Trading For A Living Pipe Dream Or Realistic Alternative?}

Trading For A Living – Pipe Dream Or Realistic Alternative?

by

Peter Skotnicky

To be able to do trading for a living is a dream of countless part-time traders. One only has to look at the numerous seminars, training sessions and trading bush camps these traders attend to understand how intensely they want to do this. The lifestyle of a full-time trader looks so perfect: you never have to leave your desk, never have to face an angry boss. You can take leave whenever you want. You determine your own salary.

There are a few things you will need before you can make this a reality. Without these trading full-time will always remain nothing but a distant dream.

To be successful as a full-time trader you have to understand something: that you are not really trading against the market. Neither are you trading against other traders. You are trading against yourself. The way you trade is heavily influenced by your approach to risk taking – and that will in turn determine your success or failure as a trader.

You can do all the trading courses, read all the manuals and have all the latest software, but if you are unable to control yourself, the market will control you. If you tend to stay in losing trades forever, hoping they will eventually around, you will never become a successful trader.

Likewise, if you don’t have the discipline to leave a winning trade alone and “let it ride”, if you sell it the moment it becomes profitable, this weakness will eventually destroy your trading career. If you do this every single time: hang on to a losing trade and sell a winning trade before it matures, you will end up with a string of large losses and a couple of small wins. And you will make a net loss – guaranteed.

Another decision you have to make is which time frame you want to trade in. Do you want to be a day trader, do swing trading or be a long term trader? This will also largely be determined by your personality type and your approach to risk. Day trading is much more risky, but if you like the adrenalin rush and you can stand numerous small losses while you wait for one big win, it should work for you.

You also need to make a decision about the market instruments you want to trade in: currencies, shares or commodities. Each one of the above require a slightly different approach and different skills and tools. Share trading necessitates that you get familiar with the companies involved. Study their financial statements and their competitors. With commodity trading and currency trading you need to get familiar with the factors that influence the prices of that commodity or currency.

Of course you will also need the right set of tools. The first and most important tool is yourself. Be prepared to spend some money in getting yourself equipped to do the job. You have to be able to read financial statements and interpret charts. You have to know what technical indicators are and how to use them to try and predict market movements.

You also need to sign up with a service that can provide you with the latest market prices for the instruments you have decided to trade in. You get free services that supply delayed prices – that is fine if you do swing trading, but if you are doing day trading you absolutely need live prices.

Trading for a living therefore does not have to remain a dream forever. Start with yourself. Get the necessary training, then learn to control yourself. Finally get the right tools and you are all set to become a successful full-time trader.

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Trading For A Living – Pipe Dream Or Realistic Alternative?

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