Lifestyle
The life of a day trader doesn’t start out with hot women and fast cars, even though many want to believe this. If this is what you want then let this be your ambition to succeed. If you want to reap the benefits of being a successful day trader you need to realize it’s not going to happen overnight or within the first few years. Just like any business, you’ll need to put the majority of your time, energy and money into this venue. So before we get into the real life scenarios and the sacrifices that you’ll need to make lets start off with a positive note and list the benefits of being a day trader.
Freedom
The first thing that comes to mind is the freedom to live where you want. You only need a computer and an internet connection which gives you an unlimited amount of destinations to choose from. Now location does matter because the time zone factor will have a great toll on your life style and virtually on your success. I started out trading long grave yard shifts on the West Coast of the United States. It didn’t take me long to realize if I’m going to do this for the rest of my life, I need a normal lifestyle that doesn’t require sleeping in the day and begin trading at Midnight.
Best Time Zone for a Day Trader
I jumped on the first opportunity that I had and moved to a better time zone. Now the time zone that you pick will probably depend on your personality. If you like to wake up early and finish work around Lunch time, you should be in the UK or possibly NYC. If you like avoiding rush hour and slipping in through the door after everyone else, move east of UK for a GMT+3 Timezone. GMT+5 India, Qatar, Russia, China are all great places for the sleepy heads that like to get stuff rolling around lunch time. The last few hot spots are in Asia like Malaysia and Thailand at GMT+7. I’d say that even Hong Kong and Singapore are pushing it too close as London Open would be at 4PM GMT+8. Therefore, that puts Tokyo, Sydney, and Los Angeles out of the question as London Open is past dinner time which would be the least likely picks for a day trader. Since London Session has the greatest trading volume you’ll want to maximize your efforts by trading the most active sessions.
Independence
The market is your schedule. You plan your day around the market open/close and news releases. The rest is up to you. You still have a responsibility to monitor the market and do your job but there’s no pressure ( well there shouldn’t be). You don’t have to put on a trade, you don’t have a dead line, you shouldn’t have any obligations forcing you to produce ( quota – projections). Last but not least, you don’t have a boss and this alone will make you live a happier life.
Taxes
Capital gains are subject to a 15% federal tax in the US. Some countries are even Tax free ( spread betting – UK). There’s nothing like making money and not having to give 30%+ to your government.
For all the Right Reasons
You should want to become a trader for the flexible lifestyle and not the wrong reasons. For example, the possibly of becoming rich. I often see the majority of traders and investors that want it all and want it now. They feel like if there is not a trade running at all times they’re missing out on an opportunity. This mentality will only hinder your success and make more money for your broker. Trading success is mostly about emotions and how you control them. If you’re chasing your dreams with every trade you will over expose your risk capital and end up on the side lines saying ” what did I just do!” I’ll stop here for now and in part two I’ll go into detail of what you’ll need to do.
