Lots of people make money day trading for a living; it’s not the easiest career in the world, but it has remarkably few barriers to entry; anyone who can set up a brokerage account on the Internet can get into day trading for a living. However, being successful at it means that you need to have the right set of tools, both mental and computational, to thrive in a world where you’ll be making decisions that swing tens of thousands of dollars of stocks, on incomplete information.

Lots of internet companies are trying to sell ‘day trading secrets’ – some sort of top secret system that’s been vetted by “The top financial advisors”, or some sort of story about how they have a system that, until now, had been in the hands of the “top financial banks”.

Let’s disabuse this – if you want to get to financial independence through day trading, there are no secrets. It’s hard work, a lot of research, and when it all comes down to it, being able to make calls off of the amalgam of your knowledge of the market as a whole, the segment you’re investing in, and your gut.

So, what’s the ‘key’ to day trading for a living? First and foremost, it’s understanding how the market works. The stock market is an aggregate of millions of buy and sell decisions made every day. The market trends are based off of hundreds of thousands of trades, most of which are done conservatively.

For day trading to work, you have to focus on market volatility – how much the market likely to change over the course of a day’s worth of trades; this is an index that’s published every morning, and lets you decide if you’re going to be buying low and selling high, or using short selling techniques to make your income.

To make money while day trading for a living, you have to make use of some fairly advanced techniques, such as using leverage (borrowing money with the stock you purchased as collateral) to magnify the size of your trades. Leverage is a great way to make a lot of money quickly; buying stocks on credit, then selling them after they’ve risen and paying off the loan is the key here.

Overleveraging is a term you hear in the financial news, and it’s something you should be aware of and concerned about; leverage is also a great way to lose money if you’re not careful.

Fortunately, a lot of what makes day trading happen is subject to automation. For example, you can have computer programs that will pull, sort, sift and display data for you; these analytical tools went from being the secret weapons of top traders to something everyday investors used starting in the 1990s, when desktop computers got powerful enough to run them.

Now, there’s a burgeoning market in prepackaged analytical tools to choose from, and it’s possible to literally get lost in the amount of data that can be made available to you to do day trading for a living.

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