Care to share your perspective and your own experiences?
There is a broad spectrum of backgrounds from those who become career traders that risk their own capital in the market to survive. In this context, I don't mean professional traders who are working for a firm and receive a salary/bonus (e.g. prop traders or bank traders, etc). I'm referring to those that risk their own net worth on the markets to make a living, even if you're still considered 'retail' by the mainstream. These traders may have had a job in the past, they may have been an entrepreneur, or they be completely green straight out of uni/college/high school without prior job experiences.
One of the advantage of having a job is salary. Its seen as safe (in the short term anyways). More often than not, with a job you put in time and exchange it with a salary. Often jobs comes with perk such as job security, i.e. union protection or long term contracts, which help to guarantee one's employment and hence one's paycheck to live on. Another perk is if you are laid off, you can often get government assistance to help you live for a while.
Contrast this with a professional trader. As the saying goes, "a trader eats what they hunt". So like a lion in the sub saharan dessert, you're constantly on the look out for your next prey. Your very survival in this world relies entirely on your ability to score a hunt. You don't have job security enjoyed by others. But in exchange you may get freedom. You do what you want in your own time. You answer to no one. But every day, you risk your capital to make capital. Not only can you simply not earn a profit, you can even sustain substantial losses that can put you in a worse position. Darwinian survival of the fittest probably plays out much faster in the trading world than the job world, where only truly the strongest can survive and the weakest will perish.
In many ways, a professional trader is like an entrepreneur of whom also rely on themselves and their abilities to live. The only differences are only in the nature of their business (i.e. trader vs market; entrepreneur vs customers). Both risk their own capital to make something of their lives and hopefully a living.
So, as someone who may be a career trader, how do you view the "salaried job vs trader vs entrepreneur" situation?
One thing I always look at the situation is, first of all, any and all profits ever earned to date from the market, I don't consider it realized even if they are in accounting contexts. What I mean is, you may have made money today or in the past, but you are constantly putting that money back into the market to bet again risking substantial losses. The market really can take it away from you the next day. I find some traders are too confident in themselves thinking they have a 'fool proof strategy'. Everyone trader who has made money in the long term likely has a working trading plan. But not everyone should be so confident that their plan means they can never give money back. E.g. Karen supertrader once commented she 'never gives back' the premium she earns from the market selling OTM options -- I laugh at this philosophy ("honey, the market will take it back when it takes it back.").
Also, very often I hear people make a huge win (maybe a lucky preearnings play and a gap move), and then they immediately splurge on the winnings. I think this is a rookie mistake. I learned very early on that the market can take everything back and even realized gains are only temporary on the longer term time scale.
Overall, I live very frugally with my wins, as if I have no profit at all because the way I see it is, as long as I am still in the market, I am exposing myself to losses.I long for the day when financial independence is reached because the only time I will really spend and relax, is the day I retire and no longer betting on the market. Whats your attitude to trading profits?
EDIT: You can get a pretty good perspective from in the documentary "Floored: Into the Pit" which showcased some successful and some failed traders. Some of these guys could be betting houses worth of capital on every trade. Some have made and/or continue to make a lot of money. Some have lost everything (after perhaps having made a lot of money at one point in their career). Keeps your grounded.
There is a broad spectrum of backgrounds from those who become career traders that risk their own capital in the market to survive. In this context, I don't mean professional traders who are working for a firm and receive a salary/bonus (e.g. prop traders or bank traders, etc). I'm referring to those that risk their own net worth on the markets to make a living, even if you're still considered 'retail' by the mainstream. These traders may have had a job in the past, they may have been an entrepreneur, or they be completely green straight out of uni/college/high school without prior job experiences.
One of the advantage of having a job is salary. Its seen as safe (in the short term anyways). More often than not, with a job you put in time and exchange it with a salary. Often jobs comes with perk such as job security, i.e. union protection or long term contracts, which help to guarantee one's employment and hence one's paycheck to live on. Another perk is if you are laid off, you can often get government assistance to help you live for a while.
Contrast this with a professional trader. As the saying goes, "a trader eats what they hunt". So like a lion in the sub saharan dessert, you're constantly on the look out for your next prey. Your very survival in this world relies entirely on your ability to score a hunt. You don't have job security enjoyed by others. But in exchange you may get freedom. You do what you want in your own time. You answer to no one. But every day, you risk your capital to make capital. Not only can you simply not earn a profit, you can even sustain substantial losses that can put you in a worse position. Darwinian survival of the fittest probably plays out much faster in the trading world than the job world, where only truly the strongest can survive and the weakest will perish.
In many ways, a professional trader is like an entrepreneur of whom also rely on themselves and their abilities to live. The only differences are only in the nature of their business (i.e. trader vs market; entrepreneur vs customers). Both risk their own capital to make something of their lives and hopefully a living.
So, as someone who may be a career trader, how do you view the "salaried job vs trader vs entrepreneur" situation?
One thing I always look at the situation is, first of all, any and all profits ever earned to date from the market, I don't consider it realized even if they are in accounting contexts. What I mean is, you may have made money today or in the past, but you are constantly putting that money back into the market to bet again risking substantial losses. The market really can take it away from you the next day. I find some traders are too confident in themselves thinking they have a 'fool proof strategy'. Everyone trader who has made money in the long term likely has a working trading plan. But not everyone should be so confident that their plan means they can never give money back. E.g. Karen supertrader once commented she 'never gives back' the premium she earns from the market selling OTM options -- I laugh at this philosophy ("honey, the market will take it back when it takes it back.").
Also, very often I hear people make a huge win (maybe a lucky preearnings play and a gap move), and then they immediately splurge on the winnings. I think this is a rookie mistake. I learned very early on that the market can take everything back and even realized gains are only temporary on the longer term time scale.
Overall, I live very frugally with my wins, as if I have no profit at all because the way I see it is, as long as I am still in the market, I am exposing myself to losses.I long for the day when financial independence is reached because the only time I will really spend and relax, is the day I retire and no longer betting on the market. Whats your attitude to trading profits?
EDIT: You can get a pretty good perspective from in the documentary "Floored: Into the Pit" which showcased some successful and some failed traders. Some of these guys could be betting houses worth of capital on every trade. Some have made and/or continue to make a lot of money. Some have lost everything (after perhaps having made a lot of money at one point in their career). Keeps your grounded.
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