I’m interested in becoming a professional trader. Can you provide any advice?
Those looking to make a career out of trading for others are facing multiple obstacles. For starters, managing money for others, especially if done on leverage, is a thankless job. When things are good, your clients will always be wondering why they aren’t better, and when things are bad...well, you get the idea. Warren Buffett once described it this way: The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, “Swing, ya bum!”
Aside from the obvious struggles mentioned, actually breaking into the industry can be a daunting task. Many assume that there are millions (billions!) of dollars just waiting to be traded by anyone who feels up to the task, but the truth is, traders must prove themselves first, and this can be challenging. For instance, showing profitable trades in a demo account is a waste of time because there aren’t any emotions involved in winning or losing Monopoly money. Accordingly, it won’t get anybody’s attention.
On the other hand, a track record in a live but moderately funded account probably won’t get anybody knocking on your door any time soon either. To attract investment dollars, it typically requires a prolonged track record with a significant amount of funds under management.
As you can see, you might be the best trader on the planet, but if you can’t find a way to get the capital needed to prove it, you will struggle to find a place in the business. In other words, it is difficult to raise money for a program traded by someone without a tried and true track record. Unfortunately, finding yourself in a position to build such a trading history requires the experience that you have yet to develop.