People have always dropped their jaws when I tell them my salary as a day trader. But not for the reason you might think.

They find out what I do, and they ask, "So you get a salary and then bonus, right? If you don't mind me asking, how much salary?"

Me: "zero".

Them: *confused look* "You don't get a salary?"


Them: *baffled* "How do you make a living?"

It's true, there are some traders who get paid a salary and a bonus. Most of those traders aren't what I would call day traders, though. More on them later.

You're here because you're wondering what you might earn as a professional trader. I'm here to answer that, and a dozen other questions that may arise as you explore trading as a career in prop trading.

man daytrading for a living in an office with many computer monitors with trading charts on them

Day Trader Salary

If you Google day trader salary, you find three types of pages:

  1. Job sites like Glassdoor, Ziprecruiter, Indeed, which report a range of salaries. Some figures are self-reported, most seem like wild guesses. For example, my bay house is in a small town on the Texas coast. Ziprecruiter says an average day trader in my town makes $70,000/yr. Sorry to break it to them, but there is not a single trading firm in this area, for at least 100 miles. They have no data, so they just guessed. And they're way off.
  2. Articles by people who haven't traded professionally or worked in a trading firm. They've just pulled those numbers together, summarized, and made infographics of made-up data. There are some well-written articles, but they're still just guessing.
  3. Slick YouTube Videos and articles by people who will tell you they have the secret to making you rich as a day trader. Most of them are charlatans and fraudsters.

Lucky for you, I have 6 years trading inside a prop firm, 6 years managing client money, and 15 years of knowing other professional traders.

I don't promise you anything, other than a better understanding of day trader pay by the end of this article. 

Let's dig in.

How Much Does The Average Day Trader Make?

Short answer (TLDR): If you throw out all the people who never make a dime, the average day trader probably makes about $300k/yr in profits (pre-split). 

The average, as in the mathematical average, would be impossible to track. Why?

  • Most prop firm day trader compensation doesn't get reported to anyone other than the IRS. The ways its reported (K-1 or 1099) vary, and it's not usually classified as "day trader income". Mine has usually come to me as capital gains from a partnership.
  • Independent day traders don't report their income to anyone but the IRS, and it's usually reported as capital gains. So, the average would also exclude them.
  • There are thousands more who lose money, and nobody is counting them. Some brokerages do report that this is a high percentage of retail traders - Anywhere from 50-90%. Still, that doesn't tell us anything about the average earnings.
Distribution graph showing the distribution of professional day trader earnings, with peak distribution of about 300 thousand dollars and tail-ends of 50,000 and 10 million plus

My hand-drawn estimate of the distribution curve for average profits of professional traders. Note this would include traders who have negative years but are positive overall.

The average I've seen in my experience would also be misleading. That mathematical average would be somewhere in the neighborhood of $1,500,000 a year. That's based solely on:

  • Prop Firm Traders I know personally and have worked with. I've seen their P&L live-in-person on a regular basis (not some twitter post).
  • A handful of retail traders whom I know trade for a living and are very successful.

Why is that so misleading?

The prop firms are two of the best in the country and likely contain several of the top traders in the country. Of course, I can't know that for sure. It's an educated guess based on what I've heard from traders at other firms over the years.

The retail traders I know are closer to my level than the average, because of my experience. 

So, how else can we look at the average trader salary?

How about those with average skill level and work-life balance?

I would define the Average Professional Trader this way...

He/she has all the things that make a successful trader, but not the things that put them at the tail end where the big bucks are made.

  • They have a few strategies with consistent edge
  • They have strong trading psychology and are able to manage their emotions in trading.
  • They practice discipline and stick to their plans and their rules 95% of the time - and they correct it quickly when they stray.
  • They have more than enough capital to size up and make more, but they choose to grow slowly while making a great living doing something they love.
  • They know they will make more in later years, but they're not in a hurry
  • They work hard, but with mostly normal work hours, maybe some night research

Now, remember we left out all the people who never make a dollar, so we need to revisit that. We'll cover it more in the next section, but it's a substantial percentage. If you had enough data to make an accurate average, and you factored in the people who never make it, they would bring that average way down.

Can You Make a Living by Day Trading?

. It is possible, you can make a living day trading, and it can be a great career.

And while I'd love for that to happen for most people who try, it doesn't. I don't want to burst your bubble, but you should know that most people who try don't succeed.

Distribution graph showing the distribution of all day trader earnings, with peak distribution of about negative 25 thousand dollars and tail-ends of negative one million, and 10 million dollars plus

My hand-drawn estimate of the distribution curve for Profit/Loss of all traders. Note, the only reason the lower tail-end stops at -$1,000,000 or more is, there aren't many individuals who can lose more than a million and still have capital (or margin) to trade.

