For many individuals today seeking financial freedom and flexibility with their schedule, the idea of trading for a living seems only like a dream. The good news is, trading for a living is a possibility if you are willing to study the market, put in the work and handle some of the realities of trading for a living. It is important to be aware of some of these realities before you attempt to enter into a life as a full-time trader. Traders are a unique group of individuals, and while trading for a living can provide the financial freedom that many people strive for, it can also have its challenges, here are some of the realities to expect when trading for a living.
1.You Must Know Where You Stand Every Single Day
If you want to start trading full time, then you need to be willing to commit to a real full time schedule. This means knowing where you are with your trades every day and where the US market is every day. Market conditions are always changing so you need to be constantly paying attention to what is going on. This is tedious work but it is a good use of your time, you never want to just expect that a certain stock is going to continue to perform in the way it has been in the past.
2.You Will Fail
If you meet a trader who says they have never made a mistake, failed or lost money, chances are they are lying to you. You will fail. You will make a mistake. You will lose money, no matter how hard you work and it will come as a big blow to your ego, particularly if you are using trading as your main source of income. You need to be prepared to handle this reality, take it in stride, learn from your mistakes and move on.
3.You Have to Do the Work and the Math
Before you make a trade, you need to really understand the probabilities of every move you make. This means doing the math and taking the time to work out the probabilities on your own. It is time consuming, and it is not the fast-paced, spur of the moment, adrenaline rushed decision that many people envision, but it is a smart way to make smart choices.
4.You Have to Become Disciplined
Trading requires discipline. This means the discipline to sit down every day and do the work, to put in the time and research and to walk away from tempting emotionally-driven decisions. It also means having the discipline to know when to walk away and cut your losses.
5.You Won't Make Money Right Away
You are not going to make enough money to live on full time in your first day of trading, so you must be willing to accept the reality that this process is a slow one. It will take time for you to build up the type of money you need to really do this full time, so be realistic about when you can transition your trading to a career.
6.You Will Not Have the Free Time You Imagined
There are many people today who state the main reason that they want to start trading full time, is because they will have more free time. While you may be able to be more flexible with your schedule, you will likely not have all of the free time you imagined. Trading full time takes hours and hours of work every day and chances are you will be busier and have less free time than you did at your 9-5, particularly at first.
While trading for a living has its challenges and may not be the most traditional approach to earning a living, it is a great way for the right individuals to find the financial success they have always wanted to have.