Four steps for successful trading stocks for a living

People always see stock trading online as an easy career with big earnings. But is it not always that easy. If you are considering trading stocks for a living, there are four things you should think about. But if you are only trading beginner, who wants to just start trading online, you should read how to start live stock market trading first.

Trading at home is a business, so treat it like one

Trading from home is more like running a business then like a job. Firstly, you do not have to spend 8 hours a day sitting at your computer. This would most likely lead to overworking and then losing your money. So don’t spend all your time trading. Read a book, spend time with your family or go for a run. All of this will make you more fit, fit for trading.

Secondly, there comes a big risk with running a business. More than 90% traders alike business owners fail and close down in the first year. Have a back up plan. Don’t bet everything on trading.

Money to secure your household and kickstart your business

To start trading stocks for a living you need some money. You should first have some money aside as a ‘cushion’ for you regular expenses (rent, mortgage, food, car, insurance, ..), at least 6 months worth. Then your trading business will require capital. Calculate it backwards. How much money do you want to make? What is your current return ration? Remember to also throw in some extra 10 – 20% as a cushion.

So if you want to make $50 000 a year and now you know that you can make a profit of 20%, you will need:

50 000 / 0.20 * 1.2 = $300 000

Set up a reliable trading system that you perfected

Stock trading can get very risky. You should not start placing all eggs in one basket before you have already gained some experience. Full time traders should make profit at leasts 50-60% of days. Make sure that you know your trading system and have bulletproof risk management and money management rules. Learn more about how to set up your trading system and start trading stocks.

 

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It is worth it, but not for everyone

When you decide to trade from home, you get new freedom and independence. And I believe that everyone can learn how to trade stocks for a living. But there is also price to it, being a trader can be very lonely at times, since you don’t get in touch with people that often. Find a new hobby, join a local community or keep a mini-job on side.

Also the job is hard, and most likely you will make only 2-5% profit a month.

So if you really want to start trading stocks for a living, you should first build the best stock trading system, gain some experience and save some money as your “cushion”. When your profit becomes stable and you make money at least every other day, you can try trading stocks for a living.