In the prior section, we set aside all the people who try to make a living trading and never come close. That group is made up of...

  • those who get hired to trade at a firm and never become profitable enough to get a paycheck. And they aren't slouches. It takes effort to get hired by a prop firm.
  • solo traders with their own capital who never make enough profit to pay themselves a solid wage even once. Worse, they may lose a lot of their capital.
  • hopefuls who try learning but give up before they've ever really gotten any experience.

Those who join a prop firm and never get paid make up about 80%. That leaves 20% who ever made enough profit to get paid at all. How many of those do you think are still making a living from trading a year later?

It's about 20% of those. 100 traders x 20% x 20% = 4 traders out of 100 who make a living trading for at least a year. 4%

So if you make a living by day trading, you will be one of the few. It will be challenging, and that challenge will be a constant part of your life. If that's your thing, maybe trading is worth a shot for you.

If you're thinking it's an easy way to make a lot of money fast, then put it on autopilot and sail off into the sunset, think again.

How Do You Day Trade For a Living?

Day trading for a living fills the daydreams of countless traders around the world. It makes a worthwhile goal. And like most things worth doing, it's hard.

How do you make it happen for yourself? There are a few ways to go about it, so I'll give a brief overview here and then expand in another article.

The requirements fall into three categories: 

  • Concrete resources and skills
  • Soft skills
  • Lifestyle

Concrete Resources and Skills Needed to Day Trade for a Living:

  • Solid strategy: You need 2-5 strategies based on measurable, repeatable setups and outcomes. Too many strategies can lead to overwhelm, but it's good to have more than one type of setup. Preferably your setups complement each other and can give you edge on days with varying market temperament.
  • Enough capital: You need to trade your strategy within your risk parameters without endangering your account. At the same time, you have to withdraw profits each month and still grow your buying power. If using your own capital, you cannot risk more than you can afford to lose.
  • A computer and internet connection fast enough to handle all your software and send/receive data as quickly as possible . You need high performance and low latency. Many traders use a VPS (Virtual Private Server) for this. They connect to it remotely from their laptop or desktop (or phone, but that's not ideal).

Soft Skills of Those Who Successfully Trade For a Living:

  • Self-discipline: When you trade for a living, the stakes re high, and that puts extra pressure on a trader. It's more pressure than most imagined before they started. Emotions get magnified, losing streaks happen, and you must not waiver.

    You must take your setups, stick to your rules, stick to the plan, keep your stops, and take your targets.

    When you make a mistake you must correct it immediately, even if it means taking a loss.

    When you make an error, you must be able to step away for a bit.  Evaluate what happened, and take immediate action to prevent it from happening again.

Alex Honnold climbs death-defying routes without a rope and without fear.

Brain scan images by Dr. Jane Joseph show Honnold's Amygdala, often called the "fear center" of the brain. It doesn't "light up" like normal in response to scary or unpleasant stimuli.

  • Self-awareness: It's not about having "no emotion". There are very few people on this planet who can be completely unemotional about trading. People with that quality are as rare as Alex Honnold, the free climber. Their brains are different in the right kind of way for what they do.

    The rest of us have to self-regulate. We must know ourselves well and constantly observe our own thoughts, emotions and triggers. That way we can manage our emotions and more importantly, our reactions to those emotions.

    You need to:
    1. Spot your emotions, like fear or FOMO (Fear Of Missing Out) a mile away.
    2. Figure out what triggers each emotion.
    3. Spot those triggers immediately when they happen.
    4. Learn to manage your thoughts and actions in response.
  • Patience, or as I like to say, Paytience: Most day traders' lack of patience stems from FOMO, and I just covered how to nip that in the bud.

    But this quality is worth mentioning on its own, because it is a whole philosophy. Trading, especially trading for a living, is a marathon not a sprint.

    Professional traders become successful by stacking small wins, again and again over time. In baseball terms, it's akin to a batter who gets a few base hits every game and strikes out sometimes. He can have a long successful career without swinging for the fences.

    But it is so tempting to swing for those fences, that most blow up and never get there.

    Think of it like swimming up from the bottom of the ocean. Your desire is to get to the surface quickly to grab some fresh air (your goal of paying the bills and taking care of your family by trading). It seems harmless to swim up faster. But that seemingly harmless hurrying can injure or kill you. Your body won't adjust to the pressure in time, and your blood will kind of "blow up"...

    The same is true in trading. Setting profit goals and time expectations can kill your chances of a career in trading. Rushing to success will have the opposite of the intended effect; you will blow up.

    Give yourself time and be patient.

    That brings us to the next set of requirements...

Lifestyle Requirements to Day Trade For a Living

This looks a little different for everyone, so look at it this long can you survive without a paycheck?

