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WHEN CAN YOU START TRADING FOR A LIVING?A user asked me an interesting question : "I’ve been studying trading for a while, I have good and bad days now but i am positive. I can feel my experience is growing and I like trading. I’m trying to figure out when I should start trading full-time. How much income should I expect to earn from trading?” Today’s topic: At what point can trading provide your full-time income? This is a very common and excellent question to ask yourself in order to define your trading goals. An overview of this lesson: 1. Prerequisites to trading for a living. 2. Capital requirements. 3. Getting this capital and how to manage it. 4. Conclusions and recommendations. Topic in focus: After acquiring knowledge and experience trading, you feel ready to take the next step towards financial freedom. When should you leave your job and start trading full-time? Beginning traders typically transition through a common cycle of experiences: Desire: Get rich quick. The beginning trader starts with little to no knowledge or experience. Reality: The beginning trader loses some or all of their starting capital (most of us have been here). Quit or Grit: Many beginning traders quit. Those who persevere with passion and motivation push forward. Structure: Continuous learning, testing, and gaining of experience. Confidence: Results confirm that you have the skills necessary to profit long-term. Question: Is it time to start trading for a living? How much monthly income can I reasonably expect to earn when trading for a living? How much starting capital would allow me to trade for a living? Let’s do the math: Talking about Forex or Crypto, Stocks or any other market, by utilizing a good trading system, money management, and emotional control, an average monthly profit target of 5-10% of your trading capital is achievable. Requisite trading capital: To understand when you can make a living from trading full-time, living expenses and tax/reporting laws should inform your monthly profit objectives. Let’s look at two simple scenarios: Regarding monthly living expenses, Trader A requires $1,000, while Trader B requires $5,000. With $1,000 in monthly living expenses, Trader A requires $10,000 – $20,000 trading capital. With $5,000 in monthly living expenses, Trader A requires $50,000 – $100,000 trading capital. Is this too much, or too little perhaps? Let’s examine this and explore solutions if you lack the requisite starting capital. How to increase your trading capital: With a focus on expectations vs. reality, psychology, common issues, and solutions, we examine two scenarios: 1. You don’t have the requisite starting capital but still expect to achieve your monthly profit objectives. 2. You do have the requisite starting capital and want to start trading full-time immediately. 1. You don’t have the requisite starting capital but still expect to achieve your monthly profit objectives. Expectations: You have $1000 – $5,000 and expect to make 100% profit monthly which you will use for living expenses. Reality: Stop. Get this out of your head. While you may be able to achieve such results one or more times, with such high risk it’s only a matter of time until your deposit drops to $0. Psychology: Unreasonably high expectations inevitably lead to failure and bad self-esteem at best, denial at worst. Without a high morale, you may well decide to quit trading when you’ve only just started down the road. Has this happened to you? Please mention it in the comments if you’d like. You’re not alone. Solution: Patience! If you don’t have the requisite starting capital this is not the time to leave your job, it’s time to accumulate. You must keep your income stable until you grow your capital to a point where 5-10% growth represents your monthly profit objectives. There’s more (very simple) math in the conclusion of this article regarding how long this will take so keep reading! 2. You do have the requisite starting capital and want to start trading full-time immediately. Expectations: Earn 5-10% of your trading capital per month. Reality: This is achieveable and sustainable BUT – you must be prepared for DRAWDOWN. What is drawdown? Drawdown is the unavoidable period when your capital diminishes because your strategies aren’t giving positive results. Problems: Every legitimate trading system/strategy has drawdown. Are you prepared for it? Growing your capital by 5-10% per month on average also includes months where you earn 1%, -5%, -10%. Even -20% is still a valid drawdown for any functional system. On the flipside, there will be months where you’ll surpass your monthly objectives and maybe earn 15% or 20% instead of 5%. Psychology: Are you prepared to see your starting capital decrease? These situations can induce volatile emotions and push you into making mistakes like panic trading. Remember that emotional control