Tag Archive for: trading for a living

How To Trade For A Living Without Much Capital

What’s inside:
-How can you trade for a living without much capital?
-I want to make 6-7 figures trading professionally, but I don’t have much capital. What options do I have?
-How can I get funded as a trader with a small trading account and little experience?

I recently got a really good question from ‘Bill‘ asking about this important topic. Bill asked the following:

“Here’s the short version: I’ve been working hard. I’m super stoked because I’m on the right side of break even after 9 months and hundreds of trades in demo account. If things keep progressing which I am confident they will how will I make real money with no serious capital to trade and the important question is where do I get it? How do I get it? Who’s capital can I trade? What are the options for a guy like me who can make 50% on his 5000 dollar account if he devotes a lot of his time and effort to watching charts etc? I guess the idea of building capital over many years from crumbs seems quite daunting. Any help and info would be much appreciated……… Thank you, Bill”

I hear ya Bill. These are all very good questions many struggling traders have asked. How can you make a living if you only have $500, or $5000 to start with? You’re certainly not going to pay off a mortgage with a 50% gain on your $500 or $5K acct. So how do you get around this, and why start trading if you only have a small amount to start with?

not enough capital to trade

Before I answer these questions, I need to take one step back and clarify an important part of making money trading for a living.

My model for trading and making a living from your trading starts with a simple model:

Sim, then Demo, then Live

It basically means you start building your skills on a trading simulator. Then you start applying them to a demo acct. Then after stabilizing in sim and demo, you move to live trading with a small amount. The key focus for this last part being on ‘consistency in execution and process‘.

Once you have done that, and have a steady baseline of performance, then you’re ready to start increasing your acct size. This can either be through personal capital, or the capital of other investors.

From what it sounds like for you Bill, you’re at the 2nd stage of this process. Hence before you even get to worrying about making a living off your $5K capital, you need to stabilize in live trading first.

But let’s assume you’re there. Let’s assume you’ve been trading a small account for 6mos – 1 year and are consistent in your execution, process and discipline.

How can you trade a large enough account to make a real living from this? How can you trade professionally for a living by starting with a small account?

trading for a living

There are several components you’ll need to start getting capital which I’m going to list below.

#1 – Get Your Trading Results Verified

For your live account trading, you’ll want to get your trading results verified. I shared my verified profitable trading results here.

For you, there are many ways to verify your performance, such as:

1) Have your accounting firm audit your results and give you a document that is stamped/dated by them, the accountant who performed the audit, and the results of your performance listed on this document.

Not all accountants are trained to do this, so you might want to seek one of the big accounting firms for this (PWC, Deloitte, E&Y, KPMG, etc).

NOTE: Getting an audit can be quite expensive, sometimes up to $50K depending upon how much trading activity you’ve done. If you’re a day trader, expect it to be more expensive since you have more trades that need to be accounted for.

I’d recommended this if you have a) a large account, b) are looking for serious capital ($1MM+), and c) are courting serious/accredited investors.

If that’s not you, then you can use the cheaper (free) and simpler option #2 such as myfxbook or fxblue. Assuming your platform works with those services, you can connect your trading acct to them and they’ll analyze the data and verify it for you.

profitable-traders-2ndskiesforex

This is what most traders with small accounts (under $100K USD) should be considering, and other than your time, it’s free.

#2 After Verifying Your Results, It’s Time to Get Capital

Luckily there are many services and sites that have capital and are looking for traders. In this current investment climate, people are looking for traders with consistent risk management, a risk of ruin at zero, and solid returns.

Here are a few sites/services below that offer various methods to get you capital:

#1) Fundseeder (started by Jack Schwager)
Summary: Jack has great industry connections and a decent platform/services to help you get investors to invest in your trading and track record (which you’ll have to establish first with a live trading account).
You get connected into their system, trade away, and the platform will start to expose your trading to investors that are interested in investing with you.

Image: Jack Schwager (Author: Market Wizards)

jack schwager

#2) Etoro
Summary: A social trading platform that allows traders to trade demo or live, and have their trades copied by other traders. You get a % of the fees for each ‘copier/investor’ that signs up and follows your trading.

Keep in mind, no really good trader would choose this long term, because it means investors with large accounts can invest a very small amount in ‘copying’ your trades, then mirror/copy those same trades in a larger account. So you’re missing a huge portion of the pie by taking this route, but it’s a good place to start.

#3) Join A Funded Trading Program
There are many programs out there that have capital and training resources to help you become a profitable trader. They generally offer a suite of products, platform and training resources, and once you prove yourself to them, they’ll fund you.

In Closing

The most important thing is not to focus on the problem (“I don’t have much capital to start with”), but instead – focus on solutions. This is what a successful mindset does.

You not having a lot of capital to start with isn’t an issue. If you can trade, and you can manage risk, you can get capital. Capital is always looking for places to park and generate a return. There’s more than enough capital out there for you to trade. You just need to find the right outfit, program and investors for you.

I hope I answered your questions ‘Bill’, and to you all as well reading this who’ve wondered what Bill emailed me about.

This is a very important topic, but one that has many options and solutions for traders like yourself looking needing capital to trade for a living.

Any questions? Message me directly via my contact form here.

