Day trading is not something that should be taken lightly. It takes years of building up enough knowledge about trading to make a success of it. Thus, many part-time traders walk around with one question on their minds; should I quit my day job and become a full-time trader? Ray Francis, a senior trading adviser at Olsson Capital has had many of his clients ask the very same question. According to him, the answer is not as simple as it seems and here is why he is saying that.
Trading knowledge and experience
Those who do not form a part of the day trading pool may think that in order to be a trader, you need to have some form of degree. It may be true in some sense as you need to build up as much knowledge as you possibly can in this regard. However, even if you don’t have a trading background or floor plan, you can still build up knowledge via media, trading experts and seminars.
Preparing to be a full-time day trader
You can’t simply walk out of your day job, go home and open a brokerage account to start trading. You need to give yourself, at the bare minimum, a window of about six months to get all your affairs in order. This includes getting enough capital together to start your venture. When wanting to trade-full time, you should have already started trading part-time a while ago so you can find out if this is what you want to do. You should also have spent several hours per day for a period of time watching the markets, playing them and making trades.
Your mind needs to be in the right place
Have you ever heard the saying, ‘I lived to trade another day’. In order to make a successful full-time day trader, your mind needs to be in the right spot. You need to be prepared to take risks, be willing to lose out every once in a while and not to let a profitable trade go to your head.
There are good months and bad months
As you will now be in control of your own business and operate as an entrepreneur, you need to know one thing; you are going to have good trading months and bad ones. In the bad months, you need to make sure you have enough money set aside to still make a living from. It is during these months you should revise your trading strategy and find out why your trades are not giving you the returns it did when capital came easier.
Before you make day trading your full-time job, you need to have the right type of support. This can include a brokerage firm or an expert contact willing to share trading secrets with you. Take caution, however, as some individuals may want to push your trading buttons as to fuel their own agenda.
Practice makes perfect
As mentioned above, you need to have a trading background of some sort in order to trade full-time. Practice makes perfect and in the trading world, it is exceptionally important to remember. If you are a part-time trader and wish to test your skills, open a demo account with your brokerage firm and practice while using virtual money. This will give you a good indication whether you’d be able to make it in the trading pool.
If you want to day trade, you also need to consider Forex trading as these markets are open for 24 hours a day while as many others have an opening and closing time, limiting your trading time. With Forex being open at all hours, you can divide your time up into sections so your day doesn’t become too cluttered with all you need to do as a full-time trader.
Ray suggests that if you take the above-mentioned points into consideration, you can be sure to answer the question; should I quit my day job to become a full-time trader? If the answer is yes, you need to roll up your sleeves and get trading to make a profit from your brand spanking new career!