Can I Make $1,000 a Day by Day Trading? (2024)

Can I Make $1,000 a Day by Day Trading? (1)

dima_sidelnikov / iStock.com

Day trading — the process of buying and selling one or more stock positions within the same day — can be very lucrative. It can also be very risky. While it’s not outside the realm of possibility to earn $1,000 a day by day trading, reaching that level on a consistent basis requires several things: knowledge, discipline and a lot of cash to start with.

Here’s what you need to know.

See: 3 Things You Must Do When Your Savings Reach $50,000

What Is Day Trading?

Day trading means actively buying and selling stocks within the same day — sometimes within minutes or hours. Day trading takes advantage of the frequent fluctuations in the prices of stocks. An example of day trading would be buying shares of a company early on a day when the company is expected to announce a new product that will likely impact the stock price. If the stock jumps, the day trader would then sell those same shares they just bought, realizing a quick profit.

Margin Trading

Day trading sometimes involves borrowing money with which to trade. This can take the form of margin trading, which means that you borrow against the securities in your brokerage account to buy additional stocks. Borrowing the money to buy more investments prevents you from having to sell your investments to generate the cash to buy more. The downside is that if the investments you buy on margin don’t perform well, you will have to sell your original investments to pay off the margin balance in your account.

Here’s an example. Suppose you buy 10 shares of XYZ Corp. for $50 per share, for a total purchase price of $500. XYZ Corp introduces a revolutionary new product, and the stock price soars to $75 per share. You sell your position and take a profit of $250, or 50% of your original investment.

If you bought those XYZ shares on margin, you would pay just $25 per share, borrowing the remaining $25 per share from your broker. You would spend just $250 to make a profit that comes out to close to $250, or a return of nearly 100% on your investment.

So why doesn’t everybody buy on margin? Here’s the downside. Suppose, instead of rising to $75 per share, XYZ Corp. dropped to $25 per share. You’d lose 50% of your original investment if you had bought the stock outright. But you would lose 100% of your investment if you bought on margin. In addition, when you buy on margin, you have to pay interest to your broker, so you’d actually make a little less than 100% in the first example, but you’d lose more than 100% in the second.

Options Trading

Day traders sometimes take part in the buying and selling of options, which can include puts and calls. Options are essentially a bet on the direction a stock will move. An option gives an investor the right, but not the obligation, to buy or sell a specific security at a specific price (called the “strike price”) at a future point in time.

In order to make money buying or selling puts or calls, you need to be confident of which way the stock will move. When you buy a put, you are buying the right to sell 100 shares of a particular stock (the “underlying security”) at a specified price in the future. If you buy a put, you are betting that the share price will decrease before the put expires. Then you can purchase the stock at the then-current price and sell it according to the terms of the put, which is at a higher price.

Investing for Everyone

When you buy a call, you are buying the right to buy 100 shares of a particular stock at a specified time in the future. In this scenario, you are betting that the stock price will rise above the strike price between the time you buy the call and the time it expires, so you can buy the stock at a lower price than it is currently trading at, and immediately sell it for a profit.

Buying and selling options is not the same as day trading, since options are for the right to buy or sell at a future date. But puts and calls can be bought and sold by day traders. Depending on the movement of a stock on a given day, the value of a put or call may go up or down, which can result in gains or losses for day traders.

What Factors Affect How Much Day Traders Can Make?

The amount of money day traders can make depends on a number of factors, including how much they have to invest, how much risk they are willing to take, how knowledgeable they are and, frankly, how lucky they are.

The amount of money available to invest is a big factor. If you’re starting out your day trading career with a bankroll of a million dollars, you could potentially make a lot more than someone who’s starting out with $1,000. You would have the resources to take advantage of many more opportunities the minute they come up, which is, after all, the secret to day trading.

Investing for Everyone

How Can a Day Trader Make $1,000 a Day?

In order to make $1,000 a day by day trading, you have to have a lot of money — or margin — to start with. Rare (if not extinct) is the stock that doubles its price in a single day. Even a price increase of 10% in a single day is very uncommon.

In order to make $1,000 in a day on a stock that increases 10% in a day, you would have to invest $10,000 in that stock. If you wanted to trade on margin, you could invest a little more than $5,000 and still make $1,000 on that trade. What might be more realistic would be to attempt to find a stock that goes up 2% in a day, which would mean you would need to invest $50,000 (or $25,000 on margin, plus the interest).

Finding these kinds of investments day after day is exceedingly rare. Although it’s possible to make $1,000 (or even more) in a single day when you are day trading, sustaining that level of gain over time is very, very difficult.

What Are the Risks of Day Trading?

Remember that if you trade with enough volume and frequency to make $1,000 a day by day trading, you must also be prepared to lose $1,000 a day. Any stock you buy with the intention of selling very soon after at an increased price has an almost equal likelihood of falling in price, leaving you with a loss. So, day trading, especially at these kinds of numbers, is not for the faint of heart.

Investing for Everyone

Day trading has seen increased interest in the past few years, primarily due to the explosion of so-called “meme stocks” such as GameStop and AMC. These are stocks whose prices were manipulated by day traders who communicated with one another to inflate the prices by buying up large investments in these stocks. They drove the prices up in this way, and then quickly sold, leaving the investors who got in just a little too late holding the proverbial bag — with a portfolio full of shares they had paid a bundle for, that were now close to worthless. The meme stock trend demonstrates the risks of day trading. Most day traders are no wiser than other investors, so they are often buying and selling based on the same information everyone else has.

