There are plenty of day traders out there who have quit their jobs to become full-time traders. Many of them engage in various forms of online trading to utilise the profits that they make for a living. However, some people are still at crossroads. They still don’t know when is the right time to make trading online a full-time job. Even the few who have already made up their mind still don’t know where to start.
Some considerations will come into play once you decide to become a full-time trader. In this article, we discuss the essential steps that you need to take and what you are required to do if you want to become a successful full-time trader.
Gaining some form of training in online trading is crucial if you want to be a successful full-time trader. Make sure you are properly equipped with the right knowledge and skills before you quit your job to become a full-time trader. The form of online trading that you want to specialise in. Whether you want to trade Forex, CFD trading or stock trading, having in-depth knowledge is crucial.
Take your time and evaluate your chances of succeeding. By the help of an expert, you should start developing the proper expertise before you consider trading as a full-time job. There are lots of free and paid resources online that can get you started on your quest to become a successful trader.
Becoming a full-time trader means leaving your job which is a guaranteed source of income. This isn’t an easy decision to take since you are moving into the world of uncertainties. You are moving away from the 9-5 routine monotony. However, if you want to take up trading on a full-time basis, you need to come up with a comprehensive financial plan to avoid running into a crisis.
Before you settle on full-time trading, make sure that you have saved enough money to cover your expenses for at least one year. By doing so, you won’t be stressed if your trading isn’t profitable in the early days. You won’t be trading to pay rent or buy food. You have enough time to analyze market trends and make smarter choices. Your daily needs aren’t jeopardized even if you make a loss.
Make sure that you have saved enough money to cater for your rent, food, utilities, cell phone bills, insurance and even entertainment. If you are running on a budget of £3000/month, save as much as £70,000 before you jump into full-time trading. Some trading ventures such as Forex and CFD trading are risky, and you may take a considerable amount of time before you start realizing profits.
Gain some meaningful Market Expertise
It is impossible to dive into trading and start making sums of money equivalent or more than what you were earning as a salary. You need to be educated how the market works. In some cases, the stock market is more of a zero sum game. This means that someone has to lose for another person to gain. You have to be cautious not to be the one who is losing and helping other traders balance their cash books.
When it comes to trading, the sum of money in the market is from the merchants who invested their hard earned money. The logic is simple, if you are making a profit, someone else is making a loss and vice versa. In the zero sums game, experienced traders are in constant need of novice traders who are willing to try the market without much information and expertise so that they can easily lose money and make them gain.
At any given time, 90% of the people in the market are losing money to only 10% of experts. Don’t make a mistake of entering into the market without prior market expertise since it will be hard to move from the 90% to the 10%.