Introduction
Let’s picture a first-year student that has started to learn about online trading. After two years of testing different strategies, they go live. As luck would have it, they maintain consistent profits in the live account month after month.
Yet, right after graduation, a job opportunity arises. What now? Trading with full time job may seem an impossible feat. After all, there is the fear of losing your occupation if you get too consumed by the markets.
But this is where the mistake lies: many people liken trading to an actual job. We have intraday strategies like scalping that make the trading process seem like too much effort.
Yet, with more long-term approaches like swing trading and position trading, trading with full time job is quite possible and can be a tremendous monetary addition. There are several misconceptions about juggling a regular nine-to-five with online trading that we will clear up, along with other key considerations.
1. Realizing trading itself is not a job
In this trading with full time job discussion, let’s first start with the largest misunderstanding that some people have. Many often liken trading to a regular nine-to-five, but what do we mean here?
A standard office-based career of permanent employment has set hours. As a worker, you expect compensation of a guaranteed income after a fortnight or month based on your hourly input in the company.
Unfortunately, it doesn’t work this way in trading. The amount of input has no quantifiable correlation to the output. In other words, more time spent on the charts doesn’t translate into more money.
Someone who only spends an hour weekly watching the charts can net more profits than someone looking at charts all day. And this is the fantastic part about trading. Once you spot the right opportunity, there is no need to engage with charts as though it were your job.
The monetary potential with only a small time investment can outpace the average worker’s earnings.
Still, the most crucial thing to understand here is that no one can guarantee potential income in any defined period, no matter their level of technical skill. A trader must first wait for a trading opportunity, whether for a few minutes, a few hours, or days.
Even then, no level of confidence in a particular set-up will tell you the likelihood of your position working favorably. There is too much uncertainty, which is a massive challenge when you consider trading full time.
When you have a conventional job, you are at a much better advantage because trading isn’t your only income source. This means you have less pressure and can make far better emotional decisions.
You have enough to keep you busy where overtrading isn’t possible. Plus, you can invest much more financially into your trading business and scale up faster than other traders without traditional occupations.
Many people seek to quit their jobs to become full time day traders or swing traders. However, only a minority can be successful here, where trading full time covers their living costs comfortably.
This is why having a proper job is beneficial. A stable source of income allows you to meet your minimum living standards without the high market uncertainty.
The overall takeaway is that you can do many things outside the markets while never missing out, making trading with full time job a feasible reality. A key enabler here is using a long-term strategy.
2. Implementing long-term strategies
Many investors wonder whether day trading with a full time job is possible, to which the answer is no. Yet, swing trading with a full-time job is a much better option, which is the advantage of longer-term strategies.
Even swing trading as a part time job is possible. How so? It boils down to time capacity. We know that permanent employment requires the person to be occupied for many hours daily. This is often above the working hours when we consider preparation efforts and commuting (if the job is not remotely-based).
With so much activity, finding even a tiny window of time to check the markets becomes challenging. Yet, with strategies like swing trading, it becomes easier to manage your trading and professional career at the same time.
Swing traders seek to capture short to medium-term gains over several days to weeks. This trading style relies on higher, ‘slower’ time-frames, typically from the H4 to the monthly. Here, the price action is calmer compared to the franticness of the smaller time-frames used by scalpers and day traders.
Swing traders generally don’t open more than five positions weekly, with some doing as much as one or two in the same period. If you’re trading with full time job, this is excellent news as this strategy is less time-consuming.
When you’re not working or on your off days, you can look at the charts, mapping out potential scenarios and opportunities that may play out over the next few days. You can set price, pattern, or indicator alerts at key levels you spotted in your initial analysis.
Then, you could react to the alerts during your work period by placing trades (but only if you have the time). The other alternative is to create pending orders, which will execute your positions without your presence.
Position trading is another long-term that makes being a full time trader with a job practical. This way of speculating in the markets is even more hands-off than its counterpart. Here, investors look to hold their positions for long-term gains over several months or years.
Similar to swing trading, these individuals look at higher time-frames for opportunities. What’s different is that position traders are less frequent in their execution, usually not placing more than 10 trades yearly. This much lower density of orders is perfect for a full-time worker.
The overall point of this trading with full time job discussion is that long-term strategies fit perfectly for permanent employees or people running businesses.
It may take some time to learn about these strategies. However, once you have a confident and winning formula, you only need a few hours weekly to implement them. So, you don’t have to wonder how to day trade with a full time job when you can swing or position trade instead.
3. Devoting time to checking the market periodically
While the purpose of a long-term strategy is that it provides a hands-off approach, you don’t want to detach yourself from the markets too much. Therefore, you should set aside time to stay abreast of price developments, whether it is during break times, before work, or after work.
Having a set routine is key to taking advantage of opportunities when they arise. Of course, this allocation is challenging for many and depends on your work environment.
Mobile apps
One solution is to use a mobile app. While convenient, it’s crucial to realise that mobility shouldn’t replace the need for a proper desktop when it comes to final execution.
Whether you’re a so-called full time day trader or have a nine-to-five, a phone should only be used for passive monitoring. One major drawback with mobile apps is that the screen size is much tinier than an ordinary computer.
The charting features are generally limited and slower based on this reason. So, the smaller size and capability range makes it difficult to perform proper analysis.
Another potential risk is overtrading. Many people become addicted to their phones, which can translate into the charts. Still, a phone helps you to monitor running positions, move stops, and anticipate certain price breaches. However, where possible, execute using a desktop computer (unless you have pending orders).
