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One thing is for sure: everyone has its own reasons for trading in today’s Markets.
Maybe you want to be free and control your time, maybe you want to improve your wealth over time, maybe you want to build a real passive income or maybe it is something else that motivates you.
Either way, in this article you are going to learn the Top 7 reasons why day traders, swing traders and investors decide to put their money into the Markets every single day.
1- You do not depend on others
One of the key reasons for trading is that you have full control over yourself.
Probably the most annoying aspect of a “regular job” is that you necessarily depend on other people: your boss, a supervisor or even the customers. Maybe in different ways but everyone retains some controlling power over your job, your working schedule and your mental balance.
This usually leads to stressful situations, a bad attitude into your tasks and unwillingness to work just to name a few.
Trading, on the other hand, is an activity that sets you free because you become the boss of yourself.
No one else has control over your tasks, your schedule, your decisions.
For most people who become part-time or full-time traders, trading is perceived as a liberating factor and this alone is able to significantly boost their motivation and performance.
2- You can prosper regardless of the economy
We all know that the economy follows a cyclical schedule – there are times of expansion and times of contraction.
Consider the period between the Dot-Com bubble and the Financial Crisis of 2007-2008: the economy initially started to grow at a moderate pace to accelerate shortly after and consistently expand through the years.
The economy grew, jobs were created and confidence into the economy expanded every single day. Unfortunately, these were all prerequisites for a Market Crash and for the economy to significantly contract.
If it is true that the Financial Crisis (and any other economic contraction) had a devastating impact on the so-called “real economy”, it is also true that the same situation was an exceptional opportunity for Market participants.
A great advantage of trading is that you can profit when the economy grows but also when economy contracts.
This is possible because the Markets move every single day and, as a trader, you do not care whether the price moves up or down.
You stick to the evidence of the chart and trade according to a few quality indicators.
3- You can become a top trader regardless of your background
To become a physician you need a degree and many years of training. To become a professional trader you don’t need to go to college.
There is not a college that will teach you how to become a trader and recognize you such qualification.
The good news?
You can become a professional trader anytime, regardless of your background!
The web is full of free resources (just like this blog!) that will introduce you to trading and guide you through your learning process up until you become a professional trader yourself.
Moreover, during your daily Market analysis and trading activity, you can always rely on indicators that are used by a vast multitude of fellow traders and have been tested throughout the years.
Whether you are a young student or you’re considering to give a new opportunity to your career, trading is the activity you can start today, regardless of your background.
4- You control your time
If you have a 9-to-5 job your free time is limited to a few hours per day.
If you’re a morning person you can cut out some time for your family and yourself during the early hours of the day while if you usually go to bed late at night you will probably find that time during the night hours.
Either way, your free time is limited and your working schedule is rather fixed.
When you trade, instead, you are free to plan your very own trading routine and take multiple times of the day for yourself.
In fact, the Market offers opportunities every moment and every single day so there is not a fixed time for everyone in which you should stay in front of the charts.
You are free to take your time and understand what trading routine works best for you!
5- You decide the risk
Most people believe that trading is risky and so they tend to stay away from it or delegate the task to a trusted institution.
What they do not understand is that they can have full control over what they are risking.
It is true that in trading you can make a lot of money but you can also lose a lot. However, the amount you decide to risk is always under your control. You don’t necessarily need to put your capital at risk at first. Actually, you should not!
What you can do is to build confidence with time maybe risking $100 or even starting with a demo account where no money is risked at all.
The more you learn about trading, the more you will feel more confident and the more you will be able to increase the risk.
This, however, is something you can do progressively and which you ultimately always have control on!
6- Markets will always exist
Businesses come and go, Markets will always exist.
It’s very simple but also true.
How many popular businesses in the past ultimately failed or went bankrupt?
To name a few in the recent decade, think of Blackberry, Nokia, Kodak. They were all leaders in their respective industry but, due to lack of innovation, they ultimately went through very bad times.
On the other hand, Markets will always exist and with the companies above, Markets even profited when their business went through bad times.
Essentially, as long as we live in an open economy, the Markets will always exist, fluctuate every day and be there for everyone to take advantage from!
7- You can build a real passive income
The last among the top 7 reasons for trading is the pinnacle of all: to build a passive income!
At first, trading seems difficult and maybe the small amounts you put to risk do not justify the whole activity.
However, the more you grow your account the more you will have amounts which you can then allocate towards longer-term investments and build a real passive income!
Does it sound counterintuitive for a trader?
When you have rather large amounts to invest you have two big opportunities:
- Let your capital grow while doing nothing – you just need to take a good decision at first by picking a good asset and you’re done for a very long term.
- Take the dividends – if you choose an asset that pays dividends you can use them to maintain your current lifestyle or you could decide to automatically reinvest them creating a compounding effect.
At this point, trading becomes a free activity that injects fresh profits into the accumulated capital.
If you think that a trader should not think of investing later on in his career, think of what Warren Buffet did during his life!