Until then, all the best and may you find real confidence and progress in your trading.

,

What Limits You From Trading Profitably?

The Question
I was recently talking with a student in one of my trading courses who is an eager beaver.  They definitely have the desire to trade for a living, but I noticed something of a repeating pattern for them.  They would constantly not trade the system as is, make modifications to it and adjust the risk parameters.

I have often wondered why a developing student who wants to learn how to trade, but hasn’t made it on their own, make all of these decisions which would hurt their trading.

I am certainly guilty of this in my early days, without a doubt.  But like in Archery, I trusted my teacher, and decided to practice the technique he taught me.  Originally, this was not the case, but he told me that when I can shoot consistently and the technique is 2nd nature, then I can bring in my own style.  Until then, I followed his technique.

But the question has been with me for some time, as to why traders like myself (back in the day), or others would make decisions that obstruct them from the goal they so clearly want – to trade profitably and for a living.

The answer to this mercurial piece of the puzzle came together this past July.

piece of the puzzle 2ndskiestrading.com

A Weekend of Training
For about 6 weeks this last summer, I was on vacation in the US visiting family and friends.  But for one weekend, I was in a training that helped me answer some long lasting questions about trading, for myself and my students as to why some do things which hurt the learning process.

The training was a QRA Level 1 intensive.  QRA stands for Quantum Reflex Analysis and it was a weekend where I was pounded with information.  QRA is based on Biophysics, particularly on the work by Fritz-Albert Popp, an award winning physicist with hundreds of publications.

QRA is mostly focused on the healing of physical illnesses, but also works on a psychological/emotional level.

Although I remember many things from the weekend, one moment stood out amongst the rest.

The trainer was talking about someone who had cancer that came to see the Doctor and head of the QRA program.  They were wanting to get cured of their cancer, but the Doctor kept running into strange ‘blocks‘ in trying to help with the healing process.  It dawned on him that the client actually had underlying psychological or limiting beliefs that were interfering with the healing process.

The Answer
Imagine – someone has cancer and they have tried everything to cure it, spending hundreds of thousands of dollars and going through tons of painful treatments and surgeries.  They obviously want to live and want to be free from the disease.  But the whole time, there was something interfering with the healing process – and it was them the entire time.  It turns out they actually had a sub-conscious belief they did not deserve to live, and this program was running in the background the entire time.

light went on 2ndskiestrading.com
Suddenly, the light went on and it all came clear to me – this is what happens to traders who use improper risk management even though they know the math is against them.  This is what happens to traders who don’t trade the system, even though they know it makes money.  This is what happens when;

-a trader jumps in too early, before they get a signal
-or chases a trend when they know they shouldn’t
-trades out of emotion, trying to get losses back when they have no signal
-overtrades
-adds to a losing trade
-gets over-confident and thinks they ‘got it’ after just a few months
-trades way beyond their position sizing
-takes profit before hitting their target
-doesn’t accept their risk and panics, exiting too early only to watch the trade run to their limit
-fails to pull the trigger when they do get a signal

You know the story, because it has happened to you, just as it has happened to me.

Have you ever wondered, why you make the decisions you do, even though you know they are not helpful to your trading?

Is it your fear that overcomes your clarity?  Is it your impatience that overcomes your discipline?  Why do you not prepare for your trading day when you know how challenging trading is?

Whatever it is, it is currently in you, in your psyche and wired into your brain, causing you to repeat many of the patterns that has held you back.

You have known this in some way (hopefully), but it is very possible (and likely) you have a program running in the background, which is interfering with you trading successfully and reaching your goals.

You Mean I Don’t Want to Be Successful?
It is actually possible (like the patient), some part of you does not want to trade successfully.  It is actually possible, some part of you is afraid of being successful, of being wealthy, of being a disciplined trader, of reaching your goals.  If any of these, or many other programs and unconscious beliefs are there, then they will always short circuit your process and efforts to trade profitably.

The good thing is – you can change all this.  The brain has an ability to learn new things.  It has neuro-plasticity, meaning it can be re-wired with amazing flexibility.  You can learn new things at almost any age, you can increase your IQ, you can develop skills regardless of your background and training.  Thus, regardless of what patterns and behaviors are inhibiting you, they can be re-written.

neural wiring learning process 2ndskiestrading.com

I have actually trained in both QRA and ERT (Emotional Repolarization Technique), doing dozens of sessions designed to re-wire my neural connections, to function in a more optimal state, in a whole-brain state, to remove any unconscious programs which would interfere with my trading, along with many other things.

If I could have started my entire trading career over, I would have started with this training from the very beginning.  If I could recommend one thing to build a successful trading mentality, for those having psychological issues interfering with your trading, to combine with your learning process while working with a mentor, it would be this.

Two Questions
With all of that being said, I would like to end with two questions;

If you could watch yourself trade, like an observer, what advice would you give yourself?

and the other…

What would you do, study and train in order to trade successfully?

I hope you enjoyed this forex trader tip article, and that it has brought up some intriguing questions for you.   Please feel free to share, along with your thoughts on the article.

Kind Regards,
Chris

Other Related Articles:
Building A Successful Trading Mentality
The Psychology of Money and Your Equity Threshold
Awareness & Negative Habits in Trading