with Day trading earning enough money to cover your own living costs does not require much at first. A computer with an Internet connection, a custody account with a suitable broker and some start-up capital are the only "hard facts" that are necessary.

This has contributed greatly to the attractiveness of the job profile, as you can theoretically earn money anywhere in the world through day trading! This flexibility and the (seemingly) low outlay are attractive to many people.

However, there are other aspects that much more difficult to master are: Successful day traders need the Suitable character and emotional aptitude (concentrated way of working, not prone to emotional short-circuit reactions, analytical, mathematically and financially interested ...).

In addition they have to learn their "tools of the trade", before they can earn money through day trading. This process is difficult to quantify, as the personal prior knowledge and skills play an important role. As a rule of thumb, however, it has been proven that invested at least one year full-time in education and training must be prepared. Only then can you expect to earn money through day trading - but even such a preparation period is no guarantee!

Further expenses may arise from training requirements: books, memberships and subscriptions to special news portals or the services of coaches and mentors can also incur costs.

Day traders must have start-up capital

"How much start-up capital do I needHow to make money day trading" is probably the most common question we encounter in this environment (closely followed by "How much money can you make day trading"). As with so many aspects of day trading, there are also here no simple, clear answer.

In general, it is possible even with small start-up capital, earn money through day trading. Of course, the profits will initially be lower. However, it is actually just as difficult to turn 2,000 euros into 4,000 euros as it is to turn 2 million euros into 4 million euros!

Good Brokers today have low minimum capital requirements. At CapTrader can manage a securities account for example, can be activated with an initial deposit of just 2,000 euros. Lucrative opportunities such as the Margin trading (leveraged trading), on the other hand, requires somewhat higher sums. Nevertheless, it should be noted that it is not usually the start-up capital that is lacking!

Most aspiring day traders can't afford it, exclusively on their specialist knowledge and skills over a longer period of time as a dealer or trader to work. People therefore often try to earn money through day trading as a sideline. The fact that only a few people can concentrate fully on stock market trading contributes to the poor results and high losses.

Knowledge of the assets to be traded

Successful Day trading requires extensive expertise in various areas. This includes, for example, the Understanding day trading charts or day trading indicators. Anyone planning to work with Day trading To earn money, you often jump straight into the deep end and start by analyzing stock market prices, etc.

Although recognizing patterns, making forecasts, etc. is certainly one of the core tasks of a trader, it may also be the basics: First of all, an understanding of the respective assets with which trading is planned should be developed.

Many traders turn to shares, as this asset class is the best known and most widespread. In addition to day trading with shares, there are also numerous alternatives that have their own advantages and disadvantages. Ultimately, however, it only plays a minor role whether you trade shares, commodities, currency pairs or other assets. It is important to know the asset class and the market inside out.

Choosing the right broker

The purchase and sale of exchange-traded products needs a broker - but not just any broker! Because anyone who wants to earn money with day trading has Special requirements and needs. A high number of trades, many niche products, different order types and more make traders demanding clients.

Pay attention to the following important points when choosing your broker:

• Large selection of exchange-traded products, especially in the category in which you want to day trade (e.g. shares, forex ...)
• Favorable conditions, as the costs quickly add up due to the high number of trades. You can only earn money with day trading if you have something left over from your profits!
• Support for a high number of trades. Some brokers (especially at the "entry level") are aimed exclusively at private individuals who only make a few purchases per year. Professional day traders are often unwelcome here and their securities accounts are terminated accordingly.
• Your broker should extensive Market data for you, as you cannot work with incomplete or time-delayed data records under any circ*mstances. Although it is possible to connect external data sources at any time, it is a bad sign if your broker lets you down here.
• Also a professional Trading Software should be provided by your broker. This should contain extensive day trading indicators. Although you can also obtain a suitable program yourself, a good broker will have the tools for day trading in stock for you.
• To earn money with day trading, you need Access to different Order forms. Simple neo-brokers in particular do not offer the right options here, as even simple orders such as a trailing stop-loss or a take-profit order are not available!

How much does a trader earn per month / year?

Making money with day trading is theoretically easy, as even unskilled traders can make a lucky move that yields a return. However, you certainly don't want to make do with just a few euros, but rather achieve lasting profits! But this is where it gets complicated.

