What Does it Take to Become a Professional Trader

When we play with the idea of becoming full time traders, we sometimes think in the terms of our normal jobs. Let’s suppose that right now you’re earning $3,000 a month and you start making some random trading calculations, account sizes and leverage possibilities on how many trades and pips you should bring a month to reach a similar “salary” from your trading.

However, if you’ve ever traded real money (or even a demo account) for more than a few months, you’ve maybe realized how hard it can be to bring consistent returns. Because the markets don’t really move in such a predictable fashion, so it’s close to impossible to make them fit to a regular weekly or monthly payment plan.

Trading for a living

Professional traders that work for big firms are normally trading with a big account. Let’s say a 3 million dollars account. They have a salary (that doesn’t come from that account, but from the trading firm’s expenses) and they get bonuses at the end of the year, or at the end of the quarter.

Let’s say that if the trader brought that account from 3 million to 4 million in one year, he might get let’s say 10% of that amount and bring home a $100,000 bonus at the end of that year plus his salary.

That way the trader can focus on strategy and planning instead of what happens in each one of his individual trades, because he knows that he will get his salary every week or every month, and he’s only “playing” his annual bonus. On the other hand, the money in that account is not even he’s. So in the worst-case scenario he’s only risking his job and not his lifetime savings.

As you might have guessed by now, this professional approach to trading helps enormously with the trader’s psychology. Since, as you now already, trading emotionally is a losing proposition, and if on top of that, you are worried that each trade could make or break your earnings for that week then you are dealing with enormous pressure, which can be daunting and make trading for a living a difficult task.

We as retail trading might not have a $3 million trading account to start with, or maybe even a $300,000 or a $30,000 account. But that doesn’t mean we cannot learn from how professional traders do their job and try to find a way of trading that doesn’t put so much pressure on our shoulders.

How can we mimic the pros

This is how I approach trading to make it as similar as how the professionals do it:

  1. I separate 4 months of expenses from my trading account and pay myself a “salary” with that money for the following 4 months.
  1. With the rest of my account I trade normally, knowing that at least I’ll have money to pay rent and buy food no matter what.
  1. At the end of the 4 months period I do a balance of my earnings in my trading account and take a new 4 months salary for me.
  1. According to my own trade results I can increase or decrease my salary, but normally I wouldn’t increase my salary, no matter how good I am doing, until a full year has passed.

You might be asking how to achieve that if you may not even have enough money in your trading account for one single month of expenses, let alone 4 and then let something there to trade. Fair enough, I was there once too. The answer to that is the following:

Don’t use your trading money to live until you have at least 8-12 months of expenses in your trading account. It might take you a while to get there but in the meantime you will perfect your trading and become much more of a professional trader.

If you need $3,000 to live don’t take any of that money until you’ve grown your account to $24,000 or even better $36,000.

How to begin trading like a pro

I know that maybe you want to quit your day job NOW, and maybe you just feel tempted to risk let’s say a $5,000 you can bring together and try to live from that by trading.

Believe me, it’s not worth it; you have a very high chance of losing them and quit trading overall. So this is what I’d do.

  • Take those $5,000 and put them in a savings account
  • Keep saving a portion of your salary from your day job to grow your $5,000 in the following months
  • Open a demo account and trade profitably for the next 4 months
  • Start a real trading account with $1,000 and trade profitably with real money for at least 2 months
  • Bring half of your remaining savings account to your trading account and trade profitably for the next 2 months
  • Bring all your savings account that should be substantially bigger that what it originally was in the first month of demo trading.

It might take you some time to do complete this process, but in the end it might be only one year or maybe two years before you can start trading for a living. Remember that trading is a career, and we must act patiently t o master it and learn it. Remember that once you are able to trade profitably it’s something you’ll be able for the rest of your life.

Please write comments or questions below if you have them. I’d love to hear your thoughts on this.

    5 replies to "What Takes to Become a Professional Trader"

    • Finally an article on ForeX that gives you the straight TRUTH! I LOVE IT ! Thank you.

    • Thanks for sharing these tips, I think these are very helpful tips if we want to start trading as a professional. I agree with the points you mentioned above. But while trading if we want to earn big we have to learn to love small losses.

      • Paul

        Hi Jake, thanks very much for your post.

        Yes, trading is not so much about winning, but about learning to understand losing as part of the game without that affecting our trading.

        There are a lot of studies showing how much more we fear to lose than we are excited from winning.

        Let me know how your trading goes!

    • Fe Jocelyn G. Merced

      Thank you so much for your priceless Fx Wisdom!

      • Paul

        Thanks to you Fe,
        Let me know how your trading evolves!

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