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.
The first prerequisite for a full-time trader is that you have to realize something: you are not actually trading against other traders, or against the market. You are trading against yourself. If you are unable to overcome your inherent weaknesses as a trader, you will never be able to trade successfully over a long period of time.
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.
The same is true if you do not develop the discipline to let a winning trade ride – to allow it to reach its full potential and make some serious money. Selling winning trades the moment they have made a little money and staying in losing trades forever are the two major causes of failure for newbie traders.
You second important step will be to decide what type of trader you want to be. A day trader, a swing trader or a longer term trader. Day-trading is extremely alluring. You can start with little money, and you can sometimes make a lot of profit in one day. Statistically it is however much more difficult to predict the market movement for a share or a currency during the next 8 hours than to predict it for the next year.
You will need to decide whether you are going to trade in shares, in commodities or in currencies. Each one of these requires a special set of skills and tools. Share trading will require that you study the financial statements of the companies involved and the underlying market conditions for those companies. With commodity trading you have to get familiar with the market in that type of commodity. The same goes for currency trading.
The right tools are of course very important as well. To start off with you need knowledge. You need to get familiar with reading financial statements and analysing charts. You need to understand technical indicators, how to use them and how to interpret movements in these indicators
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 is a noble dream. To make it more than a dream, you need to be able to control your own trading weaknesses and you need the proper tools. You also need a lot of determination and just a little bit of luck…