The Stock market trading is extremely well documented. Profits, losses, transactions etc. are easy to track. A large number of scientific studies have extensively investigated the world of day traders, scalpers, swing traders, investment bankers and the like. Therefore this ecosystem can be assessed and described very well.

The sad truth: Only a vanishingly small proportion of retailers (between 1 and 3 percent, depending on the study!) earns money in the long term through day trading. The number of successful traders is even higher with a medium-term or short-term approach, as luck plays a greater role here.

There are people among the day traders who succeed in making money, some of which cost several million euros per year through their activities. Records of extreme proportions are also documented: Jesse Livermore successfully predicted the stock market crash of 1929 and was able to generate a total of 1.4 billion dollars (adjusted to today's standards) in two trading days through short selling.

But also manageable profits that allow for a comfortable lifestyle, are certainly to be found. This Fraction of active market participants stands one army of unsuccessful traders, who in some cases simply "gamble away" huge sums of money.

This huge discrepancy makes it impossible, answer the question "How much does a trader earn per month" with a simple figure. The most successful traders can earn so much money with day trading that their monthly income amounts to several hundred thousand euros. The most unsuccessful, on the other hand, lose equally large sums!

Can day trading be scaled?

A major advantage of the day trading concept is the almost infinite scalability: Are you successfully trading knock-out certificates on commodities for 100 euros per transaction? Then you can keep this strategy and simply increase the amount to 1,000, 10,000 or even 100,000 euros (if you have the capital available).

While the Theoretically unlimited amount of trades executed the number of transactions is somewhat different. You can open and monitor only a limited number of positions per day, as extensive research and analysis is necessary before every trade. Through modern Trading Software and the use of artificial intelligence however, experienced day traders can, to reduce this effort. Such partial automation is already available today in many trading programs, such as the AgenaScript of the AgenaTraderpossible.

That makes the Day trading (at least on paper) is an ideal sideline, which can be expanded later if required. In practice However, part-time traders in particular fail disproportionately often: They do not have the time and concentration required to master the art of day trading.

However, anyone who earns money with day trading can income can usually be increased quite well. Success on the stock markets is more of a problem here: most day traders lose money instead of gaining it.

These people earn money from day trading more often than others

The Very good data on day trading and the stock markets in general helps us to identify numerous characteristics of successful and unsuccessful day traders. First of all, one simple fact is evident in all areas of stock market trading: On average, women are much better investors and traders than men.

In all areas of stock exchange trading women perform better - in some sectors, such as "traditional" long-term equity investments, even many times over. Women also manage to earn more money and more often with day trading and suffer lower and less frequent losses. However, the difference between the sexes is less pronounced in short-term trading.

As part of the various studies, the researchers repeatedly Conjectures about the possible reasons for these differences. One popular theory is the better emotional control of womencompared to male traders.

Especially the particularly disastrous Short-circuit reactions á la "now more than ever!" or "now it doesn't matter!" seem to occur much less frequently among female day traders. Euphoria when share prices rise and the risks taken as a result are also less pronounced among women. Overall, the Female traders much more rational day trading, investment and co.

However, this in no way means that men cannot be successful day traders! However, they should benefit from this data and draw important conclusions: If you want to make money with day trading, you should trade soberly and with as little emotion as possible. Short-circuit reactions in the event of problems, but also exaggerated risks at peak times, should be avoided.

How do day trading losses occur?

If you generate more losses than income, you lose money through day trading. But How is it that retailers are unsuccessful in the long term? The answer always depends on the individual, but experts have identified some major problems:

On the one hand lack education and expertise. Time and again, budding day traders underestimate how extensive the field is and how long it actually takes to familiarize themselves with all the intricacies. You start without or with only a fraction of the necessary knowledge. The correct recognition and interpretation of day trading charts or the use of day trading indicators alone require a great deal of expertise (in addition to plenty of experience), as a large number of key figures and patterns are available.

Further problems arise from the Lack of a strategy or deviations from it: Emotional short-circuit reactions often occur, especially after severe setbacks. Traders then deviate from their strategy and take unjustified risks. This reaction is not unusual, as we subconsciously try to compensate for our losses by making a massive profit. To do this, we take risks, even if we are consciously aware of the minimal chances of success.

A third reason for losses in day trading is poor execution of the actual trades. Securing and monitoring the asset as well as relevant signals are part of the job. Time and again, newcomers make professional mistakes due to a lack of concentration, for example, which can lead to catastrophic situations. And sometimes day traders do everything right and still end up with unavoidable losses ...

