Many people seem to overestimate what trading is capable of. While a lot of high-profile traders are worth millions, it’s not as simple as most people think and it involves a lot of study, experience, and knowledge of the markets. It also requires something that a lot of people are afraid of; failure. So in this post, we’re going to take a look at the reality of trading as a main career choice.
Trading requires you to be diligent
Trading for a living means that you need to be incredibly focused at all times. You have to be disciplined, you need to embrace failures and you need to trade on a stock market on a regular basis. It’s incredibly taxing on the mind to make trading a living, especially since it can feel like gambling when you’re a beginner. However, once you break through the initial wall and focus on stable trading strategies that can slowly build your wealth, you’ll find that it can be a rather comfortable way to make a living from home.
You need to set aside income
Most traders suggest that you set aside some income that you use for trading. Roughly six months to a year’s worth of your salary is required for you to make substantial gains that are capable of helping you make a living. When trading, it’s important to only use this chunk of money so that you don’t burn into your personal finances and savings.
You need to set aside your emotions
One of the trickiest things about trading is setting aside your emotions. It’s vital that you don’t let your emotions get the best of you or else trading can easily turn into gambling. Once you reach this point, it’s going to be incredibly difficult to break out of your bad streak and you might end up losing all of your initial investment. In order to break past this, you have to trade consistently until you can separate your decisions from your emotions. Trading strategies should be based on statistics, experience and your knowledge. Having a hunch and acting on it is fine, but if you have an emotional attachment to a brand and want to trade, then it’s important to find ways to separate yourself from it.
It’s not going to help your work-life balance
At least, not yet. Many people consider trading as a good way to establish a better work life-balance. They assume that trading doesn’t take much time and that you can spend more of your day with friends and family members. However, this is a poor assumption as trading is something you can do at virtually any time. This means you’ll end up checking stock values while you’re at lunch with your friends, or you might go to bed with one eye on your phone. While it can help stabilize your work-life balance, it’s not going to happen immediately and it will take a long time before you have more freedom as a trader.