Three Types Of Freelance Day Traders (And Why You Should Become One)
The self-employment world continues to grow. People are realizing that they can wave goodbye to the rat race and make an independent income themselves, without having to report to a boss.
One of the fastest growing independent careers is that of freelance day traders. These people watch stocks, currencies and cryptos all day, looking for opportunities to benefit from rapid changes in price. They’re not long-haul investors. Instead, they measure their success (or failure) by the amount of money that they make each day.
In this article, we discuss three types of freelance day trading jobs you might want to consider. Read more below.
Perhaps the most common option is to become a day trader. These individuals buy and sell on popular exchanges when they open during daytime hours (hence the name).
Most day traders specialize in particular areas. For instance, a day trader might focus on a single stock or company, trying to predict where the price will go next, based on information about the firm and trading volume. Other traders might zero in on a single commodity. For instance, many freelancers have made a lot of money in the oil, gold and lumber markets.
Day traders appear to have a simplistic job, but a lot of analysis goes into what they do. Not only do they need to consider fresh information arriving all the time, but also how their peers and other investors will interpret that information. It’s by no means an easy game.
Binary Options Traders
Some traders like the purity and simplicity of binary options trading. The idea here is simple: the trader gets to profit or loss based off a simple yes/no proposition.
For instance, if the trader believes that the price of oil will go above $75 a barrel today, they may be able to sign an option in the morning that will deliver a payout later on. However, they may not be able to redeem the option if it doesn’t and may have to sell it at a loss.
Penny Stock Trader
Penny stocks are stocks of companies that appear to have little to no value. These are often firms in distress that have laid off employees or gone into administration.
Penny stocks are a trader’s dream come true. That’s because they tend to be highly volatile. Retail investors like them because they seem low risk. They believe that the only way is up and that they will eventually gain in value later on. However, that rarely happens, and most investors lose money. Traders, therefore, can step in and take short positions on these stocks, making money on the way down, not just the way up.
If you’re a freelancer and new to trading, dabbling in penny stocks is also a good way to get started without risking a lot of capital. Most people begin with just $1,500 and consider a daily profit of $50 to be quite good.
As your capital grows, you’ll be able to risk more. Traders, generally, don’t like putting more than 1 to 2 percent of their net worth on the line per 24-hour period.