As usual, I shall lay out the context and perspective before I share what's my trading edge.
Paid to trade
Traders working for institutions like hedge funds, investment banks, sovereign wealth funds, etc; they all have one thing in common - they have a base salary.
That means they don't have to worry how to pay the bills every month.
With one thing less to worry, they can focus on making money for the landowners who hired them - knowing full well their landowners will reward them handsomely with big bonuses if they perform.
Ownself eat ownself
As for full time traders trading at prop shops, trading arcades, or at home, there ain't no base salary - we eat what we kill.
No kill; no meat.
We go hungry.
Multiple sources of income
Do you know how difficult it is if you want to trade for a living under the "ownself eat ownself" model?
Just ask any trader trading his own account and you'll know! Verify for yourself.
After struggling for a while, some of these traders will discover they need to find a more stable source of income like their "paid to trade" brethren.
If not, how to recover from big drawdowns or busted trading accounts?
Hence you'll see all these "I want to share my secrets", "I want to help others get rich", "I want to work for world peace", finger in the mouth kind of snake oil being peddled.
Pause and think for a moment.
If you are a successful trader, why do you need to burn your evenings and weekends finding other sources of income to complement your trading income?
Selling subscription services, giving seminars, and organising workshops and courses?
And you thought trading for a living gives you financial freedom? These multi-tasking traders cum training gurus are probably working longer hours than you!
Isn't it much easier to show your track record to the institutions and get yourself hired as a paid trader? (OK, institutions are better at verifications than retail; maybe that's a harder sell...)
My trading edge
I did my homework and when I started my journey as a full time home based trader 3.5 years ago, I made sure I do not have to trade with scared money.
The investment side of my portfolio pays for my lifestyle.
That means once I've seeded my trading account, I've no need to withdraw money out to pay for my living expenses.
All my trading profits stay in - that helps to grow and compound my trading account.
And it makes tracking and measurement of performance so much easier - I started with $1; now I have $11.
Simple. (What's with XIRR and CARG? Noticed the study types like to use percentages?)
No. That's not the edge. That's the pre-condition for my trading edge.
What's my trading edge?
I can afford to be standing on the sidelines.
Remember, if you are a "ownself eat ownself" trader, how to make money if you don't have a trading position on?
P.S. Hang on! Some of you alert readers may be thinking to yourselves - I have a regular full time job that pays the monthly bills as I trade part-time. I can afford to be on the sidelines too! Why then am I still belonging to the 90% money losing group of traders???
Bullshit!
Well, that's for you to figure out for yourself.
There's one big difference. Wink.
Singapore Man of Leisure (welcome to my blog; just google it!)
