Following the Trend, 2nd Edition

CHAPTER 13Trading for a Living

Most people reading a book like this either dream of trading for a living, or they are already doing just that. This chapter is meant both for those of you who do not yet trade for a living, and for those of you are, but are doing it wrong. Yes, in my view, there is a wrong way to trade for a living. Somewhat ironically, it is exactly this wrong way that most people outside the industry see as the ultimate goal. To trade your own money for a living. Having goals and big dreams is a good thing, but you should be careful in picking those goals. I hope that by the time you've finished reading this chapter, you will agree with me that dreaming about trading your own money for a living is the wrong dream.

How Much Does a Good Trader Make?

If you think that you want to trade for a living, the first thing you need to ask yourself is how much you expect to make. I don't mean your salary, bonus or dollar trading gains but rather in terms of percent. Sometimes when I speak at conferences around the world, I ask the audience for a number. I ask them how many percent per year, on average, a good trader makes. It's a very interesting exercise, and very telling. People who come from the financial industry or have been trading professionally for some time tend to have very different expectations from hobby traders.

The somewhat frightening situation tends to ...