Day trading and investing are both viable forms of securities trading. However, many differences make each method unique and worth doing—often, people choose to do both.
Which market you trade:
Each market has different advantages. Stocks are generally the most capital-intensive asset class, so if you trade another asset class
How much time you put into your trading education:
To create consistent day trading income—where you have a solid trading plan and are able to implement it—will likely take a year or more if you dedicate yourself to it full-time. If you only practice part-time, it may take a number of years to develop real consistency
How many hours do day traders work:
Your total time commitment should be about 15 hours per week on the low end and up to 40 hours per week on the high end (if you're trading most of the day). In the U.S. market, the most active time for stocks, currencies, and futures is near the market's opening time each morning.
How much do you need to day trade:
For day traders in the U.S., the legal minimum balance required to day trade stocks is $25,000. If the balance drops below that level, day trading isn't allowed until a deposit is made bringing the balance above $25,000.
Difference Between Day Trading and Investing:
| Day Trading | Investing | |
|---|---|---|
| Buying | Buy a stock with the intent to sell it at a specific price | Buy a stock with the intent to hold it and gain value |
| Selling | Sell a stock with the intent to buy it back at a specific price | Sell a stock after a long period for a gain |
| Time Horizon | One trading day | More than one year |
| Capital Required | $25,000 minimum for stocks, none for Forex and futures | Varies from a few hundred to hundreds of thousands of dollars |
| Costs | Based on the number and size of the transactions | Based on management fees and capital gains |
