Is day trading considered a job? A job is defined as an activity, usually regular and often done in exchange for a payment. As a day trader, you are doing an activity; buying and selling stocks. Taxes are defined as payments of money to the government that provide public goods and services for the community. Day traders pay short-term capital gains of 28% on any profits. Independent contractors don’t get taxes withdrawn automatically from the work they complete, but they are still required to pay taxes. So, it’s safe to say as a day trader you earn money with successful trades and pay taxes; it’s a job.
Day trading can become a full-time job opportunity, a part-time opportunity, or just a way to generate extra income. The perks that this job gives are that you can be your own boss and work wherever you want to. Like every conventional job, you still have to put in hours, train, and prepare to be successful. You can make enough money to pay your bills and some money left over to have in case you need it in the long run. Day trading can truly change your life and provide a lot more money than an ordinary job would if done correctly.
According to the Internal Revenue Service (IRS), all income from trading is considered passive income. Passive income is defined as earnings from a source other than the employer or contractor; also known as another job. Unless a person can be eligible for trader status; they will be treated like any other tax filing individual. For tax purposes, the only advantage of being considered a passive trader is that the income resulting from trading is not subject to additional self-employment taxes. After that, deductions are the same as what is normally given to W-2 wage earners. The amounts of most deductions are limited to a percentage of adjusted gross income. All the expenses needed to trade are not qualified as tax deductions.
Putting in Hours
Unlike most conventional jobs where you put in 30-40 hours a week. Whether you want to put in 2,5,10 or 20 hours a week is all up to you. You are your own boss, think of day trading as self-employment. You decide how much time you want to spend a day trading. Furthermore, you don’t have to worry about reporting to anyone or working on a team. Everything, from the trades you take to your earned income; is in your hands. Some professional day traders work as little as two hours a day. Another great thing is, that you don’t have to give up your day job to be a day trader. You can still work your job and keep thinkorswim open and take advantage of new trading opportunities that may appear.
Unlike other positions where you get constantly overwhelmed with tasks; take the time to create a good work-life balance for yourself. Remember, you are responsible for your own learning and always keeping up to date. You will be a new trader, so allow yourself a learning curve period. At the beginning of your day, give yourself time to set up your workspace and label your support and resistance levels before entering trades. At the end of the day, take time to go over your trades; doing this will only help you in the long run.
At any other point during your work day or work week, put in some time to review and use demand to thinkorswim to practice. Practicing is the way to get proficient in a new skill or behavior, and you can always learn something new. Be courageous and don’t be afraid to make mistakes. Research has shown that optimal learning often requires making errors. We have all heard the phrase practice makes perfect; so, make it a point to strive to for continual progress. Like at any job, take pride in your work and set yourself up for success.
Just like any ordinary job, day trading has rules as well that you must follow to be successful. From things like how many times you can trade in a five-day period if your account is less than $25,000; which the answer is three. Just like any ordinary job, day trading has rules as well that you must follow to be successful. From things like how many times you can trade in a five-day period if your account is less than $25,000; which the answer is three. According to FIRNA; the pattern day trader rule is if you execute four or more “day trades” within five business days, you are considered a pattern day trader. The market opens at 9:30 a.m. EST and closes at 4:0o p.m. EST.
A few quick tips are to keep your emotions in check, or it could be your downfall. Not to focus on money; focus on your strategy. You will lose money; know how to deal with losses and not let it consume you. Some new traders never realize the importance of rules until they blow up their accounts. Follow this basic rule; limit your loss and let the profit grow. No trader can predict how much money they will make, but you can predict how much to risk. Prevent the loss of your capital by having a stop loss and sometimes staying out of the market. Just sit back, watch the chart and try and learn something new. By doing this, you are reducing risk and protecting your capital.
Summary: Is Day Trading Considered a Job?
Some key takeaway is that just like any job it requires training, putting in the time to work on your craft, and paying taxes. It is also imperative that you control your emotions and don’t let them control you. It is important to use a well-tested strategy and not to stray from the rules. Day trading is a job, instead of earning from your hours, you earn from your results. There is an old saying, anything worth doing is worth doing it well. Your work is a manifestation of you. It speaks to your attention to detail; the question then lies in how much of a successful day trader you want to be.
Whether you’re new to day trading or an experienced trader, the basic strategies and skills you need to profit from options trading should be continually developed. For most day traders, it can be exciting and scary that no day will be exactly the same. The more you practice, the higher your odds of having a steady success rate with your trades. The Maurice Kenny Trading Program is a great way to enhance your new line of work as a day trader. Where I can teach you to be profitable for at least 80% if not more of your trades.
To Learn More
Maurice Kenny has helped over 600 people become financially free through one-on-one coaching, mentorship, and options trading strategy. Many of these new traders are now full-time traders, and they all started by watching his 1-hr webinar.
Feel free to check out other FREE educational resources to help guide you as you begin your new journey to financial freedom.
Also, download a (FREE E-BOOK) by Maurice Kenny, “DAY TRADE LIKE A MILLIONAIRE.”