Let Me Off
Trading as a profession…the ultimate dream. Jumping off the 9-5 merry-go-round grind, telling your ungrateful boss to take a long walk off a short pier, ditching the commute, kissing your annoying coworkers and ungrateful customers goodbye. It sounds heavenly, doesn’t it? The trick is getting from “here” to “there”.
Three Ways From Here to There
There are actually ways to get there, at least three that I can think of:
Option 1: Become a successful trader and trade your own money.
Option 2: Become a successful trader and trade other people’s money.
Option 3: Become a successful trader and trade a company’s money.
Did you happen to pick up on the common thread in those three suggestions? Success. It doesn’t come easy or quick, but it can be easier and quicker with a tested system. That’s what we do here. Let’s discuss each one in a little more detail.
Got the Time?
Becoming a successful trader and trading your own money will probably take you the longest amount of time because income is a function of your account size. Most people don’t have a six-figure account to leverage 2% risk on trades, which would earn them enough to both compound profits and provide sufficient disposable income for a lavish lifestyle…or even a middle of the road lifestyle.
Let’s break this down.
Assume you’re fortunate enough to have disposal income, or better yet, discretionary funds for trading.
And, let’s say you have achieved an elite level of trading and can consistently make 25% per year – challenging, but certainly not impossible. Considering that Warren Buffet, who caps out at between 20% – 30% a year…and is considered one of the most successful in the business, gives you perspective as to what you might achieve.
Oh, and anybody that tells you they’re pulling in double-digit monthly returns is probably stretching the truth, over leveraging, taking excessive risks, or out-and-out lying. Ask for proof…at least a year’s worth and then copy what they do!
Here are some thought-provoking numbers…
You can see that even after very successful trading and without pulling out your profits, your compounding account is producing far less than what you would need to live, unless you have a healthy bankroll to begin.
Oh, a cautionary note…please never trade money earmarked for necessary living expenses like rent, bills and food. Lose that, and the game is over before it’s even begun.
Your Benchmark
By the way – you’ll notice that the 12% column is highlighted. Why? The reason is that 12% is about what the annual ROI that the S&P returns. This IS the benchmark that you really need to aim for to consider yourself a profitable trader. Any less than that, you might as well give your money to an investment broker and let them trade it.
So maybe the answer is more capital? Well sure!
Friends & Family Plan
Enter option two. Convince a few friends and family to pool their money into a one larger account, charge a percentage, and away you go.
I’m sure you can see where the potential problems may lie in this scenario. Are you going to guarantee results? What happens if you don’t get those results?
While you may have the best intentions and stress that past performance is not an indication of future results, those who entrust their money to you will quickly forget that little caveat once a string of bad trades eats into their bottom line.
Soon, your friends and family members may lose their enthusiasm and start to ask about your plans of how you’re going to replace the money, followed by emotionally charged phone calls at all hours of the day and night.
Best to stay away from option two.
Door Number Three
How about option three? Become a Prop trader. Believe it or not, this way is probably the best choice if you can make it through the obstacle course to a prop trader. Here are the broad strokes…
First, you must demonstrate that you can actually trade. You would probably need to share a verified account history before participating in their training program prior to taking charge of funds to trade.
The Process
There would be an interview and probation process to find out about your risk profile, trading style, and how you would handle different markets. All this may take six months. Are you prepared to make that commitment? Are you wiling to pay monthly desk fees and offer up good faith funds to hedge against initial losses? If so, then you stand a chance at gaining access to a significant amount of money to trade and potentially creating a rather handsome income for yourself. In some cases, a Prop trader’s salary is based on the range of 60% – 80% of the profits you generate.
Old School
Perhaps you might not know it, but professional traders usually spend about four years learning the craft, spending roughly $50,000 for the education, sitting through some kind of trading license examination process, finding employment, and then slogging through a probationary period; all before making any significant trades on their own.
Perspective
Put things in perspective. After all, how much would you trust anyone performing anything of value who boasted a few weeks of study and practice to oversee something as important as your hard-earned money (investment broker), your health (doctor), or home (trade professional), your children (teacher), and so forth?
Take Your Time
You can significantly compress that timeline, but only with dedication, perseverance and access to a quality training program. We suggest six months to a year of focused work before trading live money. Granted, it’s going to take you a bit longer than the anticipated couple of weeks to gain proficiency and expertise trading with any degree of regular profit that others profess. This is normal.
So, that quality training program you’re looking for? We happen to have it, in fact. You can find out about it HERE.
You can do this.
If you’d like to watch the video version of the blog, we’ve included it below…enjoy!
Our only goal is to make you a better trader. Be sure to sign up on our contact list for the latest announcements.
BTW – Any information communicated by Stonehill Forex Limited is solely for educational purposes. The information contained within the courses and on the website neither constitutes investment advice nor a general recommendation on investments. It is not intended to be and should not be interpreted as investment advice or a general recommendation on investment. Any person who places trades, orders or makes other types of trades and investments etc. is responsible for their own investment decisions and does so at their own risk. It is recommended that any person taking investment decisions consults with an independent financial advisor. Stonehill Forex Limited training courses and blogs are for educational purposes only, not a financial advisory service, and does not give financial advice or make general recommendations on investment.