Achieving this (and it is an achievement) now allows for a lifestyle that gives you independence. Location independence, do it from anywhere you want. And financial independence, slowly but surely build your accounts to where they contain enough money that no matter what happens, you’re going to be fine regardless of anyone else.
This interview by Etienne Crete with Raghee Horner gives a great insight into how to make this happen:
Full-Time Forex Trader’s Way Of Doing Thingsthumbnail courtesy of desiretotrade.com
Full-Time Forex Trader’s Way Of Doing Things In episode 243 of the Desire To Trade Podcast, I interview full-time trader Raghee Horner to discuss her way of doing things in trading. Her entrepreneurial spirit and dedication is part of what allowed her to see a lot of success in her trading career. Read full post …
An interesting part of Raghee’s approach is her adherence to probabilities. And this is a big part of what makes it possible for a person to become a professional, and make trading your primary source of income.
You through trial and error find your trading style and uncover your edge. Once you have your edge, you have your statistical advantage. To implement your edge you develop specific trade entries and trade exits. Then it comes down to the discipline to trade your system and nothing else, it comes down to numbers. For every 100 trades, a certain number will be losses, and a certain number will be winners. The losses are limited by money management, however winners can run a long time, easily paying off losses and booking nice profits.
This is very similar to baseball. If you haven’t seen the movie Moneyball, I highly recommend it.
Batters have their on base percentage, and their slugging percentage. Out of every 1,000 pitches, they reliably connect bat with ball a certain percentage. Their pay is based on this percentage. They don’t know which individual pitch is going to be a single, a double, or a home run. They just know statistically, their talent and training will produce this percentage of hits over a thousand pitches.
This is what makes baseball so compelling, and produces unforgettable moments. Like Scott Hattenerg’s home run that broke the consecutive winning game record, after the Oakland A’s had been up 11-0, but frittered away their lead to 11-11.
Hatteberg had an elbow injury and was past his prime. No batter knows what pitch is coming next, but ready to bat as the ball comes in over the plate, talent and training take over and a home run happens. All in a split second.
This home run of Hatteberg’s was one of a number he reliably produced every thousand pitches thrown at him. This particular one though happened when it really, really mattered.
Hopefully you can see the relationship this has to trading. If Hatteberg, or any professional player, lost their discipline and started swinging at anything with sloppy technique, they would quickly lose their position on the team. It is their discipline and their ability to operate at the highest level that make their statistics meaningful. They mean the team can rely on them for a certain amount of run production every season.
Likewise with trading. If you lose discipline and enter trades just anywhere with whatever position size takes your fancy, your account will be $0.00 in a very short space of time. If on the other hand, you are disciplined with your trade entry and exits and rigorously adhere to your predetermined position sizing, your account will grow.
There will be losses, equivalent to strikeouts, but over time you will connect with a trade entry that results in a long, profitable (home run) trade. These trades are always going to be there, you just never know which trade entry (pitch) will be the one that turns into a big winning trade.
This is a crucial mindset to have, and it takes courage because you are constantly fighting emotions and staring into the unknown. If you want the life of a professional trader though, it is the world you must live in.
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