  • How well can you remain focused on trading, regardless of wins or losses, or not getting paid?
  • What will happen if you go six months without any earnings? A year? Three years?
  • What if you have a good year and then a bad one? How will you prepare for that?

Trading for a living requires absolute stability, and in a sense, disaster preparedness.

You wouldn't buy a house on the beach in Florida without some preparation for hurricanes. So why would you jump into trading for a living without preparing for some storms?

Who depends on you? 

A single person with no dependent family can probably take more risk than someone with a family of four. That's me, Mr. SINK (Single Income No Kids). If that's you, you need:

1. Enough income (or savings) from something other than trading, to support yourself for however long you want to give trading a shot. You should plan for at least 18 months. Three years would be better.

Income is preferable to burning your savings. But it may take a little more work and/or positioning of assets to make that happen.

Passive income is ideal, of course. But plenty of people work a full-time or part-time job while trading, especially in the early years.

When I started my first prop firm job, I waited tables after work, and I ran cars for valet at a hotel on the weekends.

Of course it wasn't what I wanted to do with my free time. It was a means to an end. I just kept reminding myself, "One day I will be able to just trade for a living, without all this."

And that day came, and it was glorious.

Over 15 years later, I still prefer to have other income rolling in separately from trading. It removes pressure. It allows me less guilt when I want to take time off from trading, unplug completely for a vacation, or size down in difficult markets.

Having all your expenses covered gives you more peace of mind. It helps you focus on trading with discipline rather than P&L.

2. A spartan lifestyle. Luckily, you're not going into actual war. But it is a battle, and it will take focus. You want to "have all your ducks in a row" in life.

"If I had eight hours to chop down a tree, I'd spend six hours sharpening the ax." ~Abe Lincoln, who chopped down thousands of trees in addition to being an iconic president. In the same way, the results you see depend on the preparation and effort you put in behind the scenes.

  • Observe and learn. If trading was an iceberg, the profitable trader would be the small tip you see above the water. Time spent studying makes up the frozen behemoth beneath the surface.
  • As you do one thing, you do all things. Practice good habits everywhere. Eat healthily, workout, get enough sleep, limit alcohol and other toxins.
  • Keep your relationships simple and in good health. Don't try to manage an abusive/manipulative girlfriend or boyfriend while trading. Clean up that part of your life first. Take a break from people who drain your energy.

    New relationships can also be difficult while working to become a pro trader. I'm not saying you have to sacrifice that, just be aware of it.
  • Be honest with yourself. You don't have to beat yourself up constantly, and you shouldn't. But you can't delude yourself, either.
  • Be objective about your weaknesses. Otherwise, how can you correct them?
  • Stay grounded when you experience short-term success. Don't allow yourself to think you've "got it", "made it", "figured it all out". You're most dangerous to your trading after a big win.
  • Downsize your financial commitments. The less financial pressure you put on yourself, the easier this venture will be. Reducing financial obligations gives you a longer runway, less stress, and more flexibility.

    For most people, this is difficult to do, even if it sounds simple in theory. It's a big change, and you'll face a lot of internal resistance to giving up luxuries, changing habits, and so on.

    But the more you can reduce, the better your odds become.

3. Commit fully to becoming a professional trader. Unwavering, unstoppable determination.

  • Not determination to make a profit every day, we've already squashed that idea. Instead, determine to keep going when no part of you wants to keep going.
  • Don't second-guess your decision. If you decided you'd give it two years, stick to that. If you get two years in and you're not there, you have to re-evaluate. If you're making progress, it might mean finding a way to (responsibly) give yourself more time.
  • Commit to process and progress, not to profits. Trading is hard. You will face resistance. From the markets, from yourself, and from your friends. Stay on course despite the headwinds and crosswinds.
  • Commit to discipline. Sometimes, to survive and grow as a trader, you'll need to size down, or spend a day observing the market rather than trading. You need to recognize that and do it even though it feels ass-backwards. By the way, that feeling is another form of FOMO.

If you have a family, you have more to consider.

You have to apply all of the above to yourself, and then account for the people who depend on you.

This is more than a financial consideration, too. Your significant-other needs to be on board with it in every way.

Will your wife/girlfriend/husband/boyfriend be supporting you and the family financially while you make this venture? 

Even if that's not necessary, are they supportive of the other life adjustments you need to make?

Will they agree to lifestyle reductions? Will they accept them with grace, or fight them as time goes on?

You need their acceptance and their blessing for this, or it could become a source of friction later. That friction could put you in a bind, where you have to decide between giving up prematurely or damaging your family life permanently. You do not want that.