Earn your first money with day trading

The term "day trader" is not clearly defined - if you open and close a trading position on the same day, you are theoretically a day trader. However, you will only be considered a "real" day trader if you make a certain number of transactions per month.

Typically, the path to the Day trading via a gradual increase in trading volume and frequency. It is rather unusual to suddenly start day trading on "day X" - even if this option might be more suitable due to the high level of education required.

Traders grow into the role accordingly and experience successes and setbacks. Many of them give up along the way - usually after losing huge sums of money. A very small group achieves lasting success.

Newcomers are therefore well advised to gradually get used to the job and gain initial experience. We strongly recommend a demo account and only invest real capital when regular successes are achieved. At this point, the security mechanisms in particular, i.e. stop-loss orders and the like, should function like a well-oiled machine.

When you earn your first money with day trading, you should Never be blinded by the incomeYou tend to react emotionally or have only achieved a few minor successes by luck, but feel professionally overwhelmed? Then you should reconsider your plans and perhaps spend more time on training or practicing on Test accounts use!

Documentation of your own (failures) successes

One simple tool has proven to be an important aid for new and veteran day traders alike: A Trading diary serves to Recording of completed trades and the retention of Experience and knowledge. It contributes to the continuous optimization of our own strategy.

It can, of course, be kept in digital form and filled with just a few clicks by exporting from the respective trading program, for example. However, you should also leave space for notes and information to maximize the effect. Regular Evaluations of your results are part of the activity and help to organize the work in a structured and stringent manner - and not to act on good luck!

For beginners a trading diary has another, particularly interesting benefit: It helps us, Critically scrutinize day trading on a regular basis and rethink our decision. We can use the diary to see whether the results were worth the hard work and whether we actually have the chance to make a lot of money with day trading. Ultimately, we can also see in black and white how high our profit or loss was.

Possible alternatives

Are you put off by the enormous amount of time, work and learning required and the extremely low chances of success? Don't worry, there are In addition to day trading, there are other ways to make money on the stock markets!

For beginners, the Swing trading usually a better alternative. Here, assets are held for longer periods of time - up to several days or weeks. Day traders avoid the risk of overnight positions and close them at the end of the trading day, while swing traders accept these risks. Despite the possibility of sudden price changes at the opening of the stock markets Swingtrader statistically better results.

With successful swing trading, profits can increase over several days and reach enormous proportions before a position is closed. However, the same also applies to losses if these have not been hedged correctly. Compared to day trading, the number of transactions is significantly lower, so that more time and preparation automatically flows into each individual trade.

Swing trading is an activity that almost exclusively part-time becomes. Significantly less time is required for execution, as you do not necessarily have to monitor your open positions - hedging via a stop-loss order is usually sufficient.

Another alternative for security-conscious but still active traders can be Options form. Options trading offers enormous strategic depth and seemingly endless opportunities that can be very financially rewarding. The chances of success here are significantly higher than with day trading - but the few successful day traders can earn higher sums.

In particular, short position strategies can be a Attractive additional income without exposing your capital to undue risk. The continuous cash flow of a successful option strategy is very pleasant, but less exciting than day trading. So if you are not only looking to make money, but are also looking for excitement and thrills, you may be disappointed with an options strategy.

Conclusion: Can you earn money with day trading?

Earn a lot of money, work flexibly from anywhere - Day trading sounds like a dream. But the reality is different: Only a fraction of around one to three percent of all people who opt for day trading, achieve long-term profits!

The vast majority does not earn money with day trading, but loses it instead. This is mainly due to the often lack of preparation and lack of expertise of most newcomers. But emotional reactions and deviations from your own strategy are also detrimental to success.

It takes some time to reach the point where we can reliably earn money with day trading. This can be achieved either through intensive study of the subject matter or by "learning by doing" - but in most cases both!

All these disadvantages and dangers do not mean that you cannot earn money with day trading - on the contrary, some A few experts generate huge sums with intraday trading! However, anyone interested in the activity should be aware that the chances of success are extremely poor and losses are very likely.

A career in day trading can therefore with financial security and sufficient time and motivation may well be conceivable. However, if you want to make money quickly, are prone to short-sighted reactions, do not have sufficient capital or are not interested in the subject, you should stay away from day trading.

FAQ - Frequently asked questions about "Earning money with day trading"