Tue. Jun 25th, 2024

Can you make a living from trading ?

If some people start trading for their own account in order to benefit from an additional income, others make it their main activity. It is therefore quite legitimate to ask yourself if it is possible to make a living from trading. We take a look at this subject.

What is the minimum amount to trade ?

The minimum amount to trade varies depending on the broker chosen. With some brokers, it is possible to start with a deposit of 25 euros. That said, most brokers require a minimum stake of 250 euros. The minimum amount to trade also depends on the financial assets to be traded (stocks, commodities, crypto-currencies, etc.).).

You can to know more on the Saxo Bank website.

The value of the initial investment is important, as undercapitalization does not allow for a living from trading. Indeed, it is impossible for a trader to make quick profits with about 20 euros on his account. Of course, he may decide to take a high risk to accelerate his profits.

Nevertheless, this strategy is also likely to make him lose his entire investment.

The following example should help you understand the importance of the investment amount. With a capital of 100,000 euros, a trader can earn up to 5,000 euros per month. On the other hand, with 10,000 euros, his income will drop to 1,000 euros per month.

In order to earn this amount, he will have to use a higher level of leverage, which implies more risk.

How to become a profitable trader ?

It is not enough to to bet large sums of money to make a living from trading. It is also crucial to define your trader profile. Indeed, you will not adopt the same strategy depending on whether you are a position trader (holding assets for several weeks or months), a swing trader (a few weeks or days), a day trader (a few hours) or a scalper (a few seconds).

Your investor profile and your risk profile will largely determine the type of trader you are.

On the other hand, the profitability of trading depends on understanding how the financial markets work. For example, you should know that you should not buy when a market is bearish. In this case, you should rather focus on selling.

Otherwise, you risk losing money. In short, it is your knowledge of the financial markets that will enable you to build an effective trading strategy. To acquire one, do not hesitate to follow a training course for traders.

It takes at least 6 months to become familiar with the trading process and to learn how to avoid the traps that can make you lose your money.

In addition, it is essential to take a step back and adopt a long-term vision. This technique will prevent you from suffering the negative effects of a trend reversal.

How to become a profitable trader?

How to make a living trading ?

Trading is not for everyone. It is necessary to do a lot of work on yourself in order to make a living. Specifically, you should avoid being guided by your emotions, as this can lead you to make rash transactions.

A good trader is capable of discipline and self control. In addition, you need good analytical skills.

In addition, you will need to apply several tips to hope for the best live trading. The first is the choice of the broker. Opt for a broker whose seriousness is recognized.

Ideally, the trader should provide you with everything you need to trade (trading platforms, technical analysis tools, etc.).).

In parallel, it is recommended to establish a trading plan and to stick to it. This will allow you to know exactly what you need to do in a given situation and prevent you from making rash decisions.

Also be careful with leverage. If you are new to trading, it is not advisable to exceed a leverage of 3. For their part, experienced traders should limit themselves to 5.

Do not neglect the use of stop loss. With this tool, you can limit the risk of loss to a predetermined amount if the market moves against you. In other words, the stop loss will protect your capital and prevent you from losing everything. By the way, only bet a capital whose loss will not put you in an uncomfortable situation.

Finally, consider subscribing to financial news sites. By following them daily, you will be able to seize the best opportunities.

By admin