How to make a living from trading [Advantages and risks in 2022]
How to make a living from trading [Advantages and risks in 2022].
The business opportunities offered by trading allow many of those who have already taken the leap to ask themselves how can I make a living from trading. The keys to achieve it are always to be in a permanent search for information and never let your guard down. If your desire is to make a living from trading, you must take into account all these factors. Keys to be a trader and make a living from it
Having your feet on the ground is perhaps the most obvious starting point if you want to make a living from the markets. Forgetting any kind of expectation and taking it as a long-distance race in which you go little by little is perhaps the most successful strategy.
Unfortunately, I'm sure that as a trading enthusiast you receive a continuous bombardment about how easy this lifestyle is and how much money you can earn. You should discard this false premise from the very beginning, the main key to be a trader is none other than to train continuously and be aware of everything that happens in the economic and political landscape. Only in this way you can have a good starting point that allows you to begin to enjoy the benefits of trading.
Remember, here the word success has to be taken with care, since we do not associate it with earning thousands of euros every month, but with having a solid career that allows you to devote the time you want to this activity.
Ways to make a living from trading
It goes in relation to the time you have available for trading. It makes the most sense for you to start partially, not leaving aside another occupation if you have one. In addition, as we will see below, you must have a significant capital to be able to make a living from trading.
To value the risks, to put into practice our knowledge and to keep in mind that you never stop learning, are the main premises to make a living from trading.
On the other hand, if you have more ambition, we mean the good kind, and you think you can devote yourself to it full time, you will have to weigh the capital you have available to operate and always keep in mind that it is a job. As such, it requires consistency and being extremely methodical.
How much money does it take to make a living as a trader?
It will obviously depend on your expectations, and the size of your positions. For those who start out as a sporadic investor with low expectations, perhaps a few hundred euros will be enough to understand how the markets work. Obviously, don't expect any kind of spectacular profit, as this is in line with your capital. But making a living in the world of trading is different, you need an initial investment that can start from a minimum of 20,000 euros. If you get a monthly return of 5%, which is a very good figure, a lot, we would be talking about 1000 € every month. So, making a living as a trader requires a strong initial investment.
Phases before being able to make a living from trading
1. Forget about expectations
Perhaps this is the necessary starting point, a good reality check. Probably, you have been told that making a living from trading is simple, that it consists of arriving and kissing the saint. No, you are not going to swim in abundance or buy a yacht in the first month. You will always start in a very progressive way, so abandon all unfounded expectations, something unfortunately very common, and put your feet on the ground. Living from trading takes a lot of work involved.
2. Risk management
How far are you willing to go? To put in the balance all the risks that are assumed when trading in the financial market is not to lose sight of reality. You should know that the greater the risk, the greater the possibility of profit and loss. Therefore, you should never take a risk that will suddenly wipe out your capital, and create a good investment strategy. In other words, ambition is a double-edged sword and is not at all advisable when trading. You should cover the losses you have, because you will have them, with the profits you produce.
3. Choose a trading strategy
Diving into the markets without a strategy will make you lose sight of reality and will not help at all to know how to act in case of any unforeseen event. You must know that, in the face of any unforeseen circumstance, not applying a solution in time will lead you to irretrievably lose your capital, You must have a well-defined strategy before starting. Whether swing trading, day trading (short term), trend trading, fundamental or positional, having a clear strategy will reduce risks and allow you to trade in a better way.
Once you have chosen your strategy you will have to adapt it to your way of trading, but everything depends on having very clear objectives and a good knowledge of the market and a good technical analysis.
4. Leave your emotions aside
We will never tire of repeating that when trading you must put aside any intuition, hunch or the simple fact of acting with the heart and not with the head. It is a very common failure of those who start, therefore, do not be one of them and from the first moment apply everything you have learned to get as many winning positions. To achieve this, you must apply all types of analysis and always act with a trader's mentality, not a casino player. Remember that when trading stocks we are always excluding chance.
Keep up to date with the markets.
The real traders are from the first hour pending the evolution of the different markets. Banish from your head the idea of anyone who gets up at 10 am, trades for half an hour a day and at the end of each day has collected thousands of euros of profit. It is something that does not exist, but that they will not stop trying to sell you. To the daily and constant visit of the markets and their evolution, it must be added to be up to date with everything that happens in the national or international panorama. Everything that happens on a geopolitical level always has a consequence on the markets, which will only reflect what is happening in any scenario. Therefore, a global vision of reality is essential for you to become a trader with greater chances of success.
Choose a broker suited to your risk profile
There are a large number of brokers to choose from, perhaps the most important factor to find the one that suits you best is that it is properly regulated. It is always interesting to choose based on well-founded opinions and reading solid and reliable comparisons. Those platforms that have an aggressive advertising campaign and promise high returns are nothing more than a magnet for losses, including yours.
Always remember to adopt a low-risk profile, especially in your beginnings. We will repeat it ad nauseam, the good trader is the one who does not stop training and to handle with solvency those unforeseen events that arise. Therefore, do not pretend to eat the world at the first change, the chances of failure are too high.
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