“Am I ready to become a Full Time Trader?” This is a question that comes up frequently in trading groups and Facebook posts. If you have traded successfully for a while, you may have had that question creep into your mind as well. After all, becoming a full-time trader has many perks. There is no boss to answer to, no deadlines, work when you want to work from where you want to work. Want a day off? No problem! Trading also gives you the ability to have an uncapped opportunity to increase your income and freedom that many of us crave.
There is no doubt that trading as a profession has many benefits. With those benefits, there are also some pitfalls. Poor performance can lead to losses. Losses can lead to stress. Those days off that were mentioned? Well, you don’t get paid if you don’t work. We have some suggestions that can help to mitigate some of the pressure of making the transition from Part Time Trader to Full Time Trader.
- Have a consistent strategy that has proven to give you steady gains. Having a strategy is imperative to long term success in trading. Your account should steadily be increasing each day that you trade, with only minor pullbacks on those few days that you may take a small loss.
- Have another source of income or savings to cover you for several months. Nothing is more stressful than trading for that mortgage payment that is due on the 1st. Having a spouse that can cover the bills or having saved funds to cover several months of bills can take some of the pressure off of having to make immediate money.
- Start with an account size that gives you some cushion for error. Trying to trade full time with a $1000 account may not give the desired results because there is very little room for error. Just 3 bad trades in a row (and/or not using stop losses) can wipe out an account of this size. Remember, even established, successful traders have off days. **Note that the money in the trading account should be separate from the money that is saved for bills.
- Find a mentor or group of traders that have experience and currently trade full time. Most jobs provide some sort of training before they have the employee begin work on their own. Trading should be no different. It’s not impossible to do on your own, but having a mentor can increase the chances for success.
- Treat trading as a real business. This may mean spending some time and/or money getting a proper Brokerage Account, a reliable internet service with possibly a backup, having the necessary computer equipment. That old reliable computer from 1990 probably can’t handle the memory hogging trading platforms of today.
- Be realistic and set goals. Setting realistic and obtainable goals is needed in order to develop consistency. Putting an entire account into one trade because “I know this stock is going to go up” is not a consistent strategy and will likely prove detrimental to your account at some point.
Making the transition from Part Time Trader to Full Time Trader can be scary prospect. However, with the proper preparation and dedication, it can be extremely rewarding.
Have questions? Many of us at Edumomo have made that transition from Part Time to Full Time trader. Feel free to ask us any questions you may have on our Facebook page.THIS POST AND ALL CONTENT ON THIS SITE REPRESENTS OPINIONS ONLY AND PROVIDED FOR EDUCATIONAL PURPOSES ONLY. CONTENT SHOULD NOT BE CONSIDERED ADVICE OR A RECOMMENDATION TO BUY OR SELL A SECURITY. PLEASE SEEK ADVICE FROM AN INVESTMENT PROFESSIONAL.