When did you reach a state where you were sure you could make a living from trading?
In 2017, I resigned from a state-owned enterprise and started full-time trading. I experienced the period of huge profits for novices, and then entered the period of huge losses. I lost all my assets, sold my car and house, lost my girlfriend who I had been dating for many years and was about to get married, and entered the trough of my life. After a few years of silence and learning, I picked up trading again, from painfully integrating with the trading system to achieving some success later.
Now I am over 40, it seems that I have everything, but looking back at the past, maybe I can also do business as usual, at least I don’t have to fight against human nature all the time, and I don’t have to lose a very precious emotion.
Do you regret it? I regret it a lot.
But these 7 years seem to be as long as a lifetime, and I have learned a lot of things that I didn’t understand before. Maybe everyone’s life has its own destiny, and whether it is worth it depends on the person.
I know that many people are very addicted to full-time trading, especially those who have experienced big gains and losses in trading. Adrenaline is secreted rapidly, and every second of trading is a stimulation that the ordinary life before could not bring.
1: Sufficient capital preparation
If you expect an annualized return of 40% from trading, and the annual expenditure is 300,000, you need at least 750,000 principal as a backing, and this capital should be spare money that is not urgently needed, in case of emergency. Trading income fluctuates greatly. Unlike a stable monthly salary, it is sometimes abundant and sometimes deficit. Without sufficient savings, it is difficult to maintain daily life. Therefore, trying to make a living by trading with only tens of thousands of principal is extremely risky and prone to losses.
2: Suitable trading environment
Full-time trading is far from being as easy and free as living at home. It requires expanding the scope of trading, in-depth technical research, and insisting on daily learning and review, which requires a quiet environment. The unpredictability of the trading market far exceeds the rules of the workplace. Even if there is a loss, the workplace still has a fixed salary guarantee, while the market is completely self-controlled. In addition, successful trading is inseparable from active and efficient learning.
If you don’t like to learn and reflect in your daily life, full-time trading may not be suitable for you.