- One of the blog followers is based in Paris, and he asked me two questions via email. He said it would be cool if I posted and answered his questions in a blog post. In this post, I have tried to answer his first question.
- “You work in a trading office. What does this mean exactly? Are you employed? Is it just a common office you share with others where you have available all sorts of information on all trades on big screens and you pay for it to have access to it?”
- I work for myself as an independent trader. This means that I trade with my own capital (my own bankroll) and I cover my own expenses – e.g. computer equipment, software costs, office costs, subscriptions and so on. In actual fact, operating costs are very low, when compared to running most other businesses, and there is no big capital investment required at the outset. In order to start trading, you can use only small amounts of money. When you think it’s working, you increase the dollar amount of risk per trade. So it’s very easy to scale up and down with trading – this won’t change the outcome of the strategy, because many of the financial instruments are extremely liquid (meaning there are very large amount of transactions and volume).
- As an independent trader, you depend solely on your ability to trade the market profitably. There is no salary. If you are not trading profitably, then you need to chip into your trading/financial capital in order to cover your costs (not a lot) and your living expenses (a lot!!). For this reason, it’s strongly recommended that you start off with a good amount of capital, or if you don’t have that, that you continue to earn money from other sources to finance yourself until the trading profits are more than your living expenses.
- Rather than working alone at home, I have joined together with three other independent traders – who all work for themselves too (and each with their own money). Together we are renting a small office. No, there are no big screens or anything like that. We just have four desks, two to three screens each, and we all trade independently, though we often discuss different things together. We have a squawk through which we hear up-to-date financial news that may impact on the forex markets. Generally it’s more beneficial for everyone to work in an environment with some others, it makes it more professional and more sociable.
His second question was also a good one – I will answer it in a seperate post in the near future:
I know that charts exist, they show developments from the past, possible ones for the future based on experience and a combination of all sorts of figures. But for me, seen from outside and just following the general news on economics and stock exchange values, one has to ‘read’ the future elsewhere. So charts might be a help but what, in my opinion, seems to be much more important is to read the newspapers, know who plans what and when (also in politics) and ‘feel’ in advance what might be decided. If somebody anticipates a decision (let’s say tomorrow China and USA decide to stop all consumption of crude oil and replace by wind and solar energy, even cars will be concerned), you ‘know’ what you have to do, but naturally you must know/feel it before the others. Or do I see trading as you and your colleagues do it as totally wrong. Is your sort of trading meant differently?