Can you make a living trading the stock market?
I believe you can BUT it’s not the easiest profession to learn. Let me tell you about my experience.
The first three years on my location independent journey, I was trading full time. Mostly index futures and commodities. But I stopped in mid 2015 to focus on fundamental research and more long term investments instead. Stock trading was just too damn stressful!
However I did make money. Stock trading is a tough business and most traders lose money. If you have a consistent profit, you’re in the top 10% of all traders. Not bad!
But is this for you? It could be, but it pays off being realistic. A lot of trial and errors will be needed, and there will be losses until your trading plan has been optimized. And for most people, the trading plan will not be the issue. Instead the issue will be, that you’ll not strictly be following it. Due to stress and FOMO (Fear of Missing out), you’ll jump in either too early or too late. Resulting in missing out on profits or taking larger losses than anticipated. All new traders will experience this.
This is also a profession that requires your attention. You need to be always “on”, and preferably sitting in front of the screen when the market is open. Not the ideal scenario when trading the futures market in Chicago, while living in Thailand. That’s what I did.
There’s some good news of course. Today it’s relatively easy to get started with stock trading. There are plenty of online discount brokers where you can get started with a low account balance. In addition, some brokers have stock trading fees as low as a few dollars.
So would I recommend Stock Trading?
Yes definitely! If you can make this work, it’s the perfect location independent job. No boss, and you can work from anywhere. For example on some days I even traded from the beach!
If you want to try it out, I recommend finding a trader you can follow and learn from. Today many traders share their trades in real time for a subscription fee. IF you find the right guy it’s worth it.
However, if you want to be good at stock trading you can’t rely on these guys forever. At some point you need to start doing your own research and trading. For example, after I followed my mentor for a year, I cherry picked the technical indicators I liked and started doing my own research. For me, a simpler trading plan relying on fewer indicators was the best choice. Complexity added confusion.
Try out several services before selecting one. Many of them are scammers or outright incompetent. And it’s very important they have a Profit and Loss (P/L) page that is up to date. They need to be fully transparent with their stock trading (entry point, profit, stop-loss etc).
The following books helped me immensely when I started out. First its the original bible of technical analysis Technical Analysis of Stock Trends by Robert D. Edwards and John Magee. It was the first trading book I read and it’s still very much valid today. In addition it’s good to get some basic knowledge about fundamental analysis, and my favorite book is The Intelligent Investor by Ben Graham. Ben was the mentor of Warren Buffet.
One final advice. If you do go ahead and start stock trading, use money you can afford to lose. And not your rent money!
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