Is it possible to make a living—a good living—by trading stocks? Absolutely, and the barriers to entering this kind of work aren’t necessarily that high. However, it’s vital to go into stock trading with a clear understanding of what’s involved in full-time trading, and with realistic expectations of what you can accomplish.
The internet makes it incredibly easy to research companies, stocks, market trends, and other essential information, and with a good stock trading platform it’s easy to set up trades, too. In technical terms, there are far fewer barriers to trading stocks than there used to be. Thanks to the internet, it’s also easy to keep track of your investments from home or virtually anywhere else.
Note that some kinds of trading do require a significant capital investment. For instance, if you’re designated as a pattern day-trader buying and selling on US markets, you’re required to hold a minimum of $25,000 (around £20,000) in your trading account.
However, there are many other kinds of trading, such as spread betting and currency trading for instance, that don’t require such a large initial investment.
Overall, providing you have the time, the technology, and some starting capital, it’s relatively simple to get started in trading.
Not everyone has the combination of personality traits that you need in order to be a successful trader. It takes determination and drive, but it also requires patience, methodical attention to detail, and the ability to stay calm and collected even when you’re losing money. Trading can be a high-pressure job, and it’s important that you’re able to handle that pressure, and continue to think clearly in stressful times.
Another important point to understand is that even successful traders lose more than they win. The key to success isn’t winning every trade, it’s making more on the successful trades than you lose on the bad ones. To be a trader full-time, you must be the kind of person who is able to lose—even lose a lot—and still be able to think on their feet for the next trade.
Many people who dream of becoming a full-time trader do so because they don’t really know what the work entails. For instance, if your mental picture of stock-trading is that you’re going to be a person of leisure who sometimes has to make urgent phone calls, then you definitely don’t have a realistic idea of what’s involved in full-time trading.
Make no mistake, if you’re doing this full time, it’s a job, not a hobby or a leisure activity. And as jobs go, this one can be fast-paced and very stressful. Again, it’s vital that your personality type is one that can deal with the reality of the work you’re doing. You must be the kind of person who can not only deal with the stress of the job, but also with the stress of living on what may be a very inconsistent level of income.
