Is trading living an accessible dream? How much capital does it take to trade ? What salary can you expect? Are all individuals made for the business of trading for own account? How ? How to become an independent trader? These are so many questions that I will answer in this article. Join Stock Market Course in Delhi From DICC to learn more about stock market and how it works and how it will give you a livelihood even in current situtation when everybody is in their houses due to COVID-19 fear.
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Learn trading before you can live on it
I no longer count the number of individuals who come to the forums to display their desire to make a living from trading. Most of the time, this idea arises after the recent loss of a job, a long period of unemployment or having a job that does not please. What motivates most individual traders to make a living from trading is often the desire to radically change their lives . But impatience is a bad thing, especially in trading. Beginning traders often want to train as quickly as possible in trading (some do not even want to and believe that you can improvise trading overnight) to start making quick money. Learning the basics of trading takes a lot of work and time.To know the basics, you have at your disposal several learning guides to train you in trading. On the other hand, there is one thing that cannot be learned, it is experience. As much in certain trades, the right skills may suffice, but in trading, this is not the case. To become a good trader, it takes several years. It is necessary to multiply the tests of trading strategies, find a good formula to manage your risk well and learn to control your emotions (see trader psychology). There are always clever people to tell you the opposite, those who make 200% of performance in a few days and who boast on the forums, but strangely, we do not hear them a few days / weeks later. Because yes, being a winner in your trading, everyone is capable of it (luck, good intuition, talent), but being a winner in the long term is the real challenge. Living off trading means being able to generate a decent salary over a long period of time. It is not making a fortune in a week !! If you want to succeed in trading one day, you must understand that your money is your working tool . You should aim to protect it as much as possible. If you lose your money, you are out of work.When you start trading, your goal should not be to make money but to avoid losing money, to last as long as possible . If you last in trading, you are learning. You are on the good road.
The prerequisites for living off trading
- Experience Before you can think about living a trading business, you have to work hard, very hard. Several years are necessary to train well in trading. The best way to learn is to practice. We can draw a parallel between school and a profession. At school, you learn the technical basics, the theory. But when you put your skills into practice, you realize that it's not enough to be good at your job. You need to gain field experience, learn practical tips to help you progress. In trading it's the same, learning the basics just takes work, but becoming a good trader takes time .. Remember this if you hesitate to pay fortunes for paid trading training that promises to make you a trader in a few days. If you are naive enough to believe it, then you are too impatient to succeed. Remember, impatience is a bad thing! - The mind To one day be able to hope to make a living from trading, you must have a foolproof will. Learning to trade is long and tedious. You will go through many disappointments, shave several trading accounts, curse yourself for having foolishly lost your savings, go through long phases of frustration and anger. Besides that, you will have phases of euphoria or you feel untouchable, stronger than the market. You will understand, you will have to fight your emotions. Positive emotions are as dangerous as negative emotions . The objective of the trader is to completely eliminate them from his trading, or rather to control them.The day you get there, you're on the right track for trading. This involves learning about irreproachable risk management ( money management ) but also learning from your mistakes. Making mistakes is the best way to learn , only in this way can you learn a lesson from trading. The bottom line is that these mistakes do not cost you too much and it is for this reason that your first deposits into a trading account should never be too large. Regardless of the amount invested, having your money at stake is enough to activate your emotions. In trading, your biggest enemy is not the market, it's yourself! You also have to take into account the pressure of living off trading . If you have a bad month, you don't pay yourself, worse you have to make up for your losses before you can pay yourself the next month. For most people, this pressure is very difficult to bear. Personally, I never got there. Trading took over too much over my personal life, over my mood of the day. It is not enough to have winning trading strategy for a living from trading. The psychological aspect is at least as important as trading itself (trading strategy and money management). I invite you to read: How to be a winner in trading .
What capital to make a living from trading?
The first thing you need to integrate is that the financial markets are not a giant casino. If you are trading in order to get rich, you are on the wrong track. Your goals must be commensurate with your means . If you invest € 10,000, you will not earn hundreds of thousands of euros but at most a few tens of thousands of euros if you are a good trader. You must also take into account an element if you want to make a living from trading, it is the trader's taxation. A large part of your earnings disappears in social security contributions and taxes. Trading is a job like any other, the goal is to pay yourself a more or less regular salary every month (which means regularly withdrawing part of your earnings!). Let's take an example. You deposit € 25,000 on a trading account with an optimistic assumption of a gain of 10% per month. At the end of the year, if you have not changed your leverage, it gives a trading gain of € 30,000. At this stage, you can still evolve under the statute of auto entrepreneur, which gives social contributions capped at 23% (instead of 45% if you exceed 33000 of gain), plus the taxes to pay. You have about 20,000 € net of tax at the end. 20,000 / 12 = € 1,666. This is the amount you have left over every month. Second example with larger amounts and above all the withdrawal from the very advantageous auto-entrepreneur system. Suppose your trading gain is € 50,000. By removing the social contributions (45%) + tax (€ 7,850), you have € 19,650 left. Surprise, you earn roughly the same amount as before while your earnings have almost doubled. It is the magic of getting out of self-employed status and being taxed under the classic regime in France. Moral of the story, earning a small salary is possible but from the moment you want to generate significant income (which remains the objective of all individuals who wish to live from trading), you must have a very capital significant several hundred thousand euros. I let you do your little calculations based on the salary you hope to earn to find the right amount of capital. To escape this, there is only one solution, it is to leave France. I do not know any trader for own account who lives in France . Taxation is far too high! Luxembourg, Andorra, Spain, Hong Kong ... these are the destinations chosen by certain traders. Only here, you must be ready to leave France to settle abroad. It is the price to pay to be a trader for own account unless you have a very large capital or have an extraordinary performance. If you ever manage to overcome all these obstacles, there is one point to be addressed; it is the life of a trader. Contrary to the image released by the films, the trader's life is no more thrilling than another. It is even boring. The goal of the trader is to stupidly apply his strategy without ever deviating from it, with strict money management and absolute control over his emotions. We then become a sort of trading robot. Living on trading, a utopia?
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