How to Trade Stocks from Home

When someone asks me what I do for a living and I say "Trade stocks," the next question usually is "Like, daytrade?" or "Really? Whom do you work for?"

Most people think that all stock traders live in the fast lane, always buying and selling, surrounded by multiple monitors blazing with live charts and blinking symbols, moving millions every day. We are all familiar with TV images of traders with two phones pressed against their ears, frantically shouting and gesticulating seemingly to nobody.

Some do work that way. Not me. I neither daytrade nor work for anybody. I trade from home for my own account. I get by with just one monitor; and I garden, run errands, work out, read, and work around the house - all during trading hours. I follow my own system, and I also run a small online business providing timely stock picks to part-time traders.

As legendary trader Jesse Livermore said, "It's not the thinkin' that makes you the money, it's the sittin'...," meaning that to produce big gains, you have to sit tight in your positions and NOT trade or panic. The sitting at home suits me just fine. In fact, the less I trade, the better I do. Excessive trading (and thinkin') is induced by external stimulants, such as news and opinions. You limit the input, you get jerked around less.

As is, we have more information at home than we need for trading: CNBC, Jim Cramer, financial websites and radio talk shows, plus twits, emails, and chats. Besides, TV infomercials touting surefire trading systems that will make you millions with a couple of mouse clicks, loss-free penny stock email come-ons, and local seminar invitations for "serious traders" are constantly implying that we are not doing as well as we should. The problem is, most of this stuff does not add value and certainly does not make you money. So I cut it out. I don't watch CNBC (in fact I don't even have cable), I don't read online publications (except for Investor's Business Daily and Drudge), I don't attend investment seminars (well, I may consider one if the lunch menu is good), and I don't care what Jim Cramer thinks. So if you think that trading from home puts you at a disadvantage by isolating you from market action, think again. The solitude and the ability to cut out what you DON"T need actually is a huge advantage.

I know more and more people trade from their smart phones while on the road or on the job. I don't know how they do it. To me, trading from home means having a quiet place and a block of time so that I can concentrate on my research without interruptions.

So all you really need (besides a trading account and a home office) is a fast Internet connection, a system, a few critical inputs from reliable sources, and a daily/weekly routine.

Unlike institutional traders in the straightjacket of office policies, production goals, and peer pressure, you are truly your own man. You set your own hours and goals and decide how much pressure to take. The market is too big for anyone to be equally good at everything. By specializing, you can develop a system that best suits your lifestyle - your needs, goals, temperament, and resources - and implement it at your own pace.

But you must have self-discipline. There will be no weekly meetings, quarterly reviews, or motivational seminars. At the end of the day (or month, or quarter) all that matters is your account balance. You must be honest with yourself, take the responsibility for your actions, and correct your mistakes to avoid financial ruin.