Are you ready for full-time trading?

Trading is simple but not easy! It is simple because you can buy or sell stocks just at the click of a button, but what to buy and when to buy is a d̶i̶f̶f̶e̶r̶e̶n̶t̶ difficult ball-game altogether. 95% of people who opt for trading as a profession eventually, QUIT!

Keep these questions in mind before you end up losing your capital.

  1. Do you have a robust trading strategy?

To be a successful trader, you need a robust trading strategy with a statistical edge — Something that is thoroughly backtested & works in most if not all market conditions.

Let us take the example of a Casino. Just by using the Roulette Wheel, casinos make billions every year. In Roulette, the probability of red to black is 50:50 right? Wrong! Casinos don’t beat players because they are lucky, but because the odds are tweaked in their favor. By introducing 2 green pockets, they enjoy a winning probability of 20/38 viz a player’s winning probability of 18/38. Casino’s edge over the player is just 5% but by exploiting this edge, ‘the house always wins.’ Similarly, the only way to make money in markets is to have a strategy with a statistical edge

2) Do you have savings for at least 2 years?

Unlike other professions, trading ensures no guarantee of getting a monthly paycheck. It is a game of probability and being able to let your edge play out. You may have losing streaks and sometimes even losing months but having enough savings keeps you afloat & going, even emotionally!

3) Are you emotionally strong and disciplined?

Trading is only a 10% strategy but 90% discipline. Trust your system, follow it and execute trades irrespective of the outcome of the previous trade.

4) Do you have a good size trading account?

Most traders who blow up, start with a minuscule capital and dream of turning it into millions. You should have reasonable capital and a realistic expectation if you want to make trading as a full-time career.

People keep looking for holy grail without realizing that Trading is more about yourself and less about strategies.

To summarise the article, the mantra for long-term trading is given as follows:

Successful Trading = Robust Strategy + Money Management + Discipline + Risk Management

Quant | Algorithms | Options | Trading