Trading For A Living – A Practical idea?

Whether trading can be done for living, has always attracted the interest of active traders and people in general. I firmly believe that trading can be done for living provided certain conditions are fulfilled. Below are some of the factors that play a significant part in deciding whether a trader achieves success in his goal of making a living from trading the markets.

1)Experience – As trading is all about probabilities and trading psychology, more the experience better are the chances of success in earning a living out of trading. One should have sufficient experience (years not days), that too should come out of operating in different market cycles (bull and bear markets). If you start to trade for a living from day one, you will fail badly. This point is basically about finding a system and being at ease with it.

2)Capital Requirement – Returns from markets are variable, but let’s take a return of  10-15 percent CAGR for a conservative estimate (some traders will laugh at this number, Larry Williams made 11,376% return in World Cup Championship of Futures Trading!).Your living expenses should be less than 10-15 % return on your capital. As living needs are different for different people, you need to do your own math to find the amount of capital required, before you take a step towards making trading, the only source of income for yourself. This point is all about money management and setting realistic expectations from the markets.

3)Psychological Challenges – Apart from dealing with the madness in the markets, an individual trader has to face psychological pressure from the family and the society as well. Trading is considered synonymous with gambling by a large section of “non trading group”. They will surely ask very difficult questions once a new trader takes up trading as a carrier. Other thing that adds up to the psychological pressure is debt. Make sure you don’t have any outstanding loans, it should be paid off  before you start trading your own account. In short, try to minimize the noise and distraction to achieve a focused approach towards your goal.

Odds for achieving success in trading become quite favorable if above conditions are met however experienced traders can work in very demanding conditions as well (Larry Williams made that kind of return in 1987 when many traders went bust). Trading is like a business, just as millions of people are running their businesses successfully, you too can be successful. Quite a lot of businesses fail, you too can fail in trading. Understanding and managing the risk is all you need. Finding your own space in the trading arena is very important, and that takes a lot of time and effort. The sooner we realize this, easier and less stressful, will be our journey towards our goal.

Life (as well a trading) is all about probabilities, when certain things align in certain ways, things tend to look simple. We find an effortless way around things that once seemed complicated, demanding and impossible. Trading for a living is much harder than people assume.

Good luck.

Related Post
Reposting the Holy Grail Post in text format


  1. @Anonymous aka Vineet
    Hope you find some ideas mentioned in above two posts useful.It's difficult for me to comment specifically regarding your trading.You said you have 2 years full time experience?.If that is so then you are definitely better placed than the majority of new traders.

    I suspect it is a problem of capital and confidence in your trading.As I mentioned above in point number two.It's about money management and setting right expectation from the markets.Adequate capital is required to take care of living expenses while trading.

    You also said "Now dont want to do the job again but to make a living thru trading only."
    Is it because you are passionate about trading or you a demotivated about job? Find the "real" reason for the above statement, that will surely lead to better decision making of what is good for you at this stage.

    Sometimes it is better to lose a battle to win the war!
    I wish you success in life,stay in touch,looking forward to hear from you.

    Cheers :)

  2. P.S.
    Is the new blog background color a product of market mood? :)

  3. @r m
    Thanks,I thought the chocolate color will be appreciated by a "sweet tooth" like you

  4. @ Anuj & friends

    Good morning,

    Happy trading.

  5. hi,
    nice and succinct!
    appreciate your efforts in educating people like me..

  6. @Shazia
    Hi...after a long time,hope you are doing great..

  7. hi,
    i am doing good.. i never give up till i do :P
    thanks for asking.. hope you are good too!

  8. Hi Anuj,,I have been following u for some time now...Great insights...I had the same idea of trading for a living since Oct'10..It came out of 2 reasons...1)I lost the job (well paid,they say)..2)make a living..followed many so called champions of trading..lost heavily in 3 months (amount will be disclosed personally..)but what started as a means of making fast money has turned out to be a real i dont want to go for a job..but seeing my two lovely kids asking for moon(the things which i bought for them when i was in job)is putting me under sever compulsion to go for a job..but my passion towards trading is not allowing me...But i have started following some wise peoplelike you,Ilango etc and am now confident of making trading my ULTIMATE profession..but definitely not at the cost of my children's smiles...So temporarily go for a job...ultimaately become a smart trader...That's it about me...Keep posting sensible,realistic info like these in ur blogs which will help people like me...

  9. @Suresh aka Earn and Share
    Thank you for the encouraging words.

    "what started as a means of making fast money has turned out to be a real passion",that's how my journey started as well!

    Losses will always be a part of trading,key things is that we learn form every rupee we lose.Taking up a job is a sensible idea at this stage.Even I may at some point in time.

    Let me tell you how things have changed for me with experience. These days I don't take long to plan my trade, I have got all the time. I can take up a job and trade,I am sure I will make better returns from trading that way.I can very easily switch from day trading to swing trading to positional trading now.You will be able to do the same thing with more experience.Job will give financial stability and reduce the psychological pressure that trading creates.You will emerge as an ultimate winner,just don't lose touch and interest in trading and investing.You may choose not to put money and trade ,but continue to read and research about it.
    All the best, stay in touch.
    Cheers :)

  10. You all have stopped trading or what now?