is an inextricable part of professional trading and this skill is honed with practice and patience. Solution: If you’re just making the transition to trading full-time and want to use all of your capital, consider backing up a bit. Pretend that you only have part of your trading capital, perhaps 25-50% of it. Use only an amount which will not impact you emotionally when you’re at a loss. Using this reduced starting capital, attempt to reach your monthly goal of a 5-10% increase. Use this time to train your emotional control and strategies. Patience will pay off here. By the time you reach your requisite starting capital you will have more experience, improved emotional control, and greater capital. Using this method will make everything easier. Conclusions and Recommendations: A stable 5% average growth will double your starting capital in 15 months. You would get to 10x your starting capital in 48 months – that’s 4 years. If it sounds like a lot think about this – in 4 years you will get your trading capital and a HUGE AMOUNT OF PRICELESS EXPERIENCE AND NEW KNOWLEDGE. Because over these 4 years you have been trading with a proper money management technique, you have learned multiple trading strategies, but also have gained a considerable amount of trading experience that will aid you in the future. How about an average of 10% growth? An average 10% monthly growth will double your starting capital in 7 months. A sustained 10% growth per month will allow you to make 10x in 25 months. That’s only 2 years. So, to keep it simple, with a targeted growth of 5-10% per month, it should take you 2-4 years until you reach the capital which will allow you to start trading for a living. Is this an exact estimation? NO! It depends on many things, but the main factor is yourself. You will have the time to learn about trading, create your trading plan, fine tune your strategies and train your emotions. You will face drawdown periods and your emotions will make you doubt your system. Again, money management is going to play a key role in your journey to your goal. For some people it will take less time, for others it will take more. It depends also on your available time, your dedication and even your natural abilities. For some it may be easier, others will need more training. But the ones who consistently use good trading practices will succeed. Recommendations. As usual, my personal creed is that you should focus on safe trading. This will allow you to reach your desired deposit size, even if it takes a little longer. Trying to make super profit will increase your risk, and increased risk is the path to liquidation – you’ll blow up your account eventually, it’s just a question of time. I notice that more and more people are losing patience and want to have results overnight – of course the crypto bull run has helped feed this type of thinking and it is no secret that I am very much against it – impatience and rushing into trading pushes you into making mistakes, taking bad trades, and panic trade without a clear plan. This can only lead to disappointments. And it does, I see it over and over again. I suggest that you follow 3 targets while building up your deposit which will allow you to make your living from trading alone: 1. Protect your deposit. 2. Earn stable income in the long run (5-10% per month). 3. If there is an opportunity to make extra profit, use it, but keep following proper money management. To make 100, 200, 300% per month, it’s not such a cool thing if the next month will get you to 0. But to make even 5% month by month, year by year is the path of a real professional. I have a few questions for you: Do you have a goal to trade for a living and be able to do it at your own pace? Do you think a 5-10% average growth per month is an achievable target? Would you be satisfied if in 2-4 years you would be able to trade for a living – or is it too slow for you? For those who trade stocks – do you think this is possible? Slower? Faster? Do you have anything to add to this post? Please share your answers in the comments!
BITSTAMP:BTCUSDEducation
by DLavrov
122
BTCUSD GANN 1D 3/25To square the above chart, drag the price scale down... How I square a chart from peak to low. Result: 1) Set Lines & Fib Time Zone (the middle line use the fib retracement tool, the .5 fib, then manually align a horizontal line) 2) Set Gann Square Fixed from center. To peak. it's not square... later step. 3) Set Gann Fans from each corner to opposite corner. peak to low/artificial corners created by horizontal and vertical lines. 4) Square The Chart. Line up the green and white X's (drag the time and price scales, fine tune in settings Price/Bar Ratio) If you sync your chart's drawling that have multiple time frames you can align each time frame to the same square. Your ratio changes depending on your res browser/ect. Same reason why this chart is not square after publishing.
