Beginning traders and many experienced traders believe that their short-term objectives must immediately be met failing to understand the benefits of trading in patience which is actually better. On one hand you are urgent in your feelings that you must succeed. This sense of urgency causes you to put a lot of pressure on yourself. That pressure can cause you to make some serious mistakes when a trade is going against you. On the other hand, you subconsciously know that trading can’t be all that easy. You know from reading, studying, and hearing about other traders, that even though you are experiencing losses, if you are persistent, ultimately you will become a successful trader. Others have done it, why not you?

If you want to succeed in this business, you have to be tolerant in trading. Because sometimes trading successful takes a lot longer to achieve than imagined when first looked into becoming a trader. Some traders take many years of disappointment before they finally become successful. Only those few who never give up tend to achieve success. All businesses experience losses. I cannot think of a single one that can escape them. Yet losses in trading seem to loom larger than losses in other businesses. I believe it is because in trading the responsibility for losses all fall on you, the trader.

In the long-term, any individual trade is not very significant. At any point in your trading career you have to avoid placing too much importance on the outcome of a single trade. You must not allow yourself to feel badly about yourself when you lose, or feel good about yourself only when you win. Strive to keep your emotions and your self-image separate from your trading. Doing so takes effort, but it is an effort that pays off in the long-run. If you allow yourself to feel confident and successful only when you win, losses can eventually destroy your image of who you are. Keep in mind that even the most seasoned traders have losses and went through a test of patience of trading.

An experienced trader knows that in trading, there are more things beyond your control than there are things within your control. Realizing that trading is an art form, and not rocket science, helps you to have the right perspective on each single trade. When patience is coupled with proper risk and trade management, losing or winning on a single trade is not going to make or break you.

Instant success has mental and emotional advantages, especially for a beginning trader. Realize that it requires patience to become a successful trader, just as it can take long to become successful in any other business. You need time to build your trading skills. You need time to acquire experience in the market. Experience and skill ensure that, over the long term, you will become consistently profitable. Until such time as you are able to paint the big picture, it is crucial that you manage risk and manage trades so that what happens with a single trade has little impact on your account balance. The experience of trading over the long-term allows you to learn how to deal with adversity and to build up the skill-set you need to trade in a variety of market conditions. Time also enables you to develop as an intuitive trader, one able to “feel” the market.

Living expenses are only one part of the economic equation. Next you must consider how much trading capital you need. This is the money actually facilitate trading, in other words your account balance for trading margin, and the money you will be spending on data feeds, software, and internet access. You must account for this discretely; you cannot start eating into your daily living expenses money just because you took a bad trade and need some more margins.

The amount of trading capital you require will depend very much on your trading style. To day trade the US Stock Markets for example, you must have at least $25,000 in your account, so budget for $30,000 to allow for positions moving against you (if you fall below the $25k minimum even briefly, your account can be frozen for up to three months). If you are holding positions overnight you may manage with a lower balance but bear in mind your buying power and consequently returns will be reduced.

If all this is starting to sound exclusive, well it is. There’s no two ways about it, you simply cannot survive long term as a trader if you are under funded.

Again the conditions for both hardware and ISP will depend largely on your trading style, but if you’re relying on a 100 MHz Pentium II and a dial up service, you’re setting yourself up for failure. So budget for quality equipment, budget to keep it up to spec, and budget for some repairs too – expect the unexpected.

A few weeks really aren’t enough time to know if you’re going to succeed though. An ideal next step then is to cut your day job hours to part time and trade maybe two or three days a week. This way you know you have some money coming in, you get to trade for real, and if it all goes horribly wrong you are probably better placed to get back into full time employment than someone who quit the working world completely.

The option of part time work is a luxury many of us don’t have however. So does it have to be all or nothing – trade or work? Why not keep the day job and trade outside your working hours as well. If you are trading and end of day strategy, then this is easily achieved by doing your research in the evening and placing the appropriate combinations of Stop and Limit orders with your broker. For day traders, certainly practicing is easier if your intended market is not your home market, for example if you want to trade the US and you live in the UK where you can come home and paper trade in the evening. There are other try before you buy options open to the day traders who want to practice trading their home market outside of normal hours though. eSignal allows you to download tick data for any symbol and play it back in real time or speeded up so you could trade the whole day in an hour.

There are a few non-financial aspects to believe before going full time with your trading. If you have a family, how will the change impact them? Make sure from the start that everybody knows the ground rules and that you can separate you’re working time from your free time effectively.

Trading full time can give you huge amounts of free time, but if you have nothing to fill that time with you can quickly lose the plot – I’ve seen it happen and it’s not pretty.

Nobody can tell you if trading for a living is for you, it’s something you have to find out for yourself.

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