In The Trade | Stocks & Mutual Funds |
|
|
|
|
Trading For A Living
How many times have you said to yourself, "I'd like to quit this job and just make a living trading in the stock market"? Well, maybe you can, BUT... There a few things to consider. First, you have to have enough money to generate the income you need for your daily expenses and that amount is going to vary considerably depending upon the trading system. Shorter term methods will require less starting capital than longer term trend following or momentum systems. I am not an advocate of day trading. It takes a certain type of a very disciplined personality. Even though I was an exchange member I did not stand in the pit and makes scores of trades each day. The long term worked for me. How much income do you need? $50,000, $100,000, more? Based on your starting capital what kind of profits can you expect? Once you have decided on any system you must get to know it and should paper trade it for 6 months before putting real money on the line. Assuming you have a successful method you then must have the discipline to follow its rules even when you think they are wrong. You must take every trade. There are hundreds of systems and the magazine Futures Truth follows about 300 and prints their returns every 2 months. The easiest method is a momentum system with stop-losses built in to reduce your draw down during a bad trade. Even the best system only wins 50% of the time or less. The closer (more frequent trades) you get to the market the more random it seems. That is called noise and it can drown you out. You won't need expensive overhead as you can work from home, but you will need a high speed computer, maybe more than one, with good software. In some places brokerage companies will provide a workstation for active traders. The most important thing about trading is having a good exit strategy. Staying with a losing position will break you every time. You must keep losses to a minimum. The size of the position you take is another factor. If you decide never to risk more than one or 2% of your total assets on any trade that will determine the number of shares you can buy. If you have $100,000 and limit your risk to 2% ($2,000) using a 10% stop loss then you can buy 10,000 shares of a $2.00 stock or 200 shares of a $10 stock as your 10% loss will come to $2,000 (2%) in each trade. There are many other considerations to trading for a living and one of the most important is your emotional stability. How will you handle those losses? Can you stand 5 or 6 losing trades in a row? Or more? I know the answers to all these questions because I have been there and done that and I do not recommend you quit your job to do it. Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. 1-888-345-7870; al@mutualfundstrategy.com
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Size Counts! What the heck am I talking about?It is often said that to grow mentally, spiritually, emotionally and personally that you have to stretch and move out of your comfort zone. I definitely believe in this concept, however. Buy Low - Sell High Now where have I heard that before? I know. It was my broker. Political Investing We have two candidates for president that have really different ideas on how to make the economy grow.Bush believes in the entrepreneurial approach. Maximizing a Stock Market Investment Maximizing a stock market investmentThere are several factors an investor in the stock market should consider for a maximum return on an investment:1. All stock purchases should be commission-free. Social Insecurity Just about everything you have been told about Social Security is an obfuscation. That is a big word for convoluted truth or lie. Humpty Dumpty the Stock Market Falls Down Humpty Dumpty had a great fall and all the King's horsemen could not put Humpty Dumpty back together again.The Stock Market has had a great fall and all the brokers, CEOs, analysts and politicians have not been able to get it back up again. Stock Trading Success The ABC's of Stock Trading SuccessStock trading success.. What is the Most Important Indicator of All? Most stock market traders have a favorite technical indicator.The one that they have the most confidence in. Evaluation I An insane person cannot evaluate an insane evaluation system.As you know I have been trying to restore sanity to the insane premises Wall Street has been teaching its brokers and you for all these years. Good News? As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". Discover the Retirement Breakthrough the Federal Government Created for You - The Roth IRA! If you don't know what a Roth IRA is then stop everything, print this article and read it carefully as this will certainly be the most valuable information you read this year. This next retirement account is to your net worth what light bulb was to electricity. A Common Misconception about Stock Prices I cringe every time I hear a novice investor tell me that they only purchase low priced stocks because they offer higher potential gains. A common phase I hear is "I like to buy $1 and $2 stocks because they can double easily and I will make a 100% profit". What To Buy? Now that you have some money burning a hole in your pocket and the stock market is going up you have decided to buy some stock or maybe a mutual fund, but you have the momentous decisions to what to buy.At this point you have three decisions to make besides which equity to buy:1. Shorting Stocks - The Basics, Part II of II After the publication of the first part of this two part series, I had a few questions asking if shorting stocks is legal and I will quickly reply with a big YES. Some people believe that shorting shares of American companies is not patriotic or does not seem like the right thing to do. Hot Stock Trader: How to Pick Momentum Stocks with Ease and Simplicity Most stock traders know that momentum trading can be a very profitable activity. You can make big amounts of cash in a short period of time. Will the Stock Market be Lower in October? The stock market often closes a week in the middle of a "perceived primary-trend range." SPX closed at about 1,234 Fri, which is between a multi-year Fibonacci level at 1,253 (i. Discipline One of the great "secrets" of successful people is discipline and it doesn't make any difference whether it is manufacturing, processing, servicing or investing in the stock market.Before you can have that discipline you must have a successful plan and stick with it. 10 Tips For Creating Wealth From the Stock Market 1. Do not spread your money too thin. Boiler Room 7/17/00 On Friday or Saturday evening my wife gets a movie from Block Buster and after dinner we sit, hold hands and watch. This week she brought back one that I think every investor or anyone contemplating investing in the market should see. Fake Money Reach in your pocket and take out that big roll of bills. Depending on how many of them you have you feel pretty good.
|
| home | site map | Privacy Policy |
| © 2008 www.in-the-trade.com |