COINBASE:BTCUSDEducation
by Mikelikescrypto
3
Don't you want to make money?It seems that market opportunities are everywhere. However, for this kind of profit under ideal conditions, it is just like the fuel consumption in the laboratory of a car. I often ask readers, what is the purpose of your speculation? Most people would say make money! Yes, you are here to make money, but after everyone enters the market, it is like the gambler who has played chicken, completely put this target behind him, in the 7*24 hours market, rest has become a waste of time, there will be fluctuations at any time, especially the people who do contract, see 1% rise and fall has been excited. Making money is not the point. But behind the madness, you may forget the law of things, money is not proportional to time. Boxing champion tyson is paid millions of dollars for a single appearance, often ko opponents in a round, so some people calculate his income in seconds; Farmers farm, a year dividends, and to see the day to eat. So there's no correlation between the time you spend and the benefits, so what are we doing every day in this market? Is the atmosphere, in our side, around a variety of people, every day in the community, listening to a variety of ancient legends, the grassroots overnight rich myth, let a lot of people think -- I can do it. This tension, this stimulation, this release of dopamine, makes it impossible for us to stay calm. As for the progress brought by science and technology, we can neither escape nor reverse it. However, it is undeniable that science and technology have changed our lives and brought about many negative problems. Social networks have been developing in a variety of controversies, and the emergence of WeChat subverts our traditional way of social communication. Last century 90 time, fry a stock to be in "sit in charge of" times, at that time mobile phone just entered the life of common people, "banker" it is the means that relies on word of mouth more, pass through large family room, retail retail hall, true true false news spreads go out; Of course, the main cattle, also through the formal media above the stock critics induced retail, zhao xiaoyun's most classic statement is that "baoding qingshan not relax." Nowadays, such local methods have been disrespected by young people. Developed social networks make it easy for "producers" to cut leeks, and fragmented reading also brings us the challenge of independent thinking. More people hope the analyst is direct some, do not listen to your logic, do not have time to listen to you give me lecture, tell me to buy or sell! Is this very realistic? Because of this demand, so "makers" to its good, using a variety of platforms, community, dissemination of information, and even let some big V platform, easy harvest leeks. It's true that there are some people who can make some money in this process, and their participation helps to facilitate the process. When you are encouraged to keep trading, do you see many people lose all their money? Having said all this, the point I want to make is this: in an extremely speculative market, it is crazy to be a pig in hot water, trying to maximize profits may not be a wise choice. Trading is not the whole market, and wait and see and wait, if you hope to earn every penny, just look at their own money bag enough big enough capital enough!
BITSTAMP:BTCUSDEducation
by peter-l
That's the magic number that will determine the direction of bitMany people study the trend of bitcoin in the hope of finding some rules. Some rules can indeed serve as a reference for the market trend. Today I'd like to share with you some data that I hope will help us to see the situation in the current situation. In bitcoin's monthly chart, we see that the currency has had two big bull markets and two big bear markets in the past. I found a magic number in the fall process, the rally did not exceed 2 months of circumstances. And bull market, also did not continue to appear more than two months of adjustment. The conclusion is: the K line did not exceed 2 negative lines in the upward trend adjustment, and did not exceed 2 positive lines in the down rally. This data may have a good reference value for us to judge the future trend.
BITSTAMP:BTCUSDEducation
by peter-l
