Unfortunately, this brand of independence isn’t for everyone. Just like too much freedom can do more harm than good for some economies, not all traders are ready to trade full-time.
So how do you know when you’re ready for full-time trading? From what we’ve seen from online forex communities, we can narrow it down to four signs:
1. You have enough capitalTrading full time means that you’ll be quitting your job, your primary source of income. And, because you’re realistic, you know that you probably won’t be making any serious trading money in your first few months.
Now imagine months of not getting salary and not making profits while STILL having to pay for your food, rent, utilities, and Netflix and Hulu subscriptions. Can’t live without your salary yet? Can’t afford to take big drawdowns for weeks and still maintain your lifestyle? Don’t trade full-time.
2. You have tried and tested other methods and strategiesTraders say that full-time trading just means that you’re a part-time trader and a full-time backtester. In a way, this is true.
Full-time traders know that you can’t make your living off of one good strategy alone. Not only do you need to have a strategy that has proven to be profitable for you, but you also have to have other equally qualified methods that would work for other trading conditions. After all, you never know when and for how long the market trends will shift!
3. You have spent a considerable amount of time trading LIVE.Just like how doctors, lawyers, and pilots have simulations and internship programs before they do their jobs round the clock, traders should also spend a considerable amount of time trading live before trading full-time.
Trading a live account brings forth trading psychology hurdles that you wouldn’t get from trading demo accounts. In addition, you have to have a fairly good grasp of your trading strengths and weaknesses, and, more importantly, you should know how to stick to a trading plan before you make trading your full-time job. Make sure you’re mentally prepared to risk real money and maintain your trading strengths before you trade full-time!
4. Forex trading is your passionTrading currencies is what motivates you to get up and get busy every morning. If you’d rather trade the RBA statement than watch the NBA finals or visit the PBoC’s economic calendar than the Great Wall of China, then do yourself a favor and trade full time. No sense in not doing what you love, right?
Remember that while full-time trading would provide you more opportunities to catch market movements, you don’t need to be a full-time trader to be consistently profitable. In fact, I know of part-time traders in the BabyPips.com community that are better than some full-time traders! In the end though, it just boils down to how much money, time, and effort you’re willing invest in your forex trading career.
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