Most retail traders have only one idea in mind: to one day be able to make a living from their activity. When is the right time?
The real meaning of “Living from trading”:
Behind this desire to quit his job to finally make a living from trading, lies another objective: achieve financial freedom.
Unfortunately, many rush and fail, for not having properly prepared their departure for this new life.
The first year is also the most difficult to get through and you have to think about all the changes that such a situation causes:
- No fixed salary : your salary is directly linked to your decision-making. For some (including me), it is a liberation. For others, it is a permanent anxiety attack.
- Less free time than expected : Trading is a time-consuming activity, especially in the beginning, when you are putting everything in place to ensure a minimum of regular income. It is not exactly the idea of: "Do nothing all day", which many seem to expect from the beginning.
- Set yourself a schedule : the markets obey strict schedules (except forex, which never sleeps). When the Paris market opens at 8 am, you have to be ready. So there is no question of thinking about getting up at noon, especially knowing that at 5 pm, there is nothing left to do.
-Trading is a solitary activity : you may not have a boss, but you also won't have any coworkers to meet up with at the coffee machine. While some people adapt particularly well to this situation, others have a hard time dealing with it.
So before you quit your job to devote yourself entirely to trading, it is best to take these few points into account.
Some things to know BEFORE you start:
Obviously, to make a living from trading, you must first be a profitable trader. Quitting your job to trade, without even knowing what a Japanese candlestick is, is therefore not a very wise idea.
To have a chance of surviving in this field, you must therefore have all the necessary knowledge, but above all (ABOVE ALL) know how to apply them and generate profits regularly. If this is not yet the case (and even if it is far from being the best idea), you must have enough savings to be able to hold out, the time to earn enough money to live from trading (you have to continue to pay the bills, which will not wait...).
Finally, going “pro” subsequently implies, a change in professional status and you have to make sure to respect all the legal aspects of your new situation. Everyone will move forward according to their possibilities, only the final result matters. Some will need 3 years, others 5, others 10 years, the execution of such a project is not subject to a predefined period and depends on a whole bunch of factors.
It is only once the different stages have been completed that you can really say that you are (finally!) making a living from trading: the right moment is now.
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Good morning !
Very good analysis. It is not as easy as it seems. But for those who are by force of circumstances without work it can be a solution.
For others, the transition must be well prepared.
Excellent article!
Personally, my goal remains simply to own shares in remarkably well-managed companies.
My enrichment will come through my rights to the benefit of my companies (dividends) but largely through the increase in the intrinsic value of my companies over time.
It's simple, I am a long-term business owner with their own management teams, which leaves me time to enjoy life and pursue all the hobbies I like in life.
To answer the question directly, I would say that you can make a living from trading when you have achieved a profit capacity equivalent to your financial needs.
Martin
Good morning,
Very good article. It convinced me not to start because I wouldn't be able to hold on. It's like professional poker players. You have to silence your emotions and stick to strict, almost mathematical tactics to hope to make a living.
I rather consider the stock market as a means of creating passive income, the complete opposite of trading.
If it's not too indiscreet, how much can we expect in monthly turnover if we have 10,000 Euros. Otherwise, how much does it take to earn 2,000 Euros/net per month?
Belrix
Hello Belrix.
With your 10,000 euros it depends on your type of trading. The best is to practice day trading with CFDs on indices. After a more or less long learning and an increase in workload as your experience grows, you can hope for 1000 to 2000 euros per month (20 points per day on average x 5 euros approximately per point x 20 days). Little by little you will increase your earnings as long as you grow your capital.
No matter what your pace is, you will get there if you are persistent and have a method that allows you to earn 10 pips per day on average (averaging is the hardest).