Trading is of course potentially profitable but the profitability of the trader will depend on several factors such as his experience, knowledge, strategy and the quality of his analysis. It is not possible to determine exactly how much a trader can earn as his profitability will depend on these factors but also on the sometimes unpredictable evolution of the financial markets.
Is it possible to live off trading?
Trading as an investment activity is now very popular. But the question that many individuals who are interested in the stock markets ask is: "Is it possible to make a living from trading?" The answer to this question is of course no, and if you are thinking of making money from trading, always be aware of the potential for capital loss, as not everyone can trade. You can, however, trade online with a few solid fundamentals to give you the best chance of success. Here are the essentials you need to know.
79% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money. This is an advert for trading CFDs on eToro
A good education and a thorough knowledge of the markets:
It is essential that you start by learning about trading, whether it is stock markets or CFDs. Take the time to understand the vagaries of price movements and trends, and learn to do advanced technical and fundamental analysis yourself, not just relying on free signals.
Finally, you should also learn to manage your capital well. This is called "money management". In order to trade in the long term and implement effective strategies, it is indeed necessary to know how to invest in the right way.
The qualities needed in trading :
Not everyone can make money with online trading. If you want to become a trader, you need to have certain qualities:
- Market knowledge: A solid knowledge of investment and financial markets is of course a must for any good trader. Without this in-depth knowledge, there is no hope of making money from your speculation. It is therefore advisable to train thoroughly and seriously and to update your knowledge on a regular basis.
- Know how to use technical and fundamental analysis: These two types of analysis are the very basis of online trading. A trader must therefore master their use.
- Be inquisitive: Trading requires you to be constantly informed about the events affecting the financial markets. Subscribe to news feeds and take time every day to read news related to the assets you are trading.
- Manage stress: Investing in the financial markets is fun, but it is also very stressful. Stress is the main enemy of profitability in this area, as it can lead you to make hasty and unthinking decisions.
- Have time: To make sure you take advantage of all the opportunities in the market, it is essential to spend a lot of time analysing prices and setting up strategies.
- Money management: If you are the type of person who has difficulty managing your budget, there is no need to start trading online. Risk management and good capital management are two of the most important qualities in this business.
The risks of trading :
Before you put your money into trading, you should be aware of the risks to your money and your standard of living.
It is advisable to only invest money in trading that you do not need for your daily life. If you have savings, make sure that you only use part of them, so that you have some money left over in case you have a hard time.
Similarly, don't rely on trading alone to support you and make sure you have another source of income in case you don't manage to make enough profit.
Use your investment capital wisely and sensibly by diversifying assets and investing only small amounts in each position. In this way, you will protect your money as much as possible in the event of an unforeseen market downturn and avoid being left without money.
Trading is not without risk and it is possible to lose your entire capital. If you are not prepared to take this risk, don't do it. Finally, you should know that it often takes several years of practice to become an effective online trader. Take the time to learn.
Frequently Asked Questions
What is a trader's job?
The profession of trader is to be distinguished from the trading activity that can be carried out by an individual. In fact, a professional trader is in reality an expert trader of securities who most often works for a bank, a stock exchange company or an investment company. Both financial and economic, his role is to try to anticipate stock market fluctuations in order to generate profits. But the professional trader has of course undergone specific training to be able to trade.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
