Forex Trading for a Living
Trading for a Living – The Key Differences Between You and Wall Street
The life of a trader can be very rewarding, but it is not something that comes easily. Hollywood likes to glamorize Wall Street with images of busy trading floors, exotic cars, and deceptive games of cat and mouse. Frankly, this may not be far from the truth, but for those of us who are trading from our laptops, life is much different.
If you are trading from home, the execution of your trades depends greatly on your online broker. Speed and accuracy are critical and this is especially important if you decide to trade the news. The second biggest difference is the amount of capital you are using. Most folks start out with a few thousands dollars and grow their account from there. Even if you do have a pile of money to play with, you will likely want to start off with a small and safe amount. These two factors may be obvious, but they play a major role in why most new traders fail.
As an aspiring trader with a limited balance, you really can’t throw money in 20 different directions. You need to identify a handful of good stocks, and then decide which ones you are going to trade. Those stocks need to be within a certain price range to allow for a good return on your money. You aren’t going to be making a very good living trading $40 stocks and earning 5-15% on a good trade. At the same time, you aren’t going to be in business for long if you only trade the volatile 5 cent stocks. A good balance must be struck between risk and reward.
But trading for a living involves much more than just buying and selling the right stocks. Trading with an investor’s money is one thing. Trading with your own money is another. And trading with your daughter’s college fund is something entirely different. Mental strength, a desire to learn, and money management are all very important traits that every home based trader should posses. When you take these traits seriously and implement them in earnest, you are no longer gambling, you are running a successful business.
Businesses, just like good traders, develop systems, policies, and contingency plans to deal with the changes in the marketplace. And just like a marketplace, you will experience ups and you will experience downs. The secret is developing a very stable system to deal with those gains and losses as effectively as possible. The biggest mistake I see new traders make, is running into the trading world with no plan and no ‘business’ mindset.
If you are considering a career as a trader, you must clear your mind of what you think you know, and focus on learning material specific to home based trading. If you do this, you will be far ahead of most new traders and can make great money trading for a living!