Comparing the 2014-2015 with the 2018-2019 bear markets!Fundamental analysis only! TLDW; What makes the 2018-2019 bubble more bearish: More scams (shitcoins - ponzis - cloud mining scam - giveaways) Big shitcoin increase (too many shitcoins - all fighting each other for liquidity) Shitcoin inflation (Too many premined shitcoins / ICOs - no fairness) Easier to short (Way easier for people to short BTC etc, because they don't believe in them - sucking fiat value out) Cash settled futures (Big players got in early and had this all planned - Also Cash settled futures suck liquidity from spot markets Lots of new scam exchanges and fake volume (Some of these exchanges might be stealing coins from people or trick them to buy scam coins) Bubble in a bubble in a bubble (BTC - ETH - ICOs all fueled each other. First Bitcoin created interest in Ethereum, which then created interest for ICOs, which held Ethereum, which went up and then people took profit into Bitcoin - Essentially a leveraged bubble!) ETH. FIAT and Stablecoin pairs (Bitcoin's price is partially affected by people using it for speculation. Bitcoin also drives this market. So when it is used less / has lower price, shitcoins deflate too! Also arbitrage sucks money out, as there are too many pairs / exchanges, so liquidity is fractured) Dummer money got in (Like Crypto Cobain said, the IQ of people getting in after each bubble is lower... Why? Because back then it was harder to get into Bitcoin. People had to be more technical and educated to understand it). Mt. Gox coins being sold in the market (Mt. Gox 'locked' coins started hitting the market, something that didn't happen in 2014-2015) Back then the market cap was much smaller and there way more lost coins as a percentage (also GBTC had just launched and its 'locked coins' were a big percentage of the total amount) Stablecoin wars (fractured liquidity and people selling 1$ for less - Millions lost by retail that was gained by malicious players) Hash wars (Bcash split - liquidity crunch as well as Bitcoin being dumped for hash power) Finally in 2013 there was an 80% correction. So the 13 to 1200 rally wasn't done in one go. It took a big break before the last big rally. What makes the 2018-2019 bubble more bullish: No Mt. Gox collapse - No Willy (the rally was legit, I don't buy the : Bitfinex printed Tether out of thin air FUD). So the rally was organic and real, without having a big exchange collapse. More Liquidity and on ramps (many good, regulated and unregulated exchanges, along with many other ways to buy Bitcoin like ATMs, vouchers, etc) Improved custody and security (Hardware wallets, custodial solutions like Gemini, Coinbase, BitGo and Casa Hodl) Many OTC desks and Indices (Easier to buy/sell big amounts of coins without affecting the spot market a lot) Big boyz getting in (Bakkt, ErisX and even the probability of an ETF being approved) Crypto funds (back then there weren't many, if any approved crypto funds. Most got approved in 2017-2018-2019) Regulatory clarity (in 2014 there was a lot of fear Bitcoin could be banned etc. Now it is legal and clearly defined in many countries like the US, EU, Japan and South Korea) Better mining (More efficient mining, along with liquid options to hedge, more decentralized and with bigger-long term players getting in) Less inflation (Most big coins like Bitcoin, Litecoin and Ethereum have smaller inflation rates than they had back then) Financial products (Bitmex, Cryptofacilities/Kraken, Huobi, Bitflyer, OKex, Deribit and LedgerX offer liquid futures and options products) True believers own more (The hodlers, the hodlers of last resort, the ones that truly believe in this game, who are now more certain than they were back then - forks also helped true Bitcoiners to increase their Bitcoin holdings by holding Bitcoin!) 25-30B got into ICOs (Just the shitcoin market alone bottomed at 40B, out of which 2.5B was in stablecoins. Some of it has gotten back into Bitcoin or shitcoins) More talent and money (People that work in this industry probably reinvest some of their gains back into the market) Way more good educational material (Back then our understanding was not as great and good information wasn't easy to find) Shitcoins provide a lot of free marketing and education to Bitcoin by proxy, as well as provide Bitcoin with a clear use case - Shitcoin speculation! Crypto borrowing - Use Bitcoin/Shitcoins as collateral to get fiat, without having to sell your coins! Crypto lending - Earn money by lending your coins/fiat for people to trade with it (Bitfinex, Poloniex, Liquid) Bitcoin/Shitcoin Utility - Joinmarket, Lightning, Maker DAO, Masternodes, Staking (Holding crypto to make more... Crypto by providing specific services, essentially restricting the supply) - I truly believe that Staking (DPoS, PoS, Masternodes etc will drive the next bubble really high. Projects like Loom, Maker, Edgeless, Augur, Dash, Ren etc make me believe that there is a lot people that will get in because of this. Decentralised trading tools for traders (Bisq, Liquid, Ren, DEXs, Stablecoins) Even more lost coins, Bitmex insurance fund growing and ICOs still holding ETH (lol-lol-lol) Central banks have take risk away from the markets, by lowering rates and printing a lot of money. But this has also lowered the returns investors expect... Which makes many investors turn into more risky investments. Why risk 100% of your capital for 5-10% returns on junk bonds, and not risk 100% for 1000-10000% by just doubling/tripling your risk? More QE is coming and the total money supply has significantly expanded since early 2015.