Once you have all that covered, you need to take the other steps to become a professional trader. Some people chose to go for it on their own, some chose to join a firm. Read more about proprietary trading jobs

How Does a Day Trader Get Paid?

Day traders who get paid a salary usually work for a hedge fund. And those might not always fit the definition of a day trader. Regardless, they may get paid a salary and then a performance bonus that could be many times their salary.

Prop Firm: Those who trade for a proprietary trading firm almost never get a salary. Usually they get paid a percentage of their profits. The firm may distribute those annually, quarterly, or monthly (more frequently, with some newer firms). Anywhere from 30-90% goes to the trader, and there will probably be some costs deducted after the split.

Those traders are usually either a K-1 Member/Partner, or a 1099 Independent Contractor for tax purposes. K-1 distributions will usually be short-term capital gains, or they may be a mix of ST/LT cap gains if trading futures.

A lone wolf trader has to decide how to pay himself. Most will take a regular monthly amount by auto-withdrawal. Regular IRS taxation of investments applies

How Much Do You Need to Make 100 a Day Trading?

Knowing how much capital you need to make your trading goal is important, as long as you don't get focused on having to make X each day. You have to know how much you need to risk vs how much you can afford.

Then you can determine whether it's possible to earn what you need to make a living or a supplemental income.

A couple of the ways you could make $100 in a day trading (not accounting for commissions):

Method 1: Buy 100 shares of a $100 stock, and hold it for a 1% move, and sell = 100 x $1 = $100

  • Capital requirement: $10,000. 2:1 margin* would reduce your capital deposit for one trade to $5,000
  • With individual stocks, it's possible to find many that average 1% or more in range each day.

Method 2: Buy 1 Micro E-Mini S&P 500 Futures contract (MES), and hold it for 20pts (~.5% move as of this writing), and sell. Each point in MES is worth $5, so 20 x $5 = $100

  • Capital requirement (notional value): $21,275. Margin* could lower your minimum capital deposit for one trade to as little as $100.
  • As of right now, 0.5% moves on MES occur several times a day, on average. 0.25% moves occur dozens of times per day, on average. Two caveats:
    • That doesn't mean you'll catch the move every time or at all.
    • Markets change through time. Periods of low volatility will have fewer and smaller moves to trade.

Above example uses Amp Futures margin requirements as of 1/08/2023

With stock, you would be limited by pattern day trading rules.

So if you wanted to make the above stock trade each day, you'd need at least $25,000 in your account.

Pattern Day Trading Rule

That's an SEC rule. Definition: If you make 4 or more day trades in any 5-day period, you are a pattern day trader and must deposit $25,000.

The rule involves margin trading, but because of how trade settlement works, it applies to any trading account. For example: 

  • With a $15,000 account, you make a $10,000 stock purchase and sale in one day.
  • The settlement (getting your money) from that trade, won't happen for another three days.
  • You wouldn't be able to make a second $10,000 stock purchase the next day without using margin.
  • Most brokers will allow you to make that purchase because the settlement funds are on their way. BUT this means you're technically on margin. If you do this three times within 5 days, the next one has consequences:
  • If you take a 4th trade with unsettled funds, you have to choose between holding it longer or violating the rule. If you violate the rule, you may have to deposit cash or lose your account.

So, to day trade stocks, you really do need to have $25,000 on deposit in a margin account. Otherwise, you won't be able to trade every day, forget multiple times per day.

Stock trading for $100/day: $25K minimum.

If your Reward:Risk is 1:1(also shown as 1R), you risk $100/day. With that, your $25,000 account can withstand 250 losing days in a row. But, you would need to keep depositing more to keep up that minimum balance of $25,000.

So, I would recommend starting with at least $50,000 on deposit, if your target is to make $100/day. That gives you 250 days of loss before you would fall below the pattern day-trader requirement.

With futures, there is no such thing as a pattern day trader rule or settlement rule. 

You do have to pay more attention to the risks of margin trading since you're getting a lot more leverage³.

If you stick to the $100/day target and 1R from earlier, a $25,000 account would give you 250 days of risk.

If you choose to go more aggressive, that's up to you, but I recommend leaving yourself no less than 50 days of loss. That would mean making a $5,000 deposit in this scenario.

Cushion in your account gives you the space to trade and stick to your discipline, without having to adjust due to account constraints.

I'm not saying you're going to only lose for 50 days straight, or 250 days straight. But, you will experience losing days, and even a winning strategy can experience losing streaks.

Variance of trading profits and losses

Don't fall into the trap of thinking that earning $100/day means you'll earn $100 every day and that will be your average daily profit. You will have losing days, and those will affect your ability to average $100/day in profit. For example, if your week looks like this:

  • Day 1: $100 profit
  • Day 2: $100 profit
  • Day 3 -$100 loss
  • Day4: $0 (breakeven)
  • Day 5: $100 profit

That's a pretty decent week, but you'll find you end up far away from $100 a day. 

