What are the expenses for a trader, or why become a trader?
In today’s article, we will look at the costs associated with trading, what it entails, and why trading is the best possible business for a certain group of people.
Trading as a business is one of the least demanding forms of entrepreneurship in terms of operating costs, bureaucracy, amount of tied-up capital, and other concerns associated with regular business, which makes it a big attraction on the surface. However, only a small group of people ultimately succeed.
Let’s take a look at what a beginner and later a good trader actually needs in order to trade, and whether funded accounts from prop firms are a suitable or sufficient solution for a successful career.
- Computer, notebook, tablet, or phone, and possibly a VPS. A large PC or notebook and VPS are clearly the most ideal, along with a mobile phone as a necessary backup for internet or other technical issues. The price varies according to the user’s needs, but for trading, technology worth around 1,000 euros and a VPS of around 10 euros per month are sufficient.
- Internet – who doesn’t have it today? The price is around 20 euros per month, and it is ideal to have at least one backup, such as mobile internet or another provider, neighboring Wi-Fi, etc., so let’s say 30 euros per month.
- If you are a futures trader or for some reason need real-time paid data from exchanges, then you need to factor in an additional 15-100 euros, depending on what and where you are trading, but we are focusing here on Forex and CFDs, and you do not need to pay for this data.
- You also need somewhere to live and eat, so the classic living expenses, depending on how demanding you are, will be 200-5000 euros per month.
- If you are a beginner or an experienced, still unsuccessful trader, and you are not a masochist, or have not been pulled into this by a nasty broker like a wolf from Wall Street, then you will need a lot of reasonable education that will save you time and money. Here, you may encounter some problems with what good education is, and the answer to that is very difficult to find. In any case, forget about what is free – it will only help you understand how it works, what is what, etc., but you will likely never build a path to profit with this kind of education, and the price of free education will therefore be very high. How much will it cost? Reasonable education, mentoring, etc., if you hit the nail on the head the first time and it is your cup of tea, it will cost you 500-2000 euros, but if you do not hit the nail on the head and keep changing it, it could cost you up to 20,000 euros. What is important is how responsibly you approach all of this in the end. We can include our training programs and multi-level challenges of other prop trading firms, which require adherence to basic and essential risk management conditions with large capital, as part as education with the addition of mentoring. This in itself is valuable practical education with a sweet reward.
- The capital required for margins and losses is already a very individual sum and will be completely different for each person. However, every reasonable trader must consider that they will have long periods of losses that they must survive somehow. A few hundred euros are enough for margins and miracles can be done, but for reserves and reasonable management around it so that a person doesn’t starve during tough times, thousands to hundreds of thousands are required… everyone has it differently, as we know. And here is one of the main reasons to look for an online prop trading firm and funding options, because most people simply do not have sufficient capital to trade successfully and make a living in the long run.
- It is also necessary, of course, to pay brokers, banks, wallets, etc. here it is better to take it in percentage. Brokers can cost up to 40% of your capital if you are doing it wrong and banks, wallets can easily cost 10% if you are doing it wrong, but conversely, if you know how to do it right, you can get brokers down to 0.5% and banks almost to zero.
- Something for administration, accounting, etc., depending on whether you are doing it in our country or abroad, as a company or as an individual, or mixing it up, or not dealing with it… It will range from 0 euros to…… euros per year.
- Depending on whether you have a job, a company or nothing, then also health and possibly social contributions, it can range from 10 euros per month to a standard 70 euros, but it depends on the country in which you live, trade, have a company, etc.
- That’s basically it, no salaries, goods, unpaid invoices, warehouses, rent, etc. Nothing where you have to hold a huge amount of money. This immediately brings us to why being a trader, which has already been described many times, mostly overly glorified, to make trading look like a stellar business. It’s not that rosy, however, trading has many advantages and for a certain group of people, it will always be something unique and irreplaceable, and in combination with funding and trading through an online prop firm, it can be a very good business model.
So, you basically don’t need any traditional school.
You don’t need employees, merchandise, people, nothing. Just peaceful environment, a computer, capital, or funded accounts.
You can basically work anytime and anywhere.
No boss or customer.
And that’s basically it. The path to success in trading is very difficult and only a few people can handle it, but today, when a person doesn’t necessarily have to risk their capital, the path to success is significantly simplified.
Good luck to all trading and prop trading enthusiasts. Whenever you want, you can join one of our training programs and become a trader for our firm. We look forward to seeing you and wish you the best of luck.