FAQ

  • Is $1,000 enough for day trading?
    • Yes. You can begin day trading with $1,000 or even less. You may not be able to give up your day job if you're day trading with $1,000, but you can certainly get a feel for it. It's a good idea to start small because you should only invest as much as you're willing to lose, especially in a risky venture like day trading. If you are a "pattern day trader," or someone who executes four or more day trades in a margin account within five days, you are required to have an account balance of $25,000, according to FINRA regulations.
  • How much can you realistically make as a day trader?
    • This depends on how much money you have to invest, how willing you are to take on risk, and how knowledgeable you are about the companies you'll be investing in. You also have to have some luck on your side. You could make several thousand dollars a month by day trading if you start with a good-sized investment portfolio and make good investing choices.
  • How much money do day traders with $10,000 accounts make per day on average?
    • Over time, a skilled day trader might average a 2%-3% return on their investment daily, assuming they do considerable research on potential investments. Therefore, someone with a $10,000 account might make $200-$300 per day.

Investing for Everyone

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

Can I Make $1,000 a Day by Day Trading? (2024)

FAQs

Is it possible to make $1000 a day day trading? ›

While it's theoretically possible to earn $1,000 daily through day trading or stock market investments, it's important to note that such earnings are not guaranteed, and they come with significant risks. Day trading and stock market investments can be highly volatile, and there are no guarantees of profits.

How much money can you realistically make day trading? ›

Some traders aim to earn 1%-2.5% of their account balance daily. It should be noted that higher risks usually accompany higher returns and that traders who risk more have a higher potential to blow out their trading accounts. Many profitable traders attest to the importance of proper risk management.

Is it hard to make $100 a day trading? ›

You're really probably going to need closer to 4,000 or $5,000 in order to make that $100 a day consistently. And ultimately it's going to be a couple of trades a week where you total $500 a week, so it's going to take a little bit more work.

How much money do day traders with $10000 accounts make per day on average? ›

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

Can I live off day trading? ›

It is possible, but it is going to take a lot of time and discipline to build a small account into something that can produce a living. If you want to make some money on the side, you'll still need the same dedication, putting in many months to refine a method and overcoming sabotaging tendencies.

Can you make $200 a day day trading? ›

A common approach for new day traders is to start with a goal of $200 per day and work up to $800-$1000 over time. Small winners are better than home runs because it forces you to stay on your plan and use discipline. Sure, you'll hit a big winner every now and then, but consistency is the real key to day trading.

Is day trading really worth it? ›

Day trading is a high-risk, high-reward strategy. If your decisions don't work out, you can lose money much more quickly than a regular investor, especially if you use leverage. A study of 1,600 day traders over the course of two years found that 97% of individuals who day traded for more than 300 days lost money.

What kind of trading makes the most money? ›

The defining feature of day trading is that traders do not hold positions overnight; instead, they seek to profit from short-term price movements occurring during the trading session.It can be considered one of the most profitable trading methods available to investors.

Why do you need $25,000 to day trade? ›

Why Do I Have to Maintain Minimum Equity of $25,000? Day trading can be extremely risky—both for the day trader and for the brokerage firm that clears the day trader's transactions. Even if you end the day with no open positions, the trades you made while day trading most likely have not yet settled.

Why is day trading so hard? ›

Moreover, emotional control is crucial; day traders must avoid common pitfalls like overtrading or letting emotions drive their decisions. The steep learning curve, combined with the need for discipline, consistent strategy, and the ability to handle losses, makes day trading a hard thing to succeed at.

How do most day traders make money? ›

A day trader tries to make money one of two ways. If a day trader sees that a stock is moving higher or thinks that it might go higher that day, they'll buy the stock and then sell it once its value goes up. But if the stock's value drops, then they'll lose money when they sell it. Pretty straightforward!

Can a day trader be a millionaire? ›

While it's possible to become a millionaire through day trading, it's not likely. Most traders end up losing money in the long run. A small number of traders, however, are able to consistently make money and achieve success.

How many hours do day traders work? ›

Most independent day traders have short days, working two to five hours per day. Often they will practice making simulated trades for several months before beginning to make live trades. They track their successes and failures versus the market, aiming to learn by experience.

How fast can you make money with day trading? ›

Many people put in multiple years before breaking into consistent (or even any) profitability. It takes at least a year to consistently make money from day trading or swing trading, if working at it full-time or with a mentor, and only working one (maybe two) strategies. Six months is the quickest; most take longer.

Can you day trade with $2,000 dollars? ›

The stock market is a heavily regulated space, and this is understandable. It's a high-risk market where traders can watch as all their money burns down to the last dollar. One of the most common requirements for trading the stock market as a day trader is the $25,000 rule.

Can you be a millionaire day trading? ›

While it's possible to become a millionaire through day trading, it's not likely. Most traders end up losing money in the long run. A small number of traders, however, are able to consistently make money and achieve success.

Can you day trade with $5,000 dollars? ›

A day trade is when you purchase or short a security and then sell or cover the same security in the same day. Essentially, if you have a $5,000 account, you can only make three-day trades in any rolling five-day period. Once your account value is above $25,000, the restriction no longer applies to you.

How much money do you need to live off day trading? ›

To run a real day trading system every day of the week it's more practical to have at least $30,000 in your day trading account to be able to continue to day trade through drawdowns or losing streaks that would have taken your account under $25,000 if that was your starting point.

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Sen. Ignacio Ratke

Last Updated:

Views: 5631

Rating: 4.6 / 5 (76 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Sen. Ignacio Ratke

Birthday: 1999-05-27

Address: Apt. 171 8116 Bailey Via, Roberthaven, GA 58289

Phone: +2585395768220

Job: Lead Liaison

Hobby: Lockpicking, LARPing, Lego building, Lapidary, Macrame, Book restoration, Bodybuilding

Introduction: My name is Sen. Ignacio Ratke, I am a adventurous, zealous, outstanding, agreeable, precious, excited, gifted person who loves writing and wants to share my knowledge and understanding with you.