Is it possible to earn a living from Trading?

Many people today are taking up trading as a hobby, with the aim of making their money grow faster, achieving a higher return than they would from their savings account. But the question we all ask ourselves is: “Can you really make a living from trading as your only source of income?”. While in the 1990s access to the stock market was sometimes difficult, the practice has now become democratised through the availability of the internet. Since the year 2000, it has become possible to trade online from home. This development opened up the possibility of working as a self-employed trader. Many people now work as independent traders and are able to support themselves from their earnings. Becoming a trader, however, is not as simple as it may sound. If you’re thinking of taking this step and becoming a self-employed, online trader, read on to find out more about what you need to do to set yourself up.

How much capital do you need to start out with to earn a living from trading?

This will depend on your personal needs and situation: The amount of earnings an individual needs is very subjective. A millionaire doesn’t have the same requirements as a civil servant. Let’s take the example of a person targeting an income of $3000 per month. An income of this level would require a performance rate of 6% on a starting capital of $50,000, which would correspond to a profit of 0.3% per day. $50,000 would be a reasonable amount of capital to make a living from trading at a 6% return rate. In our view, a substantial capital, somewhere between 20,000 and 50,000 dollars, is necessary to earn a living from trading, depending on your needs and requirements.

What do you need to do to set yourself up as an independent trader?

Get proper training:

Although trading tools (technical indicators) are accessible to all traders of all levels of experience, it goes without saying that a beginner will not achieve the same level of performance as an experienced trader. The difference between the two is that the experienced trader has had time to train and gain experience, both of which are essential for making a living trading in the long term. What training should you start with? If you are new to trading, start by following a course that covers the basics of trading.

In our STARTER training program we cover the following essential areas:
– Developing a good understanding of the stock markets.
– How to set up a proper trading environment.
– Implementing an effective capital management plan.
– The importance of effective trade management.

You will quickly understand that to be profitable in a given sector, it is preferable to specialise by choosing to invest either in the short term (SCALPING or DAY TRADING) with our DAYTRADER PRO training strategy, or in the long term (SWING TRADING) with our SWINGTRADER PRO training strategy.

You will also discover that your mindset, your capacity to manage stress and emotions, is responsible for 80% of your trading results.

The skills you need to earn a living from Trading

Master the market

A solid foundation in investment and the financial markets is essential for successful trading. Every trader needs to master the trading charts, and understand the behaviour of investors to be able to invest profitably in the financial markets.

Mastering technical analysis

This is the study of market evolution and the various technical indicators used to evaluate markets, mainly through the use of stock market charts, with the aim of predicting future trends. In the DAYTRADER PRO training strategy, we explain the importance of using a trading strategy with the Ichimoku Kinko Hyo indicator, which stands for “a glance at a chart in equilibrium”, coupled with the Pivot Points indicator.

Mastering a Money Management plan

We definitely advise against putting all your eggs in one basket. Always diversify your potential earnings.
Set clear rules for managing the risk of your capital. We also recommend that you avoid investing more than 2% of your capital per position. This approach avoids incurring excessive losses, which is both demoralising and difficult to correct afterwards.
It is also important to set another rule that tells you when to stop trading. If you make three winning or losing trades in a row, we recommend that you close your trading platform.
When we make several winning trades in a row, our minds play tricks with us, luring us into another position under the belief that this is our “LUCKY DAY”, unfortunately, in trading, there is no such thing as luck.
And conversely, when we make a loss, we often want to get back into the game to recover our losses, as it is not easy to accept losses in trading.

Manage your losses

To earn a living from trading it is very important to manage your losses effectively to ensure that your gains outweigh your losses. Traders use a simple tool called the STOP LOSS to do this. This tool enables investors to protect their capital as their losses are limited to a maximum percentage of capital that they define prior to entering a position.
Setting a maximum loss per day in percentage or in dollars is essential to know when to stop trading.
It is fundamental that you learn to accept your losses when trading the stock market and stick to the trading plan that you have set.

Managing stress

Knowing how to manage stress:
Investing in the financial markets is fun, but it can also be very stressful. Stress is the main enemy of profitability in trading, as it can lead you to make hasty and poorly thought-out decisions, and can cause you to act irrationally.

Method to limit stress:
– Stick to your trading plan rigorously.
– Only enter a position on the basis of strong signals. A lot of stress arises when we try to induce trades. The market always has the last word.
– Accept your losses and absorb them. Never let your losses run too long – this will affect your mindset and you will feel increasingly frustrated.
– Analyse your emotions and thought processes, so that you are able to control impulsive reactions.
– Accept your mistakes and allow your ego to dissipate.

Trading for a living is now accessible to everyone, but it is not an easy task. Becoming a self employed trader takes time and hard work. Experience and analysis of trading charts are essential to understanding the behaviour of investors and to determine when to enter and exit positions at the most opportune moment.
80% of trading results are due to our ability to manage stress and emotions, only 20% are due to good market knowledge and technical analysis.