While being a day trader can really be profitable, it also comes with some disadvantages that you cannot just shrug off.
In this article, we’re going to discuss the different advantages and disadvantages of having day trading as your career.
Pros
You become your own boss
A day trader doesn’t have to follow a boss when he is trading. Most day traders do it in their personal spaces at home. If they ever have a boss, it’s their own person.
Arguably the most endearing advantage of day trading is that you don’t have to go to an office and follow orders just to make money. With day trading, you manage your own time and schedule. You do your own tasks and you can always take a rest if you feel like it.
You don’t have to have to high education
In the financial world, you might get lucky and land a job in a good company. However, before you can do that, you have to have the required educational attainment for a position.
There are positions that require special kinds of training, formal and expensive educations, and other stuff. Being a day trader doesn’t require you to have those kinds of attainment.
The only stuff close to education that you have to have are probably seminars and online crash courses for technical analysis and such.
You can make huge profits
One of the best things about day trading is that you can make disproportionately huge amounts of profits if you do it properly—and many can do it properly.
You can get self-employment benefits
When you’re a day trader, you are technically self-employed. And when you are self-employed, you can write off certain expenses for tax purposes. This thing cannot be claimed by any employed individual.
Cons
You don’t have a consistent pay
The benefit of those who have a day job is that they receive regular payments. This is quite stable, although you’d be boxed in an office and you would not expect to earn a higher salary quickly.
As a day trader, on the other hand, you will mostly depend on your skills to be able to earn quite consistently. If you fail to give it your best, you will likely fail to pay your bills too.
There’s always the risk of substantial losses
Even though day trading can really give you huge profits, the risk of losing your capital is ever present. In fact, there are some surveys that show that many newbie day traders never reach a profit-making level.
One of the biggest reasons for this is because many traders suffer substantial losses due to borrowed money and leverage, which is rampantly used by many day traders.
There’s a huge chance for stress and exhaustion
Day trading can be exciting for aggressive traders, but it would be difficult and stressful for those who don’t have adequate risk tolerance and enthusiasm for speedy trades.
You need to be very focused and alert to spot possibly profitable trades. And because of the excessive demand of focus, you would definitely be burnt out one way or another.