How Much Money Can You Make from Day Trading?

With each passing year, it seems making ends meet becomes more and more difficult. This pretty much forces countless people to seek new and interesting ways to earn income, with many finding lucrative opportunities via the internet. If you have a bit of capital or a great idea, there are thousands of ways to make technology work for your bottom line.

Anybody with an internet connection can easily invest and trade online from the convenience of their office, their home, or anywhere else. This has led to a new generation of day traders who earn significant sums without ever leaving the house.

This begs the question: just how much money can somebody realistically make from day trading? We'll take a look at the answer and give you the details on what to expect.

Consider Your Capital

One of the biggest factors in how much somebody can earn day trading is how much they invest initially. The larger the amount of money invested, the more dollars that can be earned through each trade. Generally, investing a minimum of a few thousand dollars is recommended, as this will allow for daily returns to be potentially equivalent to a daily salary.

It's also worth noting that the more money you have to invest, the more you can make with reduced risk. For instance, somebody investing $5,000 who wants to earn $1,000 in one month will have to make riskier bets than somebody investing $20,000 who wants to earn the same.

Knowing What You Know

Another crucial component of earning money via day trading is the inherent knowledge you have of the markets. Regardless of the stock or instrument being traded, a lack of understanding about the industry, market conditions, or other factors can turn a seemingly great buy into a huge regret.

As such, day traders must work diligently to understand basic market conditions and pursue new information proactively. A variety of resources and tools exist that can help day traders, such as social trading platforms. Sites such as InvestinGoal help explain the pros and cons to social trading platforms and what benefits they can provide.

To Leverage or Not to Leverage

A huge factor in how much can be earned via day trading is whether you utilize leverage in your trades. Via leverage, you can multiply the amount of usable capital in your account, potentially amplifying your investment several times over.

However, for day traders – especially those who are new – this can be a risky gambit. If you suddenly take a big loss, it will disproportionately impact the amount of capital you have. Generally, leverage is only recommended for those who have at minimum an intermediate understanding of stocks, trading, and how leverage can impact such factors.

Ultimately, day traders' earnings can vary considerably depending on their investments, leverage, and market conditions. Many day traders with a bit of experience can expect to earn around 15% monthly with an aggressive and micro-managed approach, but yields can be more or less depending on multiple effects. With this information in hand, you can begin researching day trading more extensively and decide whether it is a good investment approach for you.