Trading As A Hobby

Trading as a hobby is rarely thought of as a viable way to interact with the markets. It has a connotation that the trader is not serious and therefore doomed for failure. But that is not true.

People can do a lot of activities in life purely as a hobby and find great success. It doesn't mean they don't have great passion or put energy into the activity. They do. But it means they don't focus their entire life on the activity.

Trading is a perfect activity for such. Unless you absolutely love trading, you should consider making it a hobby. By "love trading" I mean you are inspired by markets every second of your life. You never tire of the same activity.

For the vast majority, total immersion in markets leads to burnout. The emotional rollercoaster will wear on you. To the point where you simply cannot make good, unbiased decisions.

Trading as a hobby also allows diversification from an income standpoint. It gives you the opportunity to do other activities that generate more stable income. Which takes away the pressure of the next trade. The mortgage payment is already covered when you enter that next trade. You can afford to enter a period of drawdown for example. And not waver or alter your strategy.

And thanks to automation pretty much anyone can now trade as a hobby. The barriers to entry are greatly reduced. There's a learning curve for sure. And you'll take a year at least to get a system ready for production but that's the greatest investment.

Technology costs are no longer a barrier. Programming languages are no longer a barrier. And you don't need to learn a formal language like C# or Python as recently discussed. You can even set up monitoring that allows you to no be present while you trade.

What this means is you can now explore many trading styles. Personally I was never much of an intraday trader. For many reasons, my psychology was such that I would swing trade with options. But no longer.


I'm now intraday trading bonds, analyzing every tick to determine whether I should go long, short or flat. I live 2,000 miles roundtrip from the exchange but am able to not only fill a position but enter an OCO order within 200 milliseconds of any tick. All while I am not staring at my machine.

I'm no longer held captive by trading like I had been before. I have freedom to think outside the box. To explore other activities, interests and goals. And most importantly, to not worry about the mortgage payment. I can simply let my system trade while reversion to the mean plays out over time.

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