Let's do the math: 100 + 100 - 100 + 0 +100 = $200. Divided by 5, that's $40 a day. Nowhere close to $100/day.

To make $100 a day on average, you need something more like this:

  • Day 1: $250 profit
  • Day 2: $250 profit
  • Day 3: -$250 loss
  • Day 4: $0 (breakeven)
  • Day 5: $250 profit

250 + 250- 250 + 0 + 250 = 500. Divide by 5 days and you have your $100/day average.

You have to allow for that variance - and for worse, longer-term variance.

What does this mean for your goals? How much more money will you need to deposit to be able to risk $250 each day for a long time?

If you stick to the above futures example, this would bump your cash requirement by a factor of 2.5. That's anywhere from $12,500 to $62,500, depending on how aggressive you want to be and what you'll be trading.

Where will you come up with that cash?

Will you use your own money? Save up for a few years? Join a prop firm?

Of course, this is an oversimplified example of what your P&L might look like to make $100/day trading. There are other variables to consider, but variance is the one most new traders overlook.

Is Day Trading a Gamble?

Every chance you take in life is a gamble to some degree.

Every trade you place is also a gamble. You're accepting risk in exchange for a reward. Your goal is to adopt a strategy that gives you winning odds over time, and trade it consistently.

Does that make it gambling? Not necessarily.

There are some trades that are 100% gambling. There are some traders who are degenerate gamblers. For example, people who go long or short futures right before the FOMC rate decision announcement. 

They're hoping to get lucky that the outsized move goes in their direction, but they have no edge, zero advantage. Even worse, when they lose on this trade, they tend to lose more than what they win on the winners.

Deciding to trade for a living is its own type of gamble.

  • You're starting a new business, which is always a gamble.
  • You're entering a business where most fail.
  • You're agreeing to forego income for an indefinite period of time.
  • You're probably never going to have a salary.
  • Your daily activity involves a mixture of skill, measured risk, and chance.

...Which is why I laid it on so thick in the How Do You Day Trade For a Living section. Revisit that if you're worried about whether you're going to be gambling.

Can You Make 100k a Year Day Trading?

Making 100k a year day trading (and more) is surely possible. Is it a reality for you?

That depends on how well you can meet the other requirements here. To make $100,000 dollars a year as a day trader, you need:

  • A solid strategy, measurable and repeatable. And you need to trade it with consistent execution day after day, month after month.
  • Ample capital to take risk every day while following your process through the ups and downs. From the example in the previous section, you'd X the capital.
  • Self-discipline. Nobody is a market wizard. Successful traders master their strategies, and they master themselves. They are a shrine to self-control and objectivity.
  • Self-awareness. You're not a robot. You're a meat-sack with feelings, fear, and greed. It's unlikely you'll ever achieve the emotional detachment of a robot or a computer trading the markets.

    You have to be aware of every thought, trigger, and emotion that could derail your performance during a trading session. All day, every day.
  • Patience. For example, many traders struggle to wait for a setup to materialize before they trade. They want in, now. 

    It can be even harder to not trade, when it appears that setup isn't going to come. Many traders ruin their chances of success with their inability to sit it out.
  • Financial stability, extending well into the future. Trading for a living is uncertain, so you have to be able to take that risk. Financial pressure can also hurt your ability to trade with a clear head.

    I've learned this lesson myself. At times I've spread myself to thin with other investments to the point that I felt pressure to make money. Do you know what that feeling leads to? At best, sub-optimal trading. At worst, outsized losses.
  • Life stability. "All your ducks in a row" sounds cliche, but it's valuable. A chaotic life won't leave mental space for the focus you need to succeed in trading.
  • 100% Commitment to becoming the trader who can make 100k.

    Notice how I worded that? You don't just hit some buttons and make 100k. You mold yourself into a winning trader, and then you apply the resources that allow you to make 100k.

Mr. Miyagi says, "you lack discipline."

Why Do Most Day Traders Fail?

Most traders fail for one of two big reasons (maybe both):

  1. They don't trade a winning strategy
  2. Lack of discipline

Each of these can be broken down into dozens of other sub-reasons, even if they seem unrelated.

For example, I see a lot of people complain that they blew up an account because they "didn't have enough capital". 

Hate to break it to ya, but that's not a capital problem. It's a discipline problem. What were you doing trading without enough capital in the first place? Or, why were you trading enough size to blow up the account?

A disciplined trader knows when they don't have enough capital to make their strategy work, and they don't trade. Then they find a way to get the capital they need. They either work to earn more at their job and set more aside, or they join a prop firm that provides them the capital.

