What does it take to be a trader
you are a successful part time trader eventually you will ask yourself the
question – “Could I do this professionally?”. If you have a proven track record
with a solid strategy and a viable risk/reward ratio in place – theoretically you
should be able to “go pro”. The real question though are those the only things
necessary? What else do you need to trade forex
Like Other Jobs
is the usual trajectory of a more traditional 9 to 5? Education, Entry Level
position, Middle Management, Senior Management and finally the not so
frequently achieved, expert consultant. Let’s say as a part time trader you’ve
covered one or two of those five career stages. If the strategy you use or
developed can keep your account positive or even better create sustainable
returns compared to your losses, then you might have managed to graduate to “middle
management”. You have enough experience and knowledge to train other people but
lack a long-term proven track record.
the fun begins – let’s assume for the sake of this simile that senior level
management is trading full time, you have a deep understanding of trading, the
experience and a proven track record. What else could you possibly need?
many new traders think the way to fast and substantial returns is high
leverage, they couldn’t be more wrong.
a look at any institutional traders; there are two things they avoid like Dracula
avoids garlic – high leverage and high risk – a killer cocktail which novice
trader often get intoxicated on. The problem with this cocktail is it has a
heck of a hang-over: a blown account.
if you are imagining your life as a professional trader looking like a scene
taken from Wolf of Wall Street (the first part before everything went sideways)
forget it, trading is less crazy impulsiveness and high risk behavior and much more
consistency and calculated risk.
are you trading? Do you trade because you enjoy calculating price movements,
recognizing trends and observing emerging patterns? Do you trade for the extra
income? If so, then you might be better off just sticking with part time
a professional trader means more emotional impact when you are on the markets,
a larger investment and more hours in front of a multi-monitor array. Moving
from something you do on the side to your full-time profession and depending
your livelihood on it, can be quite a challenge, a challenge that some traders
don’t even consider before they make the jump.
you are determined and focused on become a full-time forex trader,
then make sure your have at the very least a few years under your belt with the
bare bone minimum of six months according to some experts.
alternative to becoming a self-employed trader, is becoming a broker that
usually works for financial institutions trading on behalf of clients. If you
are excited by the “craft” of trading but would prefer to avoid all the
administrative troubles that go along with being self-employed then being a
broker might be a solid career direction, that will ultimately allow you to trade
on the location of your employer you may have to become licensed by the local
regulator. If courses are required to do so they are usually paid for by the
employer. Some people try to give themselves a competitive edge by taking
courses and becoming licensed before they even start applying for jobs in the
only thing that is absolute is death and taxes they say. This is a pitfall a
surprisingly large amount of self-employed people fall into, not filing or
paying their taxes correctly. Something else that is sometimes is overlooked
are tax deductions, if you are self-employed, your local authority may offer
some types of so-called write-offs, bringing down your bottom line even
jurisdictions may need licensure or disclosure depending on the frequency and
size of your trades. Check with your local tax and financial industry
authorities for details.
you still choose to strike out on your own, it is important to partner with a
broker that offers exclusive risk management tools, great support (which you
will need when starting out) and of course fair trading