Going full time with trading

Most who want to day trade do so in hopes of doing it as their full-time job - few see it as a hobby, and rightfully so.

I have a lot to say on this topic, but in pulling my thoughts together I stumbled upon a good writeup by the guys over at Tradeciety, whom I’ve known about for years and have been a longtime fan of. Though I don’t trade the same markets or share all of their philosophies, I thought their writeup on going full time with trading was worth sharing.

The full write up can be found here, but I’ve included my favorite bits below. I hope you find it insightful. Let me know in the comments below if you agree with their thinking or if there’s anything you’d add or subtract. I don’t agree with everything they’ve said in the original article, so feel free to reference that as well in the comments.

Have a great weekend!

FTT

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ARE YOU A RISK TAKER?

First things first; are you really made to be a full-time trader? Dealing with drawdowns and not generating income for weeks is common and regardless of how good you are as a trader, you will experience such periods.

Trading can be compared to entrepreneurship where you can’t predict your next month’s sales and how much money will end up in your pocket. Not everyone can deal with such uncertainty and as a trader, you have to be self-aware and audit yourself. Don’t worry, if you are not a pure risk-taker, read on – we provide more tips on how to still make trading work for you.

IS YOUR TRADING ACCOUNT LARGE ENOUGH?

Only if your trading account is large enough, you will be able to make the transition to full-time trading. Here it is also important to know your historical performance; how much return can you generate per year with your trading? After knowing the numbers, you can reverse-engineer how big your trading account needs to be in order to achieve a certain annual income.

As we have said in the previous point, trading is dealing with the unknown and although you can have a proven track record and a large trading account, you will experience months where you just can’t create any income.  Having separate accounts for your trading, savings, and spending is highly recommended.

HOW LONG HAVE YOU BEEN TRADING?

If this all doesn’t bother you and you are determined to make it, great! But there is one more thing we need to address: the amount of experience you have as a trader plays a critical role. Financial markets move in cycles and most new traders have never experienced a full market cycle. If  you have only been exposed to a bullish market period, a market sell-off and prolonged bearish market moves can easily ruin your game and prove that your system does not work under all conditions.