If it's Obvious, it Probably Doesn't Work

How about another example: A trader who enters every time two moving averages cross. He watched a video where someone made money this way, so he thinks he has a winning strategy.

He wins some, but he loses more often than not. What the hell is going on? Why does that keep happening?

If you're that trader, this might hurt, and I'm sorry to pinch a nerve. But, if it was that easy to make money trading, everyone and their mother would be a pro trader.

The easier something is, the less edge you have. And, the more people who follow a strategy, the less edge you have. 

How does that work? Two ways:

  1. Obvious indicator setups rarely have edge even without other traders exploiting them.
  2. Smart traders will exploit you. Whether human or algorithmic, winning traders will spot trapped/greedy/fearful traders (as a group) and exploit them.
    1. Algos have mountains of data with which to spot these patterns. So, they can exploit market dynamics and human behavior thousands of times each day.

Note: I see a lot of traders call this manipulation and complain about it. Sometimes it is, sometimes it isn't. It Doesn't matter. Focus on what you can control.

Is Day Trading Better Than Gambling

Day trading is better than gambling, if you have an edge.

It is still gambling to a degree, no matter what.

There is chance. You do not control the outcome. You don't even control the inputs:

  • Behavior of other traders (especially bigger ones). Literally millions of people/entities trading with a variety of goals in mind.
  • News and economic data releases (planned or random)
  • Politicians and fed-heads flapping their jaws
  • Institutions and traders with better information than you, even if only for a few seconds

All you get to control is yourself, and the orders you place. And sometimes you even get a bad price there, like on a stop loss order in a fast-moving market.

However, with sports betting, you have even less control.

  • You don't control the lines.
  • You almost always have less information than the house.
  • You pay a spread of 5-10%, so you start out behind in every bet. You get paid less on your wins, than you lose on your losers.
  • The house has the statistical edge.
  • You have limited control over duration
  • Gambling wins and losses get awful tax treatment, way worse than any form of income from trading. More on that below.

With casino games, the house always wins. There are some lines where gamblers claim to have an edge, but...nope.

Winnings result from lucky streaks. Losses can only be potentially reduced by betting a line where the casino has a smaller edge. Blackjack, and some craps bets, for example. 

Unless you're counting cards in blackjack, you're on a lucky streak. And counting cards is all but impossible now in most casinos. 

Poker is the game most comparable to trading. You still don't control the outcome - the cards, the other player's actions. But, you control your own actions, and you can influence the actions of your opponents. A skilled poker player knows how to do both. They can make the right bets at the right times. They take specific actions to get their opponent to behave the way they want them to.

But...and it's a big but, variance has a much bigger influence on individual outcomes, especially in No-Limit poker.

The math and statistics that guide good poker players, takes massive numbers to play out. Millions of hands. You can go broke playing statistically solid poker. A run of 50,000 hands with variance outside the norm can easily happen, and that can wipe you out.

Taxation: This isn't tax advice, I'm not an accountant, not even close. But, the IRS treats gambling winnings/losses differently from trading earnings/losses. The biggest difference is the tax treatment of gambling losses. Gambling losses in any year can only be deducted against gambling winnings in that same year.

Some pro poker players try to improve their gambling taxation using an LLC, but it doesn't always work.

How Many Hours Do Day Traders Work?

Day traders work as many hours in a day as it takes to perform at their best.

At times, I've been at the desk from 3am to 7pm CT (early session open to late session close). That's a 16 hour day, eating lunch at my desk and only getting up for a quick bathroom break here and there.

I've done that for months on end. It was grueling, but it was necessary during that time.

Other times, like now, my schedule is much more normal. I'm on the desk by 7:30am CT. I'm usually done entering new trades by 11am CT and have everything closed down by 12pm. Sometimes I still have a position with stop at breakeven, but I can do other things while monitoring that.

After RTH close (retail trading hours) I finish notes for today and plan for tomorrow, which takes an hour or less. That's a 6-hour day, not bad.

What works for me may change again in the future. And what works for me may not work for you. 

It may also not be up to you.

A trader in a prop firm with a physical office can expect to be there from 7am CT to 4pm CT or later, depending on what the boss wants.

Traders of the globex session in futures (5pm CT - 8:30am CT) may be up all night. I don't personally recommend this. There is far less liquidity, and your information deficit may be much greater than it is during retail hours.

New traders need to spend more time researching, learning, and immersing themselves in the market. They may want to record their trading sessions and play them back to find things they missed or could do better, and that takes time.

Again, it all comes down to whatever it takes to be successful. How badly do you want it?

Do Some Day Traders Make Millions?

