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Trading for a Living
I often get questions asking if someone should give up their job and trade for a living and how much capital they would need to earn x $ or £ per month. The first thing I would say is if you haven't yet read my other book "The TRUTH about Trading for a Living" then you must. It contains essential information for the serious trader and through the link above you will get it at a discounted SST Member price. It could certainly answer quite a few questions for you. This page is specifically for SST traders who are looking for even more information about trading SST for a living. I say in the book that if you are asking me how much capital you need in order to earn X per month then you have not yet done anywhere near enough homework and do not understand trading enough to contemplate giving up your job. It is a basic question that you should be able to answer yourself. In fact you are the only person who can answer that question for reasons I explain fully in the book. People then ask what return on capital I achieve in my trading (presumably asking for some guide on the return that they might achieve) and at that point I am pinned in a corner with a lose lose situation. If I don't say then I am accused of not keeping my own records or worse, not trading for a living myself. If I tell them what my return is then the person immediately thinks that they will achieve the same from day one and if they don't I will be accused of misleading them. So in a way I am forced to give an answer, I just wish it were an easy answer but it is not. You see, primarily I am a trader and I love the challenge of finding new and different ways of trading and I like to test myself in different ways. For example, I have never written a book specifically about day trading but I love the challenge and buzz of day trading. I have never written a book on trading Forex but I am constantly working on improving and automating my Forex trading. These challenges are what get me up in the morning. Just as importantly, when I am spending a period day trading or developing my Forex trading I may suspend my Swing Trading. In addition to that I am a golf nut and spend a few afternoons a week playing golf whenever I can. When I do swing trade stocks I always use SST SwingTrader and would not wish to trade without it and I select my trades from the prospective trades that SwingTrader gives me but I may pick a few UK stocks and a few US stocks to trade or I may include an Index or two. Most traders choose UK or US and even if they chose from both the chances are they would not pick the same trades as me. So when somebody asks "What return on capital can I expect from trading SST or from using SST SwingTrader software?" How can I answer and how can any answer give them an indication of what they might make - which is really what they are after? SST SwingTrader is a fantastic piece of software that will absolutely elevate the novice trader and add to the armory of an experienced trader. But one trader may trade US stocks and another UK stocks and Indices and even then the stocks chosen to include in a watch list will almost certainly different. So everyone's results will be different. By the way, if you do not yet know about the SST Software please visit: I also have some years of expertise and experience and by just swing trading the UK market with my UK watch list of stocks and a few Indices I can make 5 to 10% per month average return on my capital if I trade this method full time. HOWEVER - I do not offer this as any kind of guarantee in any way, it just happens to be what I can make and even I get losing days, weeks and even the odd losing month but over time I make good money. Remember also that as I said above, I do not only trade this way and some weeks or months I may scale down or stop my swing trading in order to concentrate on other methods. When I swing trade full time I have a watch list of around 40+ stocks and will often have between 8 and 12 trades running concurrently and a maximum of around 14 trades open at once. I include some Indices in my watch list such as the Dax, SMI & FTSE 100. Managing that amount of trades requires capital and time. Back to the question you are (probably) asking, can you make a living trading SST? Well, I certainly did before I wrote Short Swing Trading (book) but then I developed the software like SST SwingTrader which revolutionized my trading taking away hundreds or even thousands of hours doing manual back testing and replacing it with a degree of accuracy that I never dreamt possible. I would now hate to trade without it. The next question on everyone's lips is: "So if I follow exactly what the software tells me can I make a living?". Another question I really can't answer with a categorical "Yes". It would be very easy for me to say yes, most other "mechanical" systems available tell you that you are almost guaranteed to make thousands per month. This I feel is totally irresponsible of them because (unless anyone can prove different) it simply is not true. I have many emails from people who have lost significant sums from these other systems and I genuinely have not come across anything better than SST SwingTrader - if I had I would be using it myself I promise you!!!!! So what does the SwingTrader achieve? Results will obviously vary depending on whether you trade US stocks, UK stocks, Indices etc etc and that is