Full-time trading is the ultimate goal for almost every person that starts trading stocks on their own. Everyone wants to quit their job so they can go trade stocks on the beach. The reality is that transitioning to full-time trading and building up the requisite skill takes time. Making the change before you are ready has disastrous consequences. For this reason, we wanted to make an entire blog dedicated to tell you about how and when to start trading full-time.
The first thing that you must prove before you begin full-time trading is prove you can extract enough income from the market so you can survive comfortably. You must be able to demonstrate that you can extract consistent income from the market and make enough money each month to cover your expenses, and ideally create savings as well. You cannot just have a couple green months and think that you’re ready to quit your job. If you cannot make money consistently from the markets over an extended period of time you cannot go full-time.
Ability To Keep Your Gains
Trading for a living is just as much about preserving your capital as it is about having consistent winners. In addition to proving that you can make money consistently, you need to prove that you can keep your gains. Trading is not like a normal job where you get paid hourly and you can only make money. You can undo weeks or months worth of good trading in one bad losing trade.
Losing trades are inevitable in trading. You have to prove that you can keep your losers small in order to go full-time. Otherwise you will always be living with that uncertainty that you will give back all your gains in a short period of time because you cannot trust your ability to cut losses.
You must show that over the course of a whole year you can finish green, and that you make enough money to survive off of. Building up the skills to navigate the markets consistently takes time. You cannot think that short-term results in your trading are indicative of your ability to do this for a living. Your focus should be on your weekly and monthly PNLs, not how much money you can make in one day. Trading consistency is not an overnight process. It takes months and years to achieve. For this reason, your plan to transition to full-time trading should be measured in years, not in days or months.
Side Income and Savings
Having savings and income outside of trading is not essential for successful full-time trading, but it definitely helps a ton. The stress of needing to make a certain amount of money from the market will often cause you to make poor trading decisions. You cannot control when opportunities will present themselves in the market. If you are stuck in a situation where you need money to pay your rent but there is no trading opportunities, you will likely force trades and end up losing money instead of staying on the sidelines. This is one of the issues of having just the market as your only source of income.
For this reason we recommend having a side income while you trade or have at least one years’ worth of savings in the bank before you go full-time. This will allow you to be patient for opportunities in the market and not force trades, since you have the money to survive without needing money from the market.
Sign Up For The Free 4-Day Live Course
Developing the skill to trade stocks for a living takes time to perfect. We will go into more depth on how to transition to full-time trading in our free 4-day live course starting this Sunday. If you missed our last post of the Bulls Elite Series on how to align your trades on multiple time frames, you can check it out here.
Reserve your seat for the free 4-day live course here.
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