Day trading is a way to gain financial independence. When you become a day trader, you make the move towards profitability, you can create your own career without the help of a regular company. Corporate culture can be suffocating for many individuals that are stuck in a boring, gray-tinted cube farm. The rows and rows of square cells, festooned with baby pictures and Dilbert cartoons can seem like a prison to those that are disinclined to conformity. But you can obtain benefits like 40K plans, health insurance and the like. If you go the day trading route, you can make up for some of those corporate benefits with a real traditional IRA.
A traditional IRA can be a tax beneficial way for day traders to save their money. You can make all the profits that you like in your daily trading exploits, but you have to have a place to park your extra income that is safe. That is where a traditional IRA comes in. And the contributions that you make can be deducted from your taxes. That is a great benefit to day traders that are always looking for ways to kill your tax burden. When you are an independent contractor, you want to figure out any way that you can to get down your tax bill.
A day trader needs to learn proper strategies in order to become profitable enough to being contributing to a traditional IRA. You need to learn momentum day trading strategies, how to read advanced charts and how to use stock scanners to find the hottest stocks every day. A day trader is a hunter of volatility. That means that you are constantly on the lookout for stocks that are ready to make big gains on a particular day. And you have to find them before they make those big gains. That is how you lock in the profits.
Risk management is an important part of being a day trader, which is why it makes sense to avoid risk by opening a traditional IRA. Every time you make a trade, you want to have a plan in place. Preparation is the ultimate way to be profitable. When you make a trade, you need to have an idea of what you expect it to do, based off earlier research and a mastery of current technical trends. If the trade starts to go south, you need to abandon it right away. You need to be able to cut bait without thinking.
Before you actually start day trading and opening a traditional IRA, you want to spend time paper trading. That is a situation where you trade virtual currency in a simulated trading environment. That is the best way to learn how to trade without risking any real money. You can make mistakes and learn how to trade without risking real cash. That is really truly how you learn the art and science of risk management. And once you get to that point of profitability in a paper trading situation, you can make the move to the regular market and a traditional IRA.