your choice. I am not saying that one market is better than another - it's not. But this month better profits might be made from the Indices, next month from US stocks and the month after from UK stocks. You simply have to pick the market you want to trade then become good at it. You can't expect to make money at something unless you are good. So overall what results will the software give? OK, lets take the worst case scenario because I think every business plan should allow for that. I believe that if I took an average trader or even a novice trader who was losing money consistently (which they mostly do) and got them to get a good, optimized watch list together and then traded with good money management and stuck EXACTLY to what the software told them - no more and no less, it would turn their losses into profits - by that I mean something better than break even and believe me, THAT IS A HUGE, HUGE STEP!!! But we have hit one problem already, I know this from my email support, many software users either: a) DO NOT use the software correctly / fully Point a above is easily overcome. Read the help text like a manual - cover to cover. Use SwingTrader for a while then read the help text again - all of it. Read everything on the SwingTrader members website a few times and make sure you FULLY understand how to use SwingTrader. It's not difficult to use, in fact it is so simple that most people don't bother to read the help text and that is why they use it incorrectly. Point b) above is, paradoxically, part of the answer to trading more profitably. I will try to explain. The SST software will give 90% of traders a HUGE leg up to becoming full time but this is not always the complete answer. In order to be confident of making a living out of trading you will almost certainly need to add some of your own expertise and experience. NOT in terms of messing with the strategy because although it is simple, it works. What you need to develop is an understanding or skill in order to help you decide which trades to take and which to leave or perhaps even determine times when you should be less or more active in the market. For example, there were times when I was happy with 5 live trades and other times when I wanted to be fully committed with 12 or even 14 live trades. Position sizes can also be altered to "throttle back" when the market is going sideways and increase market exposure when the market is trending strongly. The trick to really good profits is to understand that you do not take new trades in a consolidation period which cause whipsaws and you take new trades in a trend that will give you a good swing in price. This requires some experience and expertise but it is the difference between doing OK with SwingTrader and doing very well. There are tips on the SST Members website called Secondary Trade Filtering which will help with this. To a large extent all you need to do is understand trend lines, support/ resistance levels and chart patterns and you can add this extra dimension to what the software is offering you as a list of prospective trades in order to select the best potential winners and reject what could be the higher risk entries. Trading with the underlying market trend can make a significant difference and you will see notes on that as well. So in conclusion, you can achieve 5 to 10% return on capital per month as a possibility, PROVIDED: a) You use the SST SwingTrader for accuracy, removal of much emotion and clear yes/no signals as well as indispensable back testing and optimization of strategy settings. I seriously DO NOT recommend anyone trading SST for a living without the software. b) Become an expert with the software and use it properly. Fully understand the software and the SST strategy as well as how this is reflected in the optimized settings. c) You need to add some expertise and experience to the trade selection process in order to elevate your profits and select the best of the best. Don't invent a different strategy but be selective about the prospective trades you take to improve your profits further. Add good trading skills to the mechanical system and you really have a winning combination that can provide you with the income you need over time. DO NOT give up your job until you can prove, at least on paper, that you can trade profitably to a level that will provide you with the income you need. Not just for a good month but on a rolling three month basis. It is a HUGE step to trade for a living and YOU must be convinced you can achieve it, it is not good enough for me to tell you that it is possible. If you have not yet got the trading records that show you that it is possible then DON'T DO IT! I was forced into it because I was made redundant and I lost a LOT of money before I started to turn things around and make money. You have a head start by using the strategy I developed and an even bigger head start by using the SST SwingTrader but please be very careful before you make a decision you might regret. Having said that, if you do trade for a living successfully you will find huge rewards in terms of enjoyment, money and free time. This may not have been the answer you were looking for or hoped for but I prefer the truth, especially when your living is dependant on it. Good luck and I hope you achieve your dream and everything you want in life.
David Graeme-Smith To Find out more about the SPECIAL MEMBERS DISCOUNT on Special discount of 30% for SST Members only. |