Yes. I personally know several day traders who make millions, many millions a year. My 12-month P&L has neared the million-dollar mark before as well, although my earnings are far lower than the best traders I know. I have also had big down years. Most traders have.

Reality check, though...Do not focus on this. Don't even think about it. It's not the goal, and it causes too many people to crash and burn.

The goal is to become a trader who can make money consistently. And then put yourself in the situation to grow your size.

How Much Can You Make Day Trading With 10k?

If you follow the R:R example used above, you can make about $40 a day trading with 10k. That's an average. That example uses 1R, and ideally your risk should be more like 1.5R or 2R. 

So, if you average 2:1 in your strategy over time, you could make more. That would be $80/day using 10K in capital with the same risk management.

Of course, you could risk more and make more (or lose it all). 

Even at $80/day, you could grow your capital by $400/week. That's a pretty solid rate of return if you can achieve it.

Can Day Trading Make You Rich?

Day trading has made people rich, but they are the 1% of the 1% of traders. And they all have one thing in common:

They didn't set out to get rich.

They started small, tiny even, and grew gradually over time. Eventually the slow growth compounded, and they reached a trading size where real "F-you money" was possible. 

We're talking at least 10-15 years. The truly rich traders I know have been at it for 15, 20, 30 years. Every big trade they make now is the result of decades of preparation.

Real success does not happen overnight.

Of course, there are the tail-end cases of people who made a big gamble that paid off, and they got rich overnight. And for every one of them, countless people did the same thing and lost it all.

Which Trade is Most Profitable?

The most profitable trade is one you can make every day, with a measurable positive win-rate (over 50%) and Reward:Risk ratio over 1:1

There's no golden ticket. You have to find the trade that works for you.

For some people, that's very short-term scalps. For others it's a position opened mid-morning and closed at the end of the day. For others it's a multi-day swing. Some traders do a combination of the three, or something else entirely.

Choose your duration and stick with that, at least early on.

Traders have difficulty switching between durations. Even experienced traders have a "sweet spot" and stick to it for the most part. Inexperienced traders imperil themselves trying to catch all the moves on multiple timeframes.

If you don't like holding all day, waiting through intraday volatility, you may be more inclined to shorter trades. If you like to wait for setups on bigger ranges and don't mind the ups and downs, then make that work.

I personally prefer shorter timeframes. Duration and variance are positively correlated. In other words, the more time I spend in a trade on average, the more P&L fluctuation I can expect.

One factor to consider with longer holds is the risk of a news release erasing your profits. In an era when Central Bank members go on endless public speaking tours, this is a reliable hazard.

The most profitable trade is the winning trade you can execute consistently. Don't trouble yourself with getting the most possible profit out of every situation.

Can I Become a Billionaire by Day Trading?

Becoming a billionaire by day trading is highly unlikely.

Let's consider a trader who has become rich, like we just talked about. Say he has $50,000,000 in after-tax earnings from trading in his career.

Although he could place a few big bets and possibly get to a billion, he won't do that. A trade that turns $50m into $1b is usually going to be very risky. Probably something like buying OTM (out of the money) calls for $0.50/contract hoping for a big move to sell them for $10 each.

It's a lotto ticket. The discipline that got him to $50m prevents him from making that trade with size. He probably wouldn't trade it at all. If he did, he wouldn't risk more than a few thousand on it.

However, he could take his $50m and invest it elsewhere. Potentially those other investments could turn him into a billionaire, but then that wouldn't all be from day trading. 

Why Is Day Trading So Hard?

Day trading is so hard because it tests you in countless ways.

Some regular jobs are difficult. They may call for good problem solving and math skills. Some need you to react quickly. Some have high stakes. Some require people to make decisions and act under pressure. Some entail managing emotionally difficult situations.

Very few jobs include all the above at the same time many times a day. Trading does.

Day trading is hard because It tests your problem-solving, math skills, and multi-tasking ability.

You consider charts, tick and book data, news, economic data, and many other variables. You calculate risk/reward of different actions while monitoring an ever-changing landscape.

Day trading tests your patience, stamina, and determination.

  • Some days, you do everything right and still lose money. That's just "the way the cookie crumbles".
  • Sometimes you wait for a setup all day and it never comes.
  • You sit there every day completely focused, taking in tons of information.
  • You spend all day solving problems and making high-stake decisions.
  • Some days it's mentally exhausting. For most people, it's at least a little stressful. 

Trading is hard because it requires a lot of  work. A lot of people get into trading thinking it's easy money. Once you've been at it a little while, you realize it's not. 

Trading takes countless hours of observation, studying, and learning, just to be able to turn a profit. That can take years. Most people give up well before then.

Trading is hard because it's counterintuitive. 

