Capitalizing on his economics degree from UConn, Dan Sapienza of Suffield, CT, earns his living as an independent day trader, buying, trading, and selling stocks for profit throughout each business day. Unlike many such traders, Dan Sapienza trades entirely with his own money, rather than borrowed capital, which allows him the freedom to take greater risks and the patience to invest in long-term trades that many others in his business could not afford.
Becoming an independent stock trader may be easy, but roughly 90 percent of those who attempt it end up losing money and failing. Many amateurs are tempted by the great success stories: the boom of Internet stocks in the late 1990s that brought tremendous profits with little effort, the former gambler who now trades over $1 million daily, or the high school student who turned $10,000 saved from part-time work into $300,000 by trading on his iPhone. While the first case was largely a matter of lucky timing for many, consistently successful traders will insist that their work requires constant research and study, the honing of skill, and the willingness to take the risks necessary to put it all into practice and accept failure as an object lesson.
At the very least, most day traders require an initial investment in a high-speed Internet connection to track all the necessary information as closely to real time as possible. Aside from this vigilance, a successful day trader needs a thorough understanding of the intersection between economics and statistics in order to have the best odds of correctly predicting changes. For many who operate entirely on a day-to-day basis, elaborate software must be put into place to give the trader predetermined notifications and alerts to particular movements in the market, as they cannot afford anything other than the smallest losses. Regardless of strategy, personal discipline is essential; a short-term trader can’t afford to stubbornly hold on to a failing stock in the hopes of a sudden resurgence, while a long-term trader can’t afford to panic at a temporary downturn and sell at a loss.
