Something about trading for a living has always drawn people in. It's one of those rare and unique professions that can meet the criteria of being the ideal job because it offers so many potential advantages. Still, it's also important to be realistic about what's involved in becoming a full-time trader.
For many, the pursuit of trading at an elite level is all about realizing "The Dream." What that means is different for each person, but it's usually about finding some fulfillment lacking in their current work or profession.
For others, it's the freedom of not having a boss or a set work schedule.
For some, it's having the flexibility to work from home and spend more time with the family, while a handful see trading as an opportunity to travel the world and take their work wherever they go.
Of course, many people also find themselves drawn to trading simply for the financial reward, as the possibilities are near limitless with skill and consistency.
The potential for total financial and career freedom as a professional trader is just as compelling for aspiring traders now as it was for me well over a decade ago.
While it's possible to achieve those goals, it's also important to realize that the path to becoming a consistently profitable full-time trader will be challenging and has its share of challenges to navigate. You must be fully prepared for the journey ahead.
It takes time and effort
Becoming a full-time trader is about something other than getting rich quickly or taking shortcuts to find the easy way to success, even if that's initially something that draws many to the profession.
If "easy money" in just days or weeks is your goal or you don't want to put in the effort and time required to develop a new skill, then learning to trade probably isn't the best fit for you.
Nobody becomes proficient at playing a musical instrument or competing in a new sport overnight, and trading is no different.
Like most professions, trading rewards those who work hard and have a vision for their goals.
It offers nearly limitless potential to traders who can identify and reinforce their strengths, confront and learn from their mistakes, and have the humility to understand that there is always room to grow and improve professionally and personally.
Having known a lot of aspiring traders, I can say with certainty that the trading world is very effective at weeding out those who need to be more serious about their self-improvement and their ongoing skill development as traders. Hobbyists need not apply.
For those sufficiently motivated and determined to succeed, becoming a trader is about having a clear development plan and being focused enough to keep pushing forward until you reach your trading goals.
Your Development as a Trader
Becoming a professional trader is challenging, as most things are worth doing. Still, it's possible to navigate many of the pitfalls of trader development through a combination of good planning, focus, and thoroughly educating yourself on the markets before putting your account on the line.
There will be inevitable challenges along the way, but building your skills as a trader is no different than developing any other skill.
There can be minor setbacks and plateaus at times. Still, there will also be periods of incredible growth and profitability as each new level of development as a trader is achieved.
If you can remain focused and stay on the path other professional traders have taken, it won't be long before you can transition into full-time trading.
So, given that there's no easy path without commitment and focus, the question for those aspiring to be full-time traders is, "What will make the effort worthwhile?"
Suppose you're like me, then much of the passion for this business comes from always having fresh challenges and being able to learn and grow continually.
Trading the markets is partially a puzzle to solve but also an incredible test of self-discipline and trust in your plan. Coming through those challenges successfully can give a tremendous amount of satisfaction. The profits are almost a bonus!
For many aspiring traders, the benefits are all about having professional freedom.
This might mean working for only an hour or two in the mornings to spend time with the family in the afternoons and taking Mondays off every week so you can focus on other projects or hobbies.
It can even be having the flexibility to escape for the summer and take some time off without planning your schedule around it. You're the boss, so it's up to you.
Others take their career flexibility to another level by bringing their work with them as they travel around the world, as anywhere you can find an internet connection for your laptop instantly becomes your mobile trading office. While we are now transitioning into a more connected and online working world, the freedom of trading is still something few other professions offer.
the path to Becoming a Full Time Trader
Whatever your ultimate trading goals may be, the journey truly matters.
To ensure you survive where others have failed, you must stack the odds in your favor by taking the best possible approach. While the path to achieving your trading goals is not a straight line and will see ups and downs along the way, several key elements can make the journey far smoother.
There are clear differences between the approach of those new to the markets and those who are consistently profitable professional traders, so it's a good idea to emulate those who have come before and have successfully become the type of trader you want to be.
1. Setting Realistic Expectations
This is the most common trap for aspiring traders, and devious marketers of trading programs know it. They promise 1000% returns every week, $10,000 per day, and millions in your first year.
While nothing in the trading game is impossible to achieve (sometimes through skill but occasionally through pure dumb luck as well), these attention-grabbing claims are usually very unrealistic for the total market newcomer.
These poorly aligned expectations encourage traders to take on too much risk too early in their search for massive, instant profits. The resulting combination of greed and anxiety often destroys a trader's efforts, leading them to poor trading decisions.
They don't have the experience, confidence in their trading edge, or emotional tools to take that risk so shortly.
The market veteran no longer thinks about potential profits but instead prefers to focus on risk and the proper execution of their plan. They know if they control these aspects of their trading, the profits will naturally result, so it's best to focus their efforts there.
They don't over-leverage their positions or take trades outside their plan because they know that keeping their risk manageable and building consistency is what will bring them better results over the long term.
Becoming a full-time trader is similar to developing any other skill - reaching your goals takes time, effort, and determination.
If you are willing to apply yourself to a set path that focuses on your trading development and stick to it, you will reach your long-term goals.