BNC:BLXEducation
by BitcoinMacro
Using Long Term Trend Lines in CryptoI wrote this one 8 Dec 2018, but because i wanted to add more things i kept it on hold in a hidden post. I just did not have the time to complete it, so i will post it as it is now and based on question/comments, i might make a part 2 on this post. Every week i keep seeing this long term LOG chart and i simply just can't stand it anymore. I know most people think TA is about drawing some lines and we can simply trade based on those facts. In many cases that is very true, no doubt, it is just not that simple. I have mentioned many times that i simply do not look back at the period before 2017. I am 100% convinced without a second of doubt, that this long term chart of Bitcoin' is as useless as they come. There is one very simple reason for my assumption, the market dynamic (the buyers and sellers) are completely different back than. - The percentage of professional traders is so much more now than back in those days. - HODLing days are over, who still has the confidence to keep 100% of their portfolio in crypto. - Maybe the most important fact of all, it used to be buy and sell only, nowadays shorting has become a defining factor in this crypto world, do not underestimate this for a second. - Leveraged trading, is much more in 2018 than it was in the past. Of course there are levels where certain early investors, who were smart enough to sell (at least part of their portfolio) during the highs, who might think; "what the heck, lets try a little bit again around 1.000/2.000/3.000 or whatever price they think might be worth the shot. Because they remember certain support levels were important to them back in those days. Current support levels are mostly created because buyers step in, but just as much levels where bears take profit on their shorts (which are also buy orders). Since we usually see shorts squeezes at certain levels, it is maybe even safe to say that the bears determine the support levels nowadays. Just look at how many people kept adjusting trend lines the past months and referring to past support levels around in the 5K and 4K levels. But i think we have all seen what value these levels had the past month, absolutely nothing. They all cracked like it was nothing. Now i am not saying i knew it would go like this, i never expected it to get dumped so much so fast. But it was quite obvious that a break of the 6K would be very bad for the market since it was a huge support for 8 months. Throughout 2018, how many times did we have breakouts on those descending trend lines from the 20K level (yellow circles). The only solid useful line i can see here, is the blue one. For the rest, what is the value of them? You need to look at them upfront, not in hindsight. Crypto is a very young market which still has to mature. So it will take many more years to achieve that level. Only THEN can you think of giving real value to these long term trend lines . The best example is the break of a few weeks ago. Not matter if you were a bull or a bear, but the 6K support zone held as support for more than 8 months. Would you really try to buy long term based on that trend line? Or was it quite clear the bears had won the big fight and we would start to see a crash. Now my message is not that it is pointless, there are enough (mature) assets where it does work, i just want to give the message, do not stare blindly at these long term trend lines . Maybe use them as an extra tool to confirm your analysis, but nothing more than that. I talk with several professional traders on a regularly basis, there is not even 1 of them that even mentions these trend lines . To put it in more simple words, when looking at a chart (no matter which time frame) it's like one big story. And like each story it is divided in chapters. What i am trying to say is, do not mix up the different chapters. For example, the 6K triangle is a chapter, or the current possible triangle as a chapter as well. Many of you follow several analysts here, we all make good, decent and bad analysis, but i don't think i need to remind you what catastrophically bad predictions have been made based on these trend line . I don't want to step on any toes, but i just had to get it of my chest, because it's not fair towards the less experienced traders :) Previous educational post: Another educational post, worth the read, makes you understand my message here better; Don't forget to give a like if you appreciate this :)
BITSTAMP:BTCUSDEducation
by botje11
92
Wow! What a dogi!! Incoming ... Big Candles!I first published this chart set up via screen shots posted to twitter. Feb 23rd, 2019 See @golftothecore on twitter. This setup was posted just after the last giant narrow dogi with long wicks above and below (red dogi). I added the "slam down zone" on March 8th. Again, check the twitter. This chart set up was a word to the FOMO crowd ... Exercise due diligence and wait for the market to come to you. Make your own f**king coffee, skip Starbucks, and put lottery money in. Stop buying scratch offs and DCA BTC at the bottoms of long red candles ... BTC fell right into my first purple zone. Incoming, Incoming! Giant candle! This is the first time I am publishing to Tradingview. Cheers, Jeffrey Jay Moore
BITFINEX:BTCUSDEducation
by toeintocrypto
XRPBTC Consolidation - Breaking UP or DOWN?? Been observing this ticker for a few days now, notice on how the trendlines are drawn: - From higher high to lower high to lower high - From lower low to higher low to higher low The two trendlines looks like they are converging to a single point. This is a consolidation pattern of price action and price is about to break out from the pattern. On a Daily Time Frame, some of you may be able to identify the "Inside Bars". At this moment, market watchers will be asking this Golden Question - Is it breaking UP or breaking DOWN? One group of traders I know, we call them the breakout traders. They will place their Buy/Sell Stop Orders a certain price outside the two trendlines and anticipate to get in to catch the move, either up or down it doesn't matter to them. There are another group of traders who are directional, they do their analysis and "place their bet" on buying or selling the market according to their market bias. They get the best entry price but at the same time, they are exposing to the risks that are far more worst if the market goes against them. What I prefer is to wait and anticipate where price is heading and identify its turning points. Using methods such as Harmonics Patterns and Supply Demand, I am able to mark out the price area that price is likely going to turn, and it is at these areas that I am interested to take my trades to protect myself as i have a good risk management. Which are the best methods? There is no right or wrong answer, I recommend to choose the right strategy that suits your personality and your lifestyle. Do like, share and follow me for more analysis like this. We believe in sharing and build a conducive environment for all traders.
Education
by TradeEye