Trading for a living

As a child I remember rare visits into the city with all the high rise buildings, and thinking wouldn’t it be great to be a part of that, the movers and shakers of the world. It was one of my dreams to live in the city, learn about the stock-market, and make a lot of money. This was a very distant dream from my present circumstances as a child.

How good would it be to become an independent trader, and get rich. Trading seems like an easy way to make money, but I can tell you from experience that it’s really not. In fact I would say that in reality it’s the exact opposite, a very easy way to lose money and one of the hardest things you will ever do.

Trading is one of the most difficult ways there is to make money. The vast majority of people who try to trade the markets end up losing, some studies say that more than 95% lose money and fail. From my personal experience I’d reckon it could even be 98% or 99% of private traders who lose in the long term.

If you want to succeed in this game, you’d better be prepared to do what it takes to get into the 1% or 2% who are successful at it.

Trading can be one of the most stressful things you ever do. Nobody knows what is going to happen in the market. The more I learn and the more experience I gain, the more I see that this is really true. As far as the market as a whole is concerned, I’m convinced that nobody actually knows what the market is going to do.

When you are in the markets you never know for certain whether you are going to make money, or lose money. There are definitely a lot of easier ways to make a living, I used to have one of those as an employee. But if you can succeed, nothing else offers the freedom and lifestyle of trading for a living.

The trading style I have developed and now specialise in is centred around options, although I do trade other strategies from time to time.  The options trading I do is primarily trading option spreads on some of the major stock indexes. I sometimes also trade put and call options on stocks. Outside of options I use trend following strategies on currencies and market indexes.

If you’re new to trading you can start with some of the basic courses that are available, such as free courses provided by the Australian Stock Exchange. I’d also recommend one of the best places to start is with books. There are a lot of great trading books out there as well as a few duds. You want books written by real traders. Some that I’d recommend to start with are:

  • Smart Trading Plans by Justine Pollard
  • The Disciplined Trader by Mark Douglas
  • The New Trading for a Living by Dr Alexander Elder
  • The Complete Guide to Option Selling by Cordier and Gross

In regard to options, I would also recommend the video courses at Low Risk Income Strategies which I completed and found to be very good.

One of the best if not the best thing you can have as a trader is a mentor. For me I was very lucky to have an options trading mentor for nearly a year. This gave me an awesome head start and I am forever grateful to Gordon for his help. There’s nothing like an experienced mentor to help you with your trading and to increase your knowledge exponentially.

Success and Trading pages