There will be good and bad weeks, but your consistency will improve over time until you are the type of trader you initially set out to be.
2. Stick to the Trading Plan
It's vital that when you start trading, you have a clearly defined plan. This means having a trading system you are confident in and the focus and determination to follow it and stick to your rules.
You need to know the setups you're looking for, how you'll get into those trades, and what you'll do if the price moves in your favor or against you.
While having some flexibility is helpful for experienced traders when managing trades, there is no excuse for taking a trade with no real plan and risking unnecessary loss.
It's easy for novice traders to let their emotions get in the way of their trading, leading to losses that are too large and far too small wins.
Keeping your discipline and following a plan with well-defined rules can counter some of these emotions and build your confidence as a trader.
Confidence is vital to long-term trading success; with structure to your trading, it will be easier to develop.
3. Honestly Review Your Trading Performance
This is a crucial element of trading development that is often neglected.
If you take the time to review your trading results thoroughly, you likely make giant leaps forward in future weeks and months.
Many market newcomers don't thoroughly review their results because they are embarrassed to confront their losses. They feel that a single losing trade somehow reflects their ability as a trader, intelligence, or even self-worth.
A professional trader knows this couldn't be further from the truth.
Losses happen to all traders, but what separates those who make a profession out of trading and those who don't is that the consistent full-time trader carefully analyzes all their results and adapts as needed.
They embrace their losses if they fit within their trading plan and were good trades that didn't work out.
If those losing trades were poor decisions or errors upon review, they see them as opportunities for growth and improvement as a trader.
4. You Must Have A Trading Edge
Another all too common trait of novice traders is "system hopping."
Many new traders have an extremely narrow focus when looking at their results, and the first time they have a small string of losses, they suddenly jump ship to another trading system, looking for the new Holy Grail of trading that will never have a losing trade again.
Of course, this perfect trading system doesn't exist, meaning this pattern repeats itself repeatedly.
Since the trader jumps to something new at the first sign of trouble, they constantly move to a new trading approach when their results hit a new low point. They go from one down to another, eventually leading to a complete account implosion.
The experienced trader knows that a single trade or day is unimportant in the big picture. They take a broader approach, understanding that they need to look at a larger sample of trades if they want something statistically significant.
They know that having a positive trading expectancy over those larger samples is the way forward. That knowledge gives them the confidence to stick to their plan and to trade their setups even when they have a complex set of trades or a day or two that doesn't go their way.
Through a solid trading plan, a well-tested system, and a thorough trading education (through self-study, experience, books, courses, etc.), they have the confidence to stick to their methods and allow their trading edge to come through.
5. Risk Management is Crucial
Many aspiring traders need help with their path to becoming a professional, and far too often, it is due to poor money management.
Money management is a topic that deserves a few articles on its own, but suffice it to say that it is a crucial part of any trader's plan, and without well-thought-out rules to define your trading risk, you will only set yourself up for trouble.
The professional, full-time trader knows managing risk is crucial to their success. They understand that making money can be accessible at times, but recovering from a significant draw-down of their account is very hard.
For this reason, they keep their maximum risk on any trade within their comfort zone and focus on trading opportunities where their reward-to-risk ratio is high. This allows them to thrive long-term in their day trading career.
While it's best to keep risk within 1-2% of a trader's account on any one trade, I've found that many longer-term professionals risk far lower than that as their account size increases.
In short, as they become more successful, they focus much more on limiting their draw-downs than on maximizing their potential profits.
My Trading Development Philosophy
A lot has changed since I built this site and started teaching others, but some things remain the same.
There are plenty of profit opportunities, but it's still challenging to navigate the trading world as there's plenty of misinformation online.
Especially in recent years, the rise of the "YouTuber" seems to have only added to the issue, as there are dozens of channels out there telling you how to trade things like MACD/EMA crosses or some other indicator combination, but precious few that share any real trades or discuss the difficulties of entering and managing trades in real-time.
There are some fantastic resources if you want to learn the basics of technical analysis, but if you wish to discuss breaking down charts and managing trades, there's little to be found.
Indicators are a great tool and help give a trader a good signpost for where they are, but they just mean a little with proper context.
And that is what most trading resources are about - all about that new fancy toy but no context on how to use it.
When I started in this business over 15 years ago, it wasn't all that different, as plenty of "never lose" trading approaches turned out to be complete nonsense in actual trading conditions.
I spent hundreds of hours digging into forums to try and find the nuggets of helpful wisdom that I could apply to my trading. It was an incredible amount of work, and over time, I became pretty good at separating the wheat from the chaff, but there were more efficient paths to trading consistency.
It's precisely because of those challenges that I went through that I've always tried to take a realistic view of trader development.
It can be challenging; you need motivation and focus, which will take some screen time.
There are ways to accelerate trader development by finding a good mentor who can guide you on the right path.
But even with a mentor, there's also no substitute for putting in some time and effort to understand how markets move and how to trade them effectively.
Ultimately, if you want to become a full-time trader, you must be prepared to commit to the complete learning and development process.
It won't always be easy, but learning and overcoming your sticking points will be immensely satisfying, and if you persist, then the sky is truly the limit in this profession.
Wish you all the best on your trading journey!
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