Weekends are your training ground
Most conventional occupations allow off days during the weekend, which is the perfect time to prepare for the week ahead. This works perfectly for most markets closed during this time, like forex and stocks.
Of course, crypto is the only exception. Therefore, if your work hours include weekends off, you could have crypto as your favorite traded market at this time, depending on your strategy.
4. Investing more capital into your trading account
As mentioned previously, an outstanding benefit of a full-time paying career is that you have less need to trade, meaning two income sources. Capitalization is one of the biggest problems of sole trading or trading with a job.
Many retail traders are trading far from five or six figures, which is their dream. Unless you come from a wealthy family or have an above-average nest egg, it’s challenging to reach this level from scratch.
Fortunately, even if you’ve started working a job, this is an opportunity to devote some of your earnings to scale up your trading equity.
Now, needless to say, you can only do this once you’ve been profitable in the live markets for a considerable period. Therefore, if you lack confidence in this regard, it’s best to build up your account with disposable money first.
5. Be ready for sacrifice
Everyone knows that jobs eat away massively at your time, not to mention additional family, personal and romantic commitments.
Even though a long-term trading strategy lessens the burden, times may arise when you need to focus on your charts without distractions. The most successful people in any trading market have a genuine passion and interest. This is what we mean by sacrifice.
Therefore, on some occasions when you’re not working, you should dedicate time to the markets and ensure there is no neglect.
6. Time for some automation perhaps?
Lastly, there is a smart workaround when trading with full time job. Why not program your strategy into a robot? This is the one benefit of automated systems. They require little monitoring once adequately developed, meaning they won’t interfere with your work life.
Yet, there are some disadvantages to automation. Firstly, programming is a highly technical skill. It is uncommon to find excellent traders that are brilliant coders. Here, some could decide to outsource the development to someone else and advise them of their strategy in great detail.
While this plan may work, it is difficult for an external developer to create a bot that performs as well as you’d expect manually.
The other problem is some traders still prefer discretionary trading even with other demanding engagements like jobs.
It’s not necessarily that a strategy cannot be automated. Yet, these systems cannot replicate human discretion, a key component when analyzing charts. So, you might find your trading system performs better manually than automatically.
How to become a full time trader: things to consider
So far, we’ve spoken of trading with full time job. However, some people may desire to take the leap of faith by quitting and trading stocks full time, becoming full time options traders, or whatever else.
Pure full-time trading, where someone lives solely from profits they make in the markets, is an elusive goal for millions. Yet, as we said, the reality is far different.
Unfortunately, no one will pay you to trade unless you’re a professional working for a firm. Also, if your account is not substantial enough, it becomes difficult, if not impossible, to live off your trading earnings alone.
This is why there isn’t really such a thing as pure ‘trading full time’ once we understand that the number of hours you put in does not correlate with your profits.
Still, if you fancy your chances, here’s what you need to know:
Have you been profitable for at least two years?
No one can ask how to become a full time trader without having proven considerable gains over some time (ideally two years). Trading is unique from other non-traditional careers in that your ability to do it depends on whether you can already make money.
Let’s think of a musician that doesn’t consider themselves professional. Although there are many other skills they will need to learn to work full-time, the most important thing is whether they can sing, play an instrument or produce.
It wouldn’t be whether they have already made money from their skill. However, if you were seeking to do day trading full time, for instance, you should already be profitable.
The most essential aspect is time. Two years of net profits may seem long, but it’s sufficient. A trader must experience the full depth of market conditions, from good to bad periods.
If you decide to go full-time after six months but your success only came during a bull run, it will be difficult to handle a bear run or other environments. You’ve proven longevity if you are still profitable after such a long time.
Money, money, money
Remember what we said about under-capitalisation? Your equity size determines how comfortably you can be trading full time profitably. And this ties into the previous point of experience.
Once you have a net-positive track record, you can estimate your monthly and yearly returns. Then, you can do a bit of reverse engineering. For instance, if you make 10% yearly off a $10 000 balance ($1000) and your living expenses are $200 monthly ($2400 yearly), then you must rely on more than your trading profits.
You would need at least twice your account balance to meet your costs. So, the bigger this is from the get-go, the better.
The monthly withdrawal rate
When you withdraw funds from your account, it is a great feeling. However, it lowers your chances of compounding, meaning you can never grow your equity to greater heights. It’s all about scaling the income potential.
The first apparent solution is to create another way to make money so you rely less on your market performance.
Establishing a secondary income source
Trading with full time job is one way. As mentioned previously, the markets are an environment of high uncertainty. The best remedy is to see them as a secondary compensation stream.
Yet, if you prefer having trading as a primary source, it won’t hurt to mix things up by doing other stuff on the side (e.g., side hustle, part-time job, business) to balance the scales.
Lowering your living costs
Whether you’re a full time stock trader or trade full time with another market, your expenses may put you under pressure to yield profits. So, where possible, cut back, cut back, cut back. Of course, a $2 cup of coffee daily won’t make a serious dent in your pocket.
The point is to watch your spending behaviour (considering the unpredictable nature of money-making in trading) and reduce or remove unnecessary expenses.
Conclusion
Let’s sum up our trading with full time job analysis. Whether you speculate in the markets part-time or full-time, trading is not ‘easy money.’ As with any business, whether large or small, no two days are ever the same.
You should measure your success over the long term while dealing with any setbacks in the short term. Also, remember that spending more time glued to your screens will not yield more profits. It’s about quality over quantity.
Luckily, whether you are employed or not, Galileo FX already has a working automated strategy to save you time and increase your bottom line. Check it out here for more information.
