Recently, with the pandemic’s second act of high inflation and unstable markets, the number of people trading has dropped, although the idea that it’s a way to make easy money persists — even though most financial advisors would say the risk far outweighs the reward.
Shay Huang first dipped her toes in trading in 2014. Now it’s her full-time job and she teaches others her methods under the name of The Humbled Trader.
If you’re hoping to follow in Huang’s footsteps as a successful day trader, here’s what you need to know.
1. Prepare for the worst, and hope for the best
In an industry dominated by middle-aged men — according to Zippia, 90% of day traders are male and their average age is 43 — Huang stands out. But she’s worked hard to make a name for herself.
If she had pass on just one lesson from her near decade of experience, she’d encourage new traders to be financially stable before they start trading.
And even if you have plenty of money to spare, she cautions against throwing all your savings into your investing account. Make sure you’ve got a substantial emergency fund set aside in case things go south.
Be sure to manage your expectations too. While Glassdoor says that the average salary for a day trader in the U.S. is $107,800 (which breaks down to $78,109 base salary and $29,691 in additional commissions), there’s a lot of sweat equity involved in making that income.
“I would say the 90% [who] fail are usually the people who couldn’t get through the first year,” Huang says.”It’s true that only 10% of traders are profitable,” says Huang. “And I would say only about 3% are actually making big money … but I will say most people … have the wrong expectations.”
Leave a comment