Like any other business, forex trading has its pitfalls that could eat up the hard-earned money of newbies who have jumped into it without enough knowledge and preparation.
If you’re determined to make full-time trading work for you, then here are four simple steps you can take:
1. Ask yourself if you’re ready for full-time trading
Consider the logistics of trading full-time.
Do you have enough capital? Picture going months without a salary or profits while still covering food, rent, utilities, gym, and Netflix.
Can’t live without your job yet? Can’t afford to take big drawdowns for weeks and still maintain your lifestyle? Don’t do it.
Have you spent enough time trading live? Before you take the plunge, make sure that you’ve found brokers that you can trust and trading strategies (yes, that’s plural) that have yielded you profits across all types of trading conditions.
Of course, it goes without saying that you should have experienced being CONSISTENTLY PROFITABLE before trading full-time.
Shifting to full-time trading also requires conviction. Do you REALLY want to be a forex trader? You shouldn’t just trade because you know that if you don’t, you won’t have a day job to go back to.
Are you prepared to weather months of not making money? How about doing forex-related research all day, every day? If you think that you’re only in it for the profits and lifestyle-friendly hours, then you shouldn’t take the leap just yet.
2. Make realistic goals.
Once you’ve committed to full-time trading, start setting clear and realistic goals.
It’s tempting to picture instant riches like cars, yachts, or even A FEW DOZEN EGGS, but success takes time.
Look into how long it took other traders to go full-time, then base your trading goals on your own track record and future market expectations.
From your part-time profits, can you sustain a trading lifestyle? What returns are you aiming for in one year? Five? Are they actually doable?
3. Prepare for a lifestyle change
If you want to be a full-time trader, make sure you’re mentally ready and that those around you are, too.
Unless you’re trading with friends or in a coworking space, you’ll likely be at home, and home-based trading comes with its own set of challenges.
Ask yourself the following questions:
- Are you okay with trading alone all day, or do you need more interaction in your daily routine?
- Can you focus even with distractions like game consoles nearby?
- Can your parents, spouse, kids, or housemates respect your workspace and time?
- Can you stick to a regular schedule while working from home?
If you’ve said “NO” to at least one of these, then you might want to make adjustments before trading full-time.
4. Treat trading as a business
The most difficult part of full-time trading is remembering to treat it as a business.
Sure, you can wear muscle shirts and pajamas in front of your screens, but that doesn’t make full-time trading anything less serious than any other source of income.
Establish an office space, minimize distractions, and be disciplined about your “working hours.”
More importantly, keep track of your expenses (spreads, trading platform, broker fees, etc), monitor your profits, and keep a trading journal to track your mistakes and progress.
Making money from trading alone may sound daunting and exhausting – probably because it IS daunting and exhausting!
When you’ve mentally and financially prepared yourself and developed a trading framework to guide you to profits in the long run, then you’ll be on track to achieve financial independence through trading.