Trading can pit your emotions against you. Fear, greed, hope will tell you to do the right thing at the wrong time:

  • Hold when you should bail
  • Sell when you should buy
  • Add more when you should have been out a long time ago
  • Reverse a loser just as pain peaks.

Have you ever sold the bottom? Covered the top on a short? We've all done it. 

Some of us learn from that and find ways to reduce the frequency of those occurrences. Others just determine it's impossible. Which one are you?

Day Trading is hard because nobody else understands. Even when you're successful, your friends and family may still ask you when you're going to "get a real job". 

Nobody but other traders will know what you do on a daily basis, and that can be isolating. Some of them will even think you do something nefarious or illegal, because they have some picture in their head from the movies.

When you look for support in Discord or slack rooms, you may find some comradery, but you'll also be surrounded by fools leading others astray. The blind leading the blind can cost you dearly.

It's hard because just when you think you've made it, you get humbled. There is no arrival point in trading. Every day is a new day, which is a good thing.

But too many people go through the ride of making money and thinking it's easy for a time, only to get smacked in the face and lose more than they ever made. 

Most traders flunk out at that point. Or worse, they go on tilt and lose even more.

The rare trader learns from that and goes through a rebuilding period, and doesn't repeat the same mistake. They gradually ramp back up and find success again. But even then, they can't get comfy.

Traders have to stay diligent and consistent. The fall from grace can happen again. If you think you've got it all figured out and get complacent, the market will show you otherwise.

Why Do You Need 25K to Day Trade?

You need 25k to day trade stocks because the SEC chose that amount for the "Pattern Day Trader" requirement. That rule requires you to have 25k on deposit in order to place 4 or more day trades in a 5-day period. 

You may also need 25k, or more, just to trade your strategy with proper risk management, but that depends on your situation, strategy, and sizing.

What Do Traders Do All Day?

What day traders do all day depend on a few factors:

  • Which markets and instruments they trade
  • Their strategy
  • Market conditions
  • Geopolitical conditions
  • Whether they trade for themselves or on a trading desk

Traders typically trade heaviest in the first couple hours of the session. But there's more to it than that.

Pre-market routine: They'll start working before the open, getting ready for the day, doing things like:

  • Going over notes and journal entries from the previous days
  • Identifying potential setups and setting alerts
  • Reviewing news, earnings reports, data releases
  • Checking the economic calendar for events that day and noting the timing of those releases.
  • Meditating
  • Visualization
  • Reviewing rules and processes

I personally do most of the above, although not in that particular order.

The trading session: The first couple of hours of any session usually contain the most volume. That provides more liquidity, which is important for traders.

Most traders make their money during that time. Some are done after that (often the case with me). Others may size down for the late morning and afternoon, while holding positions if they expect a trend to continue.

Traders who finish trading early may then work in their trade journal, do research, or work on back-testing. Some will return to trading before the close of the session, some won't.

The afternoon provides different types of opportunities. Some traders have specific strategies going into the final hour of trade, often called "Power Hour".

Some stick around to trade during the final ten minutes, when ETFs rebalance for the day. This time brings elevated volume and volatility. It can be especially wild during quarterly rebalancing and options expiration dates.

Post-market: Some trade after-hours strategies. This is more common during especially volatile times. Traders may look for a continuation of the days move, earnings-based trades, or late news items.

However, most professional traders don't mess with the late session. Newer traders should avoid it completely due to the lower liquidity and information vacuum.

The lower liquidity in extended hours trading (pre- and post-market) makes it easier to lose more to slippage. Earnings moves are volatile and can reverse in a split second. News reactions are mostly difficult to interpret or predict. 

Is Being a Day Trader Worth It?

Whether it's worth it to you to be a day trader, is up to you.

For me, yes, it's absolutely worth it. Despite all the ups and downs, I love it.

  • I like a challenge. I need to be challenged in my work.
  • I need autonomy, and for most of my career as a trader, I've had it.
  • Trading has provided me the best years of my life financially.
  • Trading feeds my hunger for observation, learning, and knowledge.
  • It gives me great work-life balance most of the time.

Your mileage may vary 


A day trader salary is a rare thing. Trader earnings stats are opaque at best, and completely false at worst. But money shouldn't be your focus. Trading doesn't have to make you filthy rich for it to be worth it. 

Odds are, it won't. But, it could. In the meantime, if you can make it work, it's a great way to make a living.

As for me, I'll keep building my skills, getting a little better every day. I'll continue to grow my earnings potential while following my process. There's a lot of freedom in that, and that alone is priceless.

Daniel Larsen

Daniel created to help new and experienced traders level up. He began trading in 2002, and has spent over a decade trading professionally, for prop firms and clients. When he's not at a computer, you can find him on the ocean, in a canyon, or in the mountains.