By Admiral Markets

Dear Traders,

I often get asked about giving up your day job for trading.

I know that It has been a dream for many traders, and there is really scarce information about the consequences of full-time trading.

Trading Forex full-time is hard, and trading Forex with a day job is still possible.

I will explain how.

Usually, about once a month, I get an email from an aspiring trader.

He is convinced that he will be able to trade for a living within two or three months.

These wannabe traders typically have an elaborate plan detailing:

1.how many pips they will earn per month

2.how much money they will make; and

3.how soon they will be trading for a living.

For a moment they ignore the fact that they have no experience trading actual money.

The problem with these traders is that they typically have less than 3,000 USD in trading capital.

They all have an idea of what they need to earn in order to trade for a living…

…and have done the math based on pips…

…to determine how long it will take them to get there.

The problem is that market gains are never linear.

These traders are making the assumption that they will be able to return nearly 100% on teir money month after month, with only couple months of experience.

The likelihood of that happening is equal to zero.

I will discuss six major considerations to make before deciding to trade Forex while keeping your day job.

The workplace culture and your co-workers

There are certain day-to-day experiences in the workplace that may take your attention away…

…like conversations with workmates, meetings…

…and the internally imposed deadlines that will keep you very busy during your day job.

The majority of good and successful traders made their initial success with trading in other careers.

The greater the heights you’ve achieved in another career, the more humble a trading job may feel when you try your chances as a trader.

Think about your present circumstances.

Are there aspects of your current job that allow for a part-time trading?

How will your colleagues react if you are focused too much on trading?

What will your boss tell you if he sees you working on something that is unrelated to your current day job?

You could easily become focused on the negative aspects of a job, so try and take a balanced approach.

Think about how will you set up your workplace so that you can make part-time trading successful.

Plan this socially-based transition to ensure you are:

…fulfilled in your new circumstances…

…and happy to accept them.

Time management

While full-time traders have the benefit of devoting a complete work day to their ideas, the part-time trader is rarely just focused on the market.

Because of this, time management is of the essence:

…part-time trading essentially equates to having a second job…

…however, it doesn’t have the same time commitment as the primary job.

While everyone requires some downtime, the part-time trader should utilise a portion of that recreational time to search, develop, and execute their trading ideas.

Devoting just an hour or two a day to exploring new trading strategies, or simply scanning the markets for a new trading opportunities should uncover new ideas on a regular basis.

Cash flow diversification

Diversifying your cash flow, such as having the main source of income from a day job, makes it easier to let risk play out for a superior return.

Watch out for an equity curve:

…the more variable your equity curve…

…the greater the stress…

There’s often whipsaws, skydives, V reversals, and a number of irregularities that may make your trading very stressful if you don’t have a cash flow diversification.

Part-time trading should be your additional source of income, not the main one.

Be patient

I have always been saying that patience is a virtue. It helps you control selfishness, greed, and impulsive behaviours which can destroy your account very quickly.

For part-time trading, you need to be very disciplined.

Since you want to keep your day job and work on Forex trading, you should focus on part-time strategies.

Don’t even think to revenge your trade because:

…the chances of you losing focus on your day job is very likely…

…and consequences could be huge.

Remember, Rome wasn’t built in a day.

Set and Forget strategy

Traders who trade part-time should use modified Set and Forget strategies with focus on intraweek timeframe (H4 – Daily).

Why do I say modified?

Because you should be paying attention at least twice a day to gauge the price action.

Maybe you will need to protect your trade or to secure the profits?

Simply using a pure, robot-like Set and Forget might make your losses even greater:

…as the markets are very volatile now…

…even for higher time frame trading.

Below is a short video on a simple Set and Forget strategy you could use during your part-time job.

PPEE

PPEE stands for psychology, personality, emotions and experience. If a trader knows how to manage these 4 important factors, he/she will eventually develop into a fully fledged and successful trader.

Price action and understanding of charts and candlestick is just one part.

Only by respecting risk management rules and keeping the emotions under control, a trader can survive in all market conditions.

As with any other job, experience will add up.

According to Malcolm Gladwell, it takes about 10,000 hours to get good at something.

Screen time is of utmost importance, so please try to use your “spare” time at your day-job by scanning through the charts.

By trading part-time, I am sure that you will develop an interest towards Forex trading.

How is your experience with part-time trading?

Let us know in the comments below.

Cheers and safe trading,

Nenad

 
Article by Admiral Markets

Source: 6 tips on how to trade Forex and keep your day job

Admiral Markets is a leading online provider, offering trading with Forex and CFDs on stocks, indices, precious metals and energy.