THE 6 THINGS TRADERS NEED TO MAKE A LIVING
By Galen Woods in Trading Articles on 5 March 2015
Read more about Trader Development, Trading Psychology
Read more about Trader Development, Trading Psychology
It’s easy to become a trader. Just open a brokerage account.
Click buy. Click sell. That’s a trade, and you are a trader. But can you make a
living from it? Or is it just a convenient home casino?
Most traders want to make a living by trading. Yet, most of
them cannot do it. This is because it is hard, and there are many things
you need to trade for a living.
Here are 6 of the most important.
#1:
PASSION FOR TRADING
You must enjoy trading and love the challenge it presents.
Trading involves losses, failures, and desperation. You will
experience them in your trading career. Without a passion for trading, it
is impossible to weather such emotional turmoil.
When the going gets tough, it is what you really want that keeps
you going. Do
you want it enough to stay gritty?
#2:
TRADING EDGE
A trading edge is what you use to find trades with positive
expectancy. Out of passion, you are willing to sacrifice your time and
effort for trading. But without a trading edge, you cannot expect to trade
for a living.
Finding a trading edge is difficult. This is because trading
edges are fleeting, and hard to confirm. You will spend half the time searching
for a trading edge. Then, you will spend the other half of the time in
self-doubt.
Use technical analysis, fundamental analysis, or a mix of both.
The key is to find a trading edge that gels with you.
#3:
BUSINESS MINDSET
Many new traders see trading as a simple action or an ongoing
activity. But if you want to make a living, you have to treat trading as a
business.
It means researching, evaluating, and deciding on your trading
options. It means having a trading plan. It means hard work and serious
decisions.
#4:
DISCIPLINE
You can have the best trading system and trading plan. But
they are useless if you don’t follow them.
You will be tempted to flout your trading rules, take on more
risk, and give in to your emotions. At times, you will go with the irrational
flow. And this is how traders go bankrupt.
The slightest lapse in discipline is dangerous and can ruin a
trader. To trade for a living, you need ironclad discipline .
#5:
INDEPENDENT THINKING
Trading is an independent activity.You are responsible for all your decisions. Sure, you can follow
your mentor blindly, blame your broker, and lament your losses. But at the end of the day, you are responsible. This
is because you are free to choose and decide every aspect of your trading.
You do not have a boss to confirm what you are doing is right.
You do not have clients to offer you immediate feedback. The trading forums
have 1001 diverging views on 999 trading strategies that might or might not
work. In the face of information overload, you are free to choose your
trading path. If you are not fiercely independent, you cannot expect to trade
for a living.
#6:
FINANCIAL SECURITY
You want to trade for a living. The irony is that if you need
to make a living by trading, you cannot do it. If you want to make a living by trading, but do not need
to do it, your chance at succeeding is much higher. Reduce your financial pressure to succeed in trading. If you
must make money, you will feel frustrated when there’s no trading opportunity.
This frustration will cause you to over-trade and
deplete your trading capital. To maximize your chances of trading for a living, you need to
save up. Establish your financial security through other means before trying to
trade for a living. Knowing that you don’t need your trading profits to pay the
bills is a huge plus. It helps to focus your attention on trading well in the
long run.
