Day trading is one of the most popular methods of making money online. It involves buying and selling financial assets such as stocks, currencies, commodities, and cryptocurrencies with the aim of making a profit.
In most periods, traders buy assets and hold them over a short period, Often less than ten minutes. This is it no To say that your trading day is It is limited to those ten minutes only. There is a lot of research and analysis behind it, those being a whole part of your job!
In this article, we will answer a common question about how many hours a day trader should work.
Trading vs investing
Day trading is very different from investing. in day trading, the The market participant has a shorter contract horizon. Their goal is to buy and sell assets within a few minutes. As such, these merchants Need to spend more time trading on a daily basis.
On the other side, Investors have a longer horizonWhere they buy assets and hold them for a long time. As such, most investors don’t necessarily need to spend a lot of time each day. In fact, many investors have been known to go an entire year without investing.
Related “ Value Investor vs. Trader
Both models can be profitable for the participants. For example, Warren Buffett, who makes some investments every year, has become one of the most successful investors in the world.
Likewise, some day traders, especially in companies like Jane Street, have become very successful over the years.
Types of day traders
In an effort to determine the number of hours one should spend in day trading, It is important to note the two types of day traders.
First, there are people Who trades day on a full time basis. These are the people who only make money from day trading. These people often spend most of their days trading.
Secondly, there are those Who trades day on a part-time basis. These are the people who have 9-5 jobs but want to make money day trading on the side. These will usually spend a few hours day trading.
Both approaches can be successful. In fact, in some cases, part-time traders tend to have more success than full-time traders.
A day in the life of a full day trader
The day trader’s schedule will always be Depends on Some factors like financial assets They are trading and their trading style.
For example, Day traders who focus on forex have more hours to trade because the forex market is usually open 24 hours a day. The same applies to cryptocurrencies Traders, who have access to the data on a daily basis. Stock dealersOn the other side, pickup window To day trade on a daily basis.
typical A stock day trader has a similar schedule every day. First, they spend some time each morning going over the top stories of the day. This includes looking at the news that broke in the evening session and its impact on the market.
Pre-market and first hour
Secondly, they look at the events in Pre-market session. This is a period that occurs between 8:00 AM and 9:30 AM
Pre-market period can provide them with information on Best and worst performance In the market. In some cases, traders focus on these stocks, especially those with higher relative volume.
Day traders also like to open their positions in the first half hour/hour after the markets open, taking advantage of the high volatility and overnight gaps.
They often make a lot more profit in this time frame than in the midday hours. If you don’t want to spend 8 hours in front of your trading software, now is the time to take advantage of it.
Professions for your style
Third, they start next Do an analysis of the stocks they are interested in. This analysis can be brief or take some time, depending on their experience.
Traders can take advantage of short movements to initiate multiple trades per hour. This approach forces those who adopt it in long trading sessions to spot as many opportunities as possible.
On the other hand, swing traders tend to initiate only a few trades per day. For day traders, on the other hand, the time horizon is the end of the day.
Other times we have to look at market conditions. Although we have strategies that allow you to take profits in any case (if they are executed well, of course), some times / some days it can be a good idea to stay out of the market.
In short, coercive trading is never a good idea. If the asset does not reflect what you have included in your trading plan and you are not convinced, do not open the trade. You risk just throwing your money away.
Closing and extended hours
Finally, day traders tend to like it Follow the maquette closely until the end of the regular session. As for the opening, the closing is a major part of the trading day because it features a lot of volatility and opportunities to open small positions or close one’s positions.
Some traders continue to trade during the extended hours, although this can only be remedied with limited tools.
In addition, traders do other things during the trading day. This includes:
- Take breaks for meals In most cases, many traders take breaks during the trading session. This includes during tea breaks and lunches.
- Committee meeting For floor traders, they often participate in committee meetings where they deliberate on major events.
- Client meetings – For hedge fund managers, they can spend time in client meetings, where they talk about their performance.
- Take careHere we include both physical health, through exercise, and mental health, with meditation or yoga.
Day traders working hours
Hence, the common question asked on The number of hours that traders work each day. The correct answer to this is that It depends On trader type and strategy They use.
Many part-time traders tend to spend less than an hour trading. On the other hand, full time traders tend to spend more time trading on a daily basis (between two and five hours).
It is worth mentioning that There is often no link between the number of hours traders use and their performance. Sometimes, part-time traders tend to do better than full-time traders. It all depends on your skills and to some extent, luck.
How to improve your day trading
There are many things you can do to improve your day trading. Some of these are:
- Have a trading journal A journal is a document in which you write all the information about your trades. In most periods, this journal can save your time by avoiding some time-consuming tasks.
- Uses Time saving tools – You can save a lot of time by using some time saving tools like watchlist and scanner.
- He. She Invest in high quality IT devices such as computer, smartphone and internet. Sometimes, people waste a lot of time due to slow devices.
- Take breaks – Well, we’ve already said this, but it’s really something important and often underestimated. You should always take breaks in your trading. These breaks will help you save time and boost your mental state.
In this article, we have sought to answer the important question of how many hours you should spend on your trading.
The answer is that it all depends on what kind of trader you are. If you are a full-time trader, it will take longer as compared to when you are trading part-time.
Anyway, we need to stress that day trading is not easy, and you will not be able to make huge profits by working for minimum amount of time. Or, at least, not at the beginning of your career. The important thing is to be consistent in your efforts and diligence.
Useful external sources
- How many times can an investor trade a day? – Quora