LEAVE YOUR DAY JOB TO TRADE STOCKS?
For many people, trading stocks is more rigorous than a day job. But with today’s technology, coupled with ambition, patience, and passion, anyone can make a living from trading.
Higher volumes on the exchanges and technology have made it easier to start trading. In some cases, a minimal amount of capital will be necessary to get started. The markets are interlinked, so any person can trade at any time and any place. Even mothers.
However, trading has never been an easy path to riches. It can be difficult for an average person to remain in the market for a long time. Still, successful trading is a matter of searching the right market and the right opportunity. There are ways to achieve that.
The first option (and possibly the easiest) is to trade from home. But day trading stocks from home is one of the most capital-intensive realms because $25,000 is the minimum equity requirement for a pattern day trader, which must be maintained at all times. In the event the account falls below the minimum, the trader will be prohibited to trade until he restored the minimum equity level, which can be done by depositing cash or securities.
Other markets require less capital and lower barriers to entry. In foreign exchange markets, $100 (in some entities, $50) is the minimum amount of capital one should deposit in his account. With leverage, a huge amount of capital can be countered using this small amount of money. Also, the currency market is open 24 hours a day and five days a week.
In the contract for difference market, gains can be reaped for a fraction of the cost of owning the asset. The market provides high leverage as well. Using a CFD, the stock market can be traded. The stock is never owned, but the contract enables profits or losses to be captured from speculating on the underlying stocks or indices by mimicking its movement.
Another option is proprietary trading. What makes this type of trading appealing? Low-fee structures and training programs. Under this system, the capital is provided with corporate or leveraged capital to trade. The firm partially manages the risk associated with it.
Trading for a company may require working in an office during an open market. Certain firms allow traders to trade from home. Benefits of working for a company include being surrounded by other renowned traders, free training, reduced fees and commissions, and accessibility to capital and performance monitoring.
In terms of compensation, take-home pay is mainly based on performance, which is usually a percentage payout of a trader’s net profits after fees. Some licensing may be required in some instances. Different companies, different systems. Find one that is most suitable to your needs, personality, and circumstances.
Now, mind these three things if you want to leave your job to trade stocks: discipline, leverage, and trading. High leverage comes with higher risk. Know the risks involved and form a formidable trading plan.
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