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Many envy the life a trader. Who wouldn't want to set their own hours and enjoy a nice income. So, should I be a trader?
A trader is entirely a label that one adopts for himself. Even some people who lose money trading consider themselves traders. Generally, one decides to be a trader for two reasons:
One, for the money. They feel that they can make more money trading than they could at any other occupation they could acquire.
Two, for the lifestyle. They simply enjoy the trader lifestyle.
The money aspect:
A good trader is fundamentally a businessman. He or she understands how to trade to maximize his or her income. Generally, the factors that affects a trader's income, as with most business start ups:
1. One's skill compared to others' skill
2. One's luck
Since traders are interested in making money, they must play against people who essentially are interested in losing money. Unless there is a significant advantage in skill, I believe most retail traders will fall in the "interested in losing money" category of the market, or else the "interested in making money" traders will have no one to win money from. An advantage would be like for institutions and fund managers who have the advantage of capital; insiders who have an advantage of non public information; professionals who have the advantage of cheaper transaction cost; and so on. Read more...[caption id="attachment_1567" align="alignright" width="150" caption="Photo by ~yienshawn92~"][/caption]
Many envy the life a trader. Who wouldn't want to set their own hours and enjoy a nice income. So, should I be a trader?
A trader is entirely a label that one adopts for himself. Even some people who lose money trading consider themselves traders. Generally, one decides to be a trader for two reasons:
One, for the money. They feel that they can make more money trading than they could at any other occupation they could acquire.
Two, for the lifestyle. They simply enjoy the trader lifestyle.
The money aspect:
A good trader is fundamentally a businessman. He or she understands how to trade to maximize his or her income. Generally, the factors that affects a trader's income, as with most business start ups:
1. One's skill compared to others' skill
2. One's luck
Since traders are interested in making money, they must play against people who essentially are interested in losing money. Unless there is a significant advantage in skill, I believe most retail traders will fall in the "interested in losing money" category of the market, or else the "interested in making money" traders will have no one to win money from. An advantage would be like for institutions and fund managers who have the advantage of capital; insiders who have an advantage of non public information; professionals who have the advantage of cheaper transaction cost; and so on. Read more...
[/caption]
Many envy the life a trader. Who wouldn't want to set their own hours and enjoy a nice income. So, should I be a trader?
A trader is entirely a label that one adopts for himself. Even some people who lose money trading consider themselves traders. Generally, one decides to be a trader for two reasons:
One, for the money. They feel that they can make more money trading than they could at any other occupation they could acquire.
Two, for the lifestyle. They simply enjoy the trader lifestyle.
The money aspect:
A good trader is fundamentally a businessman. He or she understands how to trade to maximize his or her income. Generally, the factors that affects a trader's income, as with most business start ups:
1. One's skill compared to others' skill
2. One's luck
Since traders are interested in making money, they must play against people who essentially are interested in losing money. Unless there is a significant advantage in skill, I believe most retail traders will fall in the "interested in losing money" category of the market, or else the "interested in making money" traders will have no one to win money from. An advantage would be like for institutions and fund managers who have the advantage of capital; insiders who have an advantage of non public information; professionals who have the advantage of cheaper transaction cost; and so on. Read more...
