In the aftermath of the financial crisis, traders have lost their good reputation. Whereas ten years ago, traders were seen as highly professional and smart business men, nowadays, they carry the somewhat dodgy reputation of being a gambler.
Trading, however, is far away from casino gambling. Although having a bit of luck can’t harm, trading requires skill, experience and a fundamental understanding of how markets work. If you have ever though about bringing your hobby or side income to the next level, read on and you may decide to take it easy…or not.
Day-trading can make you rich, but it most likely won’t
Many people dream of getting rich trading the financial markets. During the heydays of the late 1990s, traders made incredible amounts of money buying and selling internet stocks. These days are over. If you plan to get rich, better try something else. Don’t take out that 500k mortgage loan, expecting to pay it back with your trading profits.
Also, the idea of working from the beach, sitting in the sun and drinking coconut-milk, is ridiculous. You need an office where you can focus, and keep your equipment. Moreover, you will need a high-speed internet connection, that’s probably not going to be available at the beach. That’s why most day-traders work from home, or in a shared office. However, an office will cost you money, and depending on the city you live in, that won’t be cheap.
Working alone can be frustrating
Working independently is certainly not for everyone. Especially if you work from home, you’ll have very little social contact. No colleagues, no people around, only you and your business. That can be quite frustrating, especially if you are an extroverted person. Hence, before you go down that road, reflect on whether or not that really is your thing.
On the other hand, there is the possibility of renting a shared office or a coworking space. That’s not available everywhere though. Moreover, if you still have to go to the office everyday, you might as well work for a company.
Another aspect that will affect your social life is that day trading will without a doubt have an effect on your mood. If you lost tons of money during the trading day, that won’t make you happy. Very few people have the ability to keep their trading business far away from them emotionally.
Making a living is tough; it’s not impossible, but tough
Making a full-time salary while trading is certainly not easy. Sure, a lot of traders make a quite significant side income, maybe you do, too. However, replacing a full-time salary is a totally different story. Even if you make it in one month, who says you’ll also be that lucky in the next months.
Very few people actually really make a living only via trading, even very good traders struggle. It’s a long journey, and you’ll start at the bottom. The easiest trade to learn will be your starting point, but that’s not going to be enough if you want to be successful. As a day-trader, you consistently have to learn and stay updated regarding the recent developments and new trading instruments.
Day-trading will affect your health, in one way or another
Being constantly under stress comes with a variety of health consequences. Staring at small numbers on a screen for thousands of hours over the course of years will have an impact on your eyes. Moreover, the adrenaline will affect your blood pressure in the long term.
Besides that, if you are not successful over a longer period of time and are losing a substantial amount of money, that will bother you. It’s different if you are using your own money than being employed by a company. Your psychological well-being may suffer from that.
At the end of the day, trading can be exciting and profitable. But that doesn’t mean you have to do that all day long. If you have what it takes and you want to give it a try, go for it. However, if you are not sure, it would be better to continue trading as a side gig. You can still put in more time if you see things are actually going well.