Getting to know yourself: This can take longer than you first think.
Getting your finances in order: As long as it takes, they’re best not neglected.
Deciding if it suit you: An hour or three reading through this website.
Let us start with the most commonly asked questions and actually give some real answers to them that are more meaningful, and based on actual trading experience – instead of the usual marketing waffle and rhetoric…
Is trading for me?
If you’re happy spending some time on a computer researching markets, have cash savings available, and enough of them that you can use a portion of your savings to start a trading account (we’ll get to the actual amounts in a bit), or you want to trade or manage investments professionally; then sure, trading could very well be for you.
Read through the things we’ve outlined on this website, follow up our recommendations for your toolkit setup and further research, and if you’re still interested and motivated then, yes, trading is something you have a very real chance of success at.
If you’re already trading and are looking for tips, tools and ideas to improve your results, we think you’ll find our information and analytical methods rather refreshing and insightful compared to the ridiculous amount of marketing hyperbole there seems to be online nowadays. Just straight questions, getting straight answers here. We make money trading, it’s not a myth or impossible subject, just one that requires time and effort to get past all the nonsense out there to build a flexible strategy for regular profits.
If you have significant debts, are living hand-to-mouth, have no savings, you can’t afford to invest the time and money, or have no interest in working professionally managing other people’s money for an irregular income as a percentage of the profits; then realistically you’re probably not ready to trade with real money. We recommend you pay off your debts as a priority, then adjust your living costs to make a strict deposit of at least 10% of your take home wages into a savings account, and take your interest forwards as an educational hobby on the subject of finances, until yours are in better shape.
In the meantime, do learn why paying interest on debts disadvantages you, and find out how to make yourself financially more stable once you do have some breathing space to trade with – and can start earning interest instead.
It costs nothing to read, research, test and trade with a ‘demo’ account on any broker – so learn to do that and maybe you can build up a track record and understanding that will help you later build up an account or, if you wish, work towards being a professional in the corporate investment and trading industries.
Wherever you are at in life and whatever your interest in trading, education and our Analytic Trading approach to the markets – you’re in very good company here. We’ve got nothing to prove, other than to our own meticulous selves, and neither should you.
Only you truly know your weaknesses and strengths – trading will amplify them – so it is best to understand yourself from the beginning.
How much time do I need to trade profitably?
Just as a piece of sting’s length can be articulated – it’s twice the distance from the middle to the ends – so too can this question be answered a little better than the ‘how long’s a piece of string’ crowd.
The longer the term your trades and bigger targets you trade, the smaller the cost of the spread as a proportion of your trades and therefore the easier it is to profit without losing too much to the broker’s spread/commission. Spread and slippage really do become a more significant factor for scalpers and day-traders with targets of up to about 30 pips per trade. So we recommend you start with the longer timeframes first and work your way down from there to the time that suits your lifestyle.
Scalping, normally intensely for a few hours a day
If you want to be a scalper, in and out of trades all day like a video game, then you might be better off working for a proprietary trading firm with direct market access, where the spread is literally 1 market tick, because the spread on standard retail broker platforms will be just too large a percentage of your target wins for you to be able to profit.
To get into a prop firm you’ll need to brush up your CV, build yourself up a good live trading track record, at least 3 months worth, ideally a year, and most will expect you to trade your own money as well so you’ll need a reasonable account to start with.
If you are scalping, do still checkout our indicators for automating your chart analysis, they work very well on all timeframes and you can easily run them on a laptop at work alongside your main workstation if you don’t want to share your methods on your work computer.
Day trading, a few minutes each hour or a few times a day
If you can check the markets throughout the day you’ll be able to find more profit opportunities, and get in and out of moves more often, but be careful not to trade just for the sake of it through greed or boredom.
You can find great trading opportunities checking the charts once an hour but there’s not much to do in between hours when there’s no setups so it’s good to have other things to do in between. It can be good to join online trading rooms if you want to chat about trades and setups in-between hours to help you keep your mind active but focused.
Investors and position traders, analyse the markets for a few minutes a day
Investors should be looking at the markets between at most once a day (on weekdays) and at least once a month and use the same chart timeframes accordingly.
If you are trading on this basis, you will have no need to look at lower timeframes than Daily charts really, because anything less becomes statistically less significant to you; so our advice is don’t, unless you want to transition to becoming a daily trader or an intra-day trader.
Investor’s analysis of trade positions should really take no more than a few minutes a day to a couple of hours a week, similarly to the way you might manage a share portfolio, and you can apply these methods to shares too. The chances are that managing your portfolio using technical indicators, alongside your fundamental judgement, will be much more profitable.
What will it cost me to get started?
You can use any modern computer but we think a budget of £500 as a minimum really and probably no more than £1,500. In all likelihood, you’ll be using the computer for other things as well so it’s nice to have a modern and quick one – no one likes waiting for their computer to catch up!
You’ll definitely want broadband, so £30-£50 a month, and we choose to use a cloud server for our trading computer, which can be from £15 a month but £30-£50 a month will get you as much computing power as you need.
A smartphone is also very handy, these are all in the £300 to £1,000 price range nowadays but you can pay that monthly, bundled with your mobile subscription package.
How much money do I need to trade?
For an account, we recommend complete beginners start with £500-£1,000 – it’s enough to grow in your first year but not so much that it is irreplaceable if you mess-up.
Most traders, once they understand more about what they are doing, will get little satisfaction from trading an account any less than £3,000-£5,000 due to the limited amount that can be risked, and profits made, as a sensible percentage for each trade.
The time involved in trading needs to yield an equivalent hourly rate to your day job or more, otherwise you’ll probably just get bored of the slow growth and start gambling in the hope of building a bigger account quicker – but then of course the increased risk could make it more likely you’ll lose more of the account, and give up.
It is important to be realistic with yourself and only trade money you can afford to risk because there will be ups and downs and you won’t want to take money out of your account while you’re growing it.
We think you’ll want an account of at least £5,000 in your second year of trading to stay motivated and stick to trading a sensible percentage on each trade for continued stead growth.
If you’re starting with a larger amount you’ll probably actually need to be more careful – you have more to lose, so you won’t want to rush into trading larger amounts until you’ve proven to yourself you can be profitable and consistent.
How much can I make?
Active investment management
If you have savings you want to grow at a rate far greater than any bank or investment could possibly give, we find an annual 50%-100% return is achievable, and an account of £10,000 to £100,000 can be traded confidently in this way.
Once you get over £100,000 your trade size starts to be significant enough to be more aware of slippage so you may want to break down your account into multiple brokers or move to get direct market access.
Over £1,000,000 and your trades will start to get noticed by brokers, and you could actually be able to move some markets a little with your trades, it’s nothing to worry about but good to be aware of. One thing is for sure, with that account size you’ll expect a little extra special treatment from your broker so do make them work hard for your business.
Trading for a living
If you want to earn an actual living from trading then you’re going to need a pot that is at least the equivalent of 1 year’s salary that you’ll be wanting to draw from but preferably 2 or 3 times is much less stressful if you have a dry month. So depending on your circumstances this could need £30,000 to £300,000 to work with, but as in any business, this is simply your working capital, tied up similarly to the way that retailers do in stock.
Of course it’s actually very common for successful traders to be working accounts in the millions but the chances are, if you’re doing that then you probably already know a lot of what we’re detailing here – but feel free to get involved, we’re happy to look at custom research and development of your strategy confidentially, we can do some very clever things with our programming and strategy testing.
Next, lets look at computers and smart phones for trading…
Includes all Profiles, Templates and Indicators, with statistics, screen, email and smartphone alerts.
