Become a trader on your own account

Trading on your own account, a difficult freedom to acquire

Trading on your own account, a dream of freedom

For a few years I have wanted to become a trader on my own account, a desire and also a fantasy, the idea is to acquire a form of freedom, to really be the master of my own destiny, to no longer depend on a boss or a hierarchical system, etc.

I think that what attracts me to trading the most is that it is a fully egalitarian system, where a decision to buy or sell has an immediate consequence, a sanction or a reward. There is no social inequality, we do not succeed in trading because we can pull strings, have a wealthy family or something else, it is tenacious, nothing is biased. There are no excuses in trading, except for the bad traders who look for a scapegoat (the broker...) in order not to assume responsibility for their choices. And yes, when we press the button to buy or sell, nobody forces us to do so. Then there are the vagaries of the market. A stock exchange may completely stop publishing quotes in case of a technical problem, but this is part of the "game", it is an accident which has as much chance of generating a gain as a loss for the trader, just like the famous “stop hunts” by brokers which is a myth (because a price movement that triggers a stop loss for one trader may trigger a profit target for another trader).

How to become a trader on your own account

The main difficulty of becoming a trader on your own account, is acquiring enough working capital to expect to survive for a few years in case of bad results and of course to earn some income to live on. Using leverage should be avoided, it holds no interest when you have capital, leverage is for small accounts... The more money you have, the less risks you take... There are no miracles, you need capital, a lot of capital and even more in countries where financial market earnings are heavily taxed by the state. Of course capital is of no use if you do not have a money management system that you adhere to, a decent success rate over several years, gains on a regular basis in a bullish or bearish market, etc. in short, there are a lot of conditions to fill... the dream of freedom is not attainable overnight.

How much capital is required to become a trader on your own account?

Do a small simple calculation: you need an income of €2,000 per month to live decently (the median wage in france is € 1500). You therefore need to make €4,000 per month or €50,000 per year approximately.

If you are a good trader, you have a system that seems to work, you have a return on your capital of 15% per year, let’s say 10% to be conservative: you need a trading capital between €300,000 and €500,000 to be able to hope to live off your trading without finding yourself on the street at the end of 5 to 10 years.

Of course, with €100k, you can begin to do things, but you should not delude yourself, you will not have the leeway to accumulate a few mistakes...

Apprehension of starting to trade on your own account

A few years ago I reached the financial standing necessary to launch myself as a trader on my own account. And so I resigned from  my teaching job in 2010 to become a trader on my own account. For some background, my previous job enabled me to receive a comfortable departure premium if I created a company. So I created an SEO company that I had to keep afloat for a year to receive the entirety of my severance package. To create a company, I worked a little so as not to be bored, to avoid presenting accounts with a zero bottom line and risk not receiving the second part of my premium. The result was that my SEO company was rapidly successful and all of a sudden I found myself earning more with the SEO than with trading... and I have spent the past two years developing my company. But a few weeks ago I realised that it was also a headlong rush, a way of not becoming a trader on my own account because I was afraid of launching my project in and saying: "you have dreamed about this for ten years, go for it buddy"... The fear of achieving my objective... and the fear of results. In mid 2011, I traded for a few months almost full time and I lined up months at €5k, €7k ... The paradox was that I was more afraid of making money than of losing it... But I have worked on my relationship with money, I am no longer afraid of making money, I no longer feel guilty about it.

So I am becoming a trader on my own account

I took the decision to become a trader on my own account in February, to do this I had to free up time to basically be able to trade comfortably from 7:30 am to 6:00 pm. This was where the exhausting work of the last few weeks started, installing my business in premises, looking for staff who can assist me or even replace me... and it is good, I am coming to the end of this entrepreneurial adventure and moving on to the next phase : trading...

I will therefore trade full time from 3 June 2013 with capital of €300K, 5 days out of 7. If I am to believe my projections from the past 33 months, I can could potentially earn €5K to €15K per month from this capital. I would be content with €2K to €3k ...

To stay within the spirit of the blog, I will publish a statement of my trading account and my impressions of the markets each night. In addition, to my knowledge something novel, readers will be able to follow my trades directly via webcam, I am in the process of developing a technical solution for the live stream. I had hoped to begin trading full-time on my own account at 39 years old but I will be a month late. I’ll be trading with the psychological comfort of having my SEO company, which covers all my material needs so I hope to do some good quality trading, without having any end of month pressure.