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Six Questions To Ask Yourself Before Trading Full-Time

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The aim of many new traders, as well as those that have been trading for a while, is often the desire to go full-time, to be able to trade instead of working a 9-5 job, getting rid of your boss would be a dream come true. It is certainly something that is possible with trading, but there is a lot that needs to happen before you can even consider going full time, a number of questions that you need to answer before you know whether going full time is right for you. It also comes with many risks and things that you need to consider.

So let’s look at a few of the questions that you will need to ask yourself, of course, which ones you want to take notice of are up to you, and each individual will put a different weighting onto different questions, but consider them all to see whether they are actually ready to go full-time.

Are you consistently profitable?

Let’s be honest, the prospect of getting rid of your job is a strong pull to going full time, but are you currently making enough to sustain your lifestyle without a job? We have seen people jumping into full-time trading when they are just about breaking even or making a few hundred dollars each month. That is not exactly the same income that you were making with your job. So you need to consider whether what you are bringing in is enough to keep you going, if it is not, then I would strongly suggest that you wait before going full-time until you make enough to cover your entire living costs and have a little extra for yourself afterward. Quitting your job to trade and not making enough will only land you in some serious financial issues with the potential of actually losing where you live from not making enough for rent or mortgage payments.

Do you have any savings?

This kind of works along with the previous point, do you have some savings that you can use in case things do not go the right way every single month. It is vital that you have a little on the side in a savings account that you can use to help subsidize the months that you did not make enough, we would suggest that you have around 6 months worth of bill and food money available in a saving account before even considering that you are going to go full time. The last thing that you want is to go full-time and to then realize that you aren’t quite making enough and you are short of your rent this month, not having those savings available will mean you will be forced to go into debt and potentially look for another job, so ensure that you have that backup available, it will help reduce a lot of the stress that comes with trying to financially support yourself through trading.

Do you have enough trading capital?

Once again we are looking at money, so let’s imagine that you have some decent savings available, three to six months worth of your rent, but do you also have enough to trade with? There is absolutely no point going full-time if you have a trading account balance of $1,000, you are not going to be able to make enough to sustain your lifestyle. You need to ensure that you have enough money available in your trading account to allow you to make enough profit to live off. The more you have the more consistent and better risk management you are able to use. It would be far more sensible to have a trading account of $100,000 rather than $1,000, so make sure you have enough to realistically make the amount that you will need to live off.

Are you mentally prepared for trading full-time?

Trading full time can be stressful, it can be very stressful. When you trade at the moment, the only thing that you are risking is the balance in your trading account, but when you go full-time, you are risking not only that balance of that account but also where you live, in terms of the rent and being able to pay it. This adds a whole new level of stress to your trading, it can cause frustrations and it can be a very stressful and difficult situation. How do you deal with stress? How do you deal with loss? Do you easily become frustrated? If you struggle with any of these then there will certainly be times when trading full-time really puts you under pressure, and if you are not able to deal with it or work out ways to reduce them then you will surely struggle long term. So ensure that before you go full-time that you are able to deal with these emotions and feelings.

Do you have support around you?

Trading on the best days can cause a lot of stress on you, and trading is also quite a lonely experience which is not a great combination as it can lead to a number of different mental and physical illnesses. Due to trading being such a secluded activity, it is important that you have people around you that you are able to talk to, this can be people on line, family or friends, as long as there are people there that you can talk to and to vent some of your frustrations and ultimately to get a little help, especially when feeling stressed or frustrated. Simply talking to someone allows you to get that out and can often act as a distraction and a way to clear your mind, you will certainly need those times and those people to help you through your trading career.

Do you understand the risks?

There are a lot of risks when it comes to trading full-time, we have spoken about some of them above but are using this opportunity to really push the idea of how risky trading as a living actually is. There are so much pressure and risk in it, your entire livelihood is being put on the line If you do not have enough savings to sustain you through the months that are not profitable (and there will be some) then you will seriously struggle with paying for basics such as rent which could ultimately cause you to lose your home. You will also lose a lot of your social interaction, trading is a lonely job, so doing it for hours each day can isolate you from others, causing all sorts of potential mental health issues. You will be under stress and you will have financial issues if you have not planned for it properly.

So those are some of the things that you will need to think about. Going full-time is a huge thing, it is something that a lot of people aim for and dream of. However, it has such high requirements and the risks that come with it are huge, it can ultimately make or break your trading career and if things go wrong, even your current lifestyle. If you are thinking of going full time, then make sure you are ready for it and make sure that you have a backup plan ready, it is vital for your survival and to make the transition as smooth as possible, if you do decide to go full-time, then we wish you the best of luck.

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