How to Trade Stocks for a Living

Do you get excited when “Market Week” comes on? Does the idea of spending all day trading stock shares make your heart race with anticipation? If you answered yes to either of those questions, then you just might want to learn how to buy and sell stock market securities for a living. The good news is that the world and the securities industry have changed a lot in the last 30 years. No longer do professionals have to stand in giant circular pits and scream technical lingo at the top of their lungs, with a short break for lunch.

Modern traders work from the serenity of home offices, buying and selling securities via an online brokerage platform. They don’t need to be licensed or take any tests as long as they buy and sell for their own account. If they want to work on behalf of others, then a bunch of regulations come into play. But for the most part, the majority of individuals who do this for a living spend their own money and bank all the profits and losses themselves.

Here is what you should know if your goal is to enter this lonesome but potentially very profitable profession:

Types of Trading Strategies

There are as many strategies as there are traders, but in general most stock market professionals fall into one of three groups: day traders, swing traders and long-term traders. The latter group rarely works full time. They often put in one or two hours each week, tracking their own portfolios and perhaps making a few purchases or sales. Swing traders are more active and can work full time or part time, depending on the size of their portfolios and how often they try to capture profit on price moves.

Day trading is the most active of the three categories because they spend all day in front of their monitors watching for tiny price moves that can deliver a profit. The trick is making huge buys and scalping just a small amount of profit on each share. Ten cents, for example, might not sound like a big play, but if you purchased 2,000 shares and sold them all for a ten-cent profit, you just snagged a $200 payout in as little as two or three minutes. Put together a full day of deals like that and you’re headed to the winners’ circle.

Pros and Cons of a Trading Career

The biggest pro for many people is the profit potential, but an equal number enjoy working alone, struggling through the ups and downs of the securities game and taking part in an exciting, challenging profession. On the downside, it’s possible to lose your initial investment if you day trade or get heavily into swing trading without the proper training. Most experts suggest that anyone considering a career in this field should spend a year of intense research and doing simulated buying and selling. Like any other job, there’s a learning curve. If you already know how the markets work and have done a bit of online stock buying, you have a bit of an advantage.