Trade For A Living: 4 Harsh Truths (part 1)

Among the retail traders I’ve spoken to over the years, more than half say they wish to eventually trade full time from home.

This isn’t surprising, given that traders can make money anywhere in the world with a stable internet connection.

I mean, who can resist the idea of lying at the beach sipping a mojito, all while making a thousand dollars a day?

Alas, while this is technically possible, it isn’t the full story.

You see… after over a decade in this business, I’ve learned a few things about full-time trading that most new traders don’t realize.

Trading for a living has its perks, sure… but it’s probably not as wonderful as you might think.

So here are 4 harsh truths about full-time trading that will give you a more realistic view of what to expect:

Harsh Truth #1

Your average monthly profit will almost certainly be less than 10%.

The truth is that an average 10% monthly return on your trading capital would be an amazing result.

Most likely, over the long term you’d be getting less than 5% on average.

Of course, as with any competitive endeavor there will be outliers who will perform much better. But for the most part, a reasonable profit expectation would be an average of 2-3% per month.

Surprised? Most new traders would be.

The truth can be a bitter pill to swallow, but it’s better to be disappointed with the truth than to be led on by a lie.

After all, the more realistic your projections, the better position you’re in to make effective decisions.

Which brings me to the next point…

Harsh Truth #2

You’re probably under-capitalized.

With a more realistic profit expectation, you come to realize that to make $2,000 per month you have to be trading with at least a $50,000 account… and that’s being optimistic. More likely, you’d need more than that.

A common mistake new traders make is thinking that they can start with a $300 account and grow that capital into an amount large enough to sustain full-time trading.

To achieve this, one would have to make a 10% profit consecutively every month for 4 years. That’s pretty much a perfect record for 48 straight months.

That’s not going to happen.

The bottom line is that in this business, it takes money to make money. Unless you’re going to have access to mid-five figures of trading capital, full-time trading is not something you should be considering.

Part 2 Coming Soon

Full-time trading is a highly challenging endeavor, and unless you’re prepared to deal with the practical reality of what it takes, you’re better off working towards a different objective.

In the next post, we’ll take a look at another 2 harsh truths of trading for a living, and what you should expect if this is your goal.

By |2019-04-24T15:01:02+00:00April 14th, 2019|Mindset|15 Comments

15 Comments

  1. Akeem Salam April 15, 2014 at 8:10 am - Reply

    Honestly,you are one among millions that said the REALITY of Trading and that is the BITTER TRUTH. Pls I am a begginner and will like you to guide me aproprately.Thank you. Hear from soonest.

    • Chris April 15, 2014 at 8:47 am - Reply

      Hey Akeem,

      Thanks! Well, you can simply go through the blog posts in this site, or, if you want to take things further, get the Candlesticks Made Easy book and/or join the Icarus Project.

  2. Johan April 15, 2014 at 9:53 am - Reply

    Good Morning,

    Thank you so much for sharing the truth with us. I do understand now why I can’t trade fulltime But it is still my Dream.

    Be Blessed

  3. jesu vadian April 15, 2014 at 3:44 pm - Reply

    Hi Chris,

    Do you have an establishment that offers training, guided investment.
    what is Icarus Project ?

    thanks.

    • Chris April 15, 2014 at 5:55 pm - Reply

      Hey Jesu,

      The Icarus Project is where I teach people how to trade on the longer timeframes. I don’t do guided investments.

  4. Arthur April 15, 2014 at 5:23 pm - Reply

    Hi Chris,
    Thanks for your honest article. I have joined the Icarus program and am currently going through it for the 3rd time because I believe in it and want to make trading full time my job. So in essence I accept the Harsh Truths.
    Cheers.
    Arthur

    • Chris April 15, 2014 at 5:51 pm - Reply

      Cheers, mate.

  5. Ruben April 15, 2014 at 9:21 pm - Reply

    Hi Chris

    I’m personally thinking in this idea:
    Try to reach a bigger capital, let’s say 200K.
    Then, instead aiming to 15% a month, aiming to 15% a year(30K).
    On the other hand cutting the expenses, let’s say 15K a year.
    So, I could add the remaining 15K to the capital, and so on…

    Well, seeing it written for me is pretty fine 100K. 10K for expenses.
    5K to add to the capital. Or working part-time it would be perfect.

    I think it could be possible in not too many years.

    Ruben

    • Chris April 16, 2014 at 5:36 am - Reply

      Hi Ruben,

      Excellent idea.

      Trading with a 6-figure account will take a lot of pressure off having to “perform” by forcing trades.

      Also, while many people talk about making more money, I find it just as important to spend less.

    • Chris April 16, 2014 at 5:47 am - Reply

      Hi Ruben,

      Excellent idea.

      Trading with a 6-figure account will take a lot of pressure off having to “perform” by forcing trades.

      Also, while many people talk about making more money, I find it easier to spend less.

  6. Kevin (TDT) Harper April 16, 2014 at 1:10 am - Reply

    No doubt about it Chris you are getting onto it here

    Look forward to the parts about how every trader is so different mentally and their financial situation so different from the next that I’m sure are coming … because in the end consistently profitable trading (At any % return) is all about the Trader Themselves

    I do think it is important to recognize the fact as you mentioned that some traders will achieve consistently much higher returns than 10% month (I know a few) but don’t go aiming to high until you know you can from trading a Real Money Account “not a demo account”

    • Chris April 16, 2014 at 5:40 am - Reply

      Yes, thanks for bringing that up. That would be a useful and (hopefully) insightful topic to discuss.

  7. andrew April 16, 2014 at 11:55 pm - Reply

    Oh so true. It is so easy to get carried away after a good week. Project that week’s winning into an annualised rate of return, and you are on a high. Only to have those hopes dashed the next week. Been there, done that.
    But I remain determined to succeed where success would be measured by achieving 5% per month for 5 years. Then I’ll still only be 70 with 30 more years to go to consolidate!

  8. Prince Pst B.C.Eke February 10, 2015 at 8:46 pm - Reply

    Hi,
    Chris am a keen follower of every thing about you. I bought your Candlestick made easy e-book, I have attended the icarus program and am preparing to buy your latest Practical Trend e-book, how would you support my coaching training program on trading Currency and Commodity in the Global Financial market.
    I would appreciate partnering with you esspecially marketing you and your program in Nigeria and the surrending West African countries.
    Expecting to hear from you soonest.

    • Chris February 11, 2015 at 8:59 am - Reply

      Thank you for your support. If you would like ongoing coaching and training do consider joining the Pip Mavens Inner Circle at the end of the Icarus course.

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