The Truth about Trading for a Living

What is it like?

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Trading for a living is like any other professional endeavor. Like any other business, it requires a large amount of capital to go full time and the returns are irregular, almost like being a commissioned salesperson.

It's less about dealing with a Lamborghini in the driveway or a laptop on the beach and more about taking the risk, balancing the uncertainty and landing good trades.

Aspiring traders also need to realize that you're not just earning money and getting a daily income check, there are also losing trades losing weeks, and losing months for any serious trader.

Here are 12 truths all full-time traders must face:

  1. You're going to be your own boss so you've got to do the research, screen time and trading work necessary.

  2. Until you have a record of successful part-time trading over multiple market environments, you should never try to trade for a living.

  3. If you trade for a living not only will you have capital losses through losing streaks, but you still have quarterly capital losses related to covering your daily living expenses.

  4. You have to buy private health insurance because you don't have an employer plan. Usually, this is twice what you paid through your employer if in the U.S.

  5.  The amount of capital you need to trade is dependent on your perceptions of returns and living expenses. If you need $25,000 to survive and your hopes of annual returns are 10%, you'll need $250,000 to trade.

  6. Do not assume that trading for a living will be less difficult than your job because of the complexity and mental stress of trading to pay bills, it can be more challenging than most occupations.

  7. The smaller the daily expenses you have, the less you need to trade.

  8. Because of the complexity, you'll probably need a Certified Public Accountant (CPA) to do your income taxes, as you won't have an employer's W2.

  9. Trading for a living is much less stressful if you have minimum monthly payments, no loans, and assets worth a year of living expenses when you begin.

  10. The freedom to trade for a lifetime is worth the journey.

  11. It can be much less pressure if your spouse works as you have another source of income and access to health care and 401 K benefits.

  12. Multiple streams of revenue make it much less stressful to trade for a living. There are seven sources of income for the typical millionaire.

Trading part-time to compound capital gains is the best strategy for most people. Live trading requires a great deal of capital and limited expenses, along with a long-term record of profitable trading.

Trading for a living is very close to being an entrepreneur because you gamble a lot of capital for the chance of independence, being your own boss, and the opportunity of infinite gain.

If you go full time, keep your risk/reward ratio favorable, avoid the risk of the wreckage by making sure that the numbers work before you take the leap.


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