Yes, you can live from trading and become a full-time professional trader. There are people who do it. Although the most appropriate would be to approach the question from another perspective:
Is it possible for everyone to live from trading?
I sincerely believe that this would be a question much more adjusted to reality and your answer is marked by individual factors of each trader. Let's explain.
We must not forget that living from trading in the end means developing a successful operation over time, not just at specific times. Only in this way can we regularly obtain the income that allows us to live and cover our expenses every month. And as we have insisted talking about other issues, the most complex part of this activity is precisely that, maintaining a constant profitability and being a consistent trader in the medium and long.
Risk control is even more important if you want to make a living from trading.
If we want to achieve this goal of living from trading professionally and full time, we must banish at least at the beginning, that image of the successful trader that impacts us through the aggressive advertising of many brokers or courses to learn to invest. The image of that successful trader with powerful high-end cars and living in luxury homes, which generates huge amounts of money with just a few minutes a day of dedication.
If we want to develop a profitable trading activity in the long term, the control of the risk will be fundamental and if we control the risk in the correct way, the benefits that we will be able to obtain from our operations will be quite modest, in percentage terms. Let us not forget that risk and return are directly related and that in order to obtain higher returns we must assume more risks with complete security.
Therefore, the person who wants to be a professional trader and make a living from trading is faced with a great dilemma, since in order to generate high income he needs to take very high risks on his total assets. This is usually the prelude to the loss of an account.
The importance of psychology when trading
Although we have said yes to the initial question as to whether one can live from trading, it is no less true that the difficulties in achieving this are high. This situation of having to keep under control our risk and our emotions of fear or greed will continually test our psychological balance as traders and give solution to this problem is essential.
The psychological pressure to see you forced to achieve certain returns in order to pay your bills up to date and maintain your current standard of living can be devastating, so it is necessary to reach this goal having developed your skills as a trader.
We must be very cautious and disciplined with the psychological side of trading and with our monetary management not taking excessive risks that are lethal to our portfolio in the long term.
But also if we start with little money available to invest and the percentage of risk that we assume is reduced because it will also be the profitability that we can obtain.
And here comes the big secret:
To be able to live from trading under optimum conditions, you need to have significant capital.
Without wanting to discourage you, it is very complicated, if not impossible, to try to live from trading by managing accounts with a small available capital.
People often don't know very well what profitability they can expect from the market. Let's think, for example, of returns of the order of 10% or 20% per month which, despite being quite optimistic, does not mean that they cannot be obtained at certain times, but generally they will not be norm.
Think of a trading account with €5,000 and that hypothetical return, difficult to maintain, of 20% per month. We would be talking about a profit (excluding taxes) of 1,000 € per month that may not reach you just to cover your monthly expenses. If you don't reach this 20%, how are you going to pay your bills? Also think about the level of psychological pressure you are going to be subjected to in order to achieve the profitability you need at all costs. Think now of the differences you would have if you managed an account with 30,000 €, 50,000 € or 100,000 €.
Remember that if you want to make a living from trading, there are no big profits to be made at specific times. We must be constant over time. Therefore, living off trading can be a reasonable long-term goal and managing an account of a reasonable size, but not in an immediate or short term.
The common denominator of people who live from trading often has this ingredient on many occasions: they have taken time to reach the necessary consistency to develop the activity continuously in the markets with a constant profitability. And many times, once a certain consistency has been reached, the trader himself, aware of the difficulty and the variable nature of the market, ends up looking for other sources of income in parallel to complement trading, in order to have more security and stability. If we think about it well, with this practice they only act as real professional traders: maintaining an adequate control of risk and diversifying their income.
Given that trading gives you the advantage of being able to have and organize your own time, you can consider the possibility of starting trading part-time, making it compatible with other activities that generate income. With the passage of time you will learn to invest and you will have a trading system much more optimized than at the beginning and you may already be getting a return that will be a good indicator of when is a good time to move to live trading full time.!
Thank you. I hope it serves you, my friend.
it's my first post.😃