A common question most people have is if it is possible to quit their job to become a full time forex trader. While you can do this, it does come with its risks. You would be moving from a fixed income source to a variable income source. However, if you play your cards right, this lifestyle may not be too far from reality for you.
1) Is My Trading Profitable
If you are not making a profit from your forex trading, there is no way you can make it your primary source of income. That’s a simple statement of fact. Having a prosperous business, on the other hand, is not enough. You have to make a sufficient amount of profit. What exactly does this entail? It indicates that your monthly profits are sufficient to pay your monthly costs.
Now is the time to take a close look at your money if you haven’t done so before. Create a paper in which you list all of your monthly costs, and determine the absolute least amount of money that you require each month in order to maintain your current standard of living. That which is absolutely essential for one’s continued existence is referred to as the minimum.
That is the very minimum amount of profit you require each month from your business. You shouldn’t even entertain the idea of quitting your work if you aren’t there. You will go through your funds more quickly, and you will become a stressed-out mess as a result. Don’t do it!
In addition to this, you still need to have the ability to expand your account! Therefore, you not only need to produce a profit that is sufficient to pay your costs, but you also need to be able to increase the size of your trading account. Let’s assume things are going well for you financially.
Your revenue is far more than the bare minimum required, which means that you are able to keep your account balance rising even while you are making a profit. That is really exciting, but it still does not imply that you should immediately stop working at your job position.
2) Is This Lifestyle Good for Me
Trading foreign exchange on a full-time basis feels like something out of a fantasy. You get to decide when you work and for how long, you don’t have to answer to a supervisor, and you may stay in your pajamas all day. That is very exciting! However, full-time forex trading may be a demanding and isolating occupation. When you claim you want to trade forex full-time, do you truly want to do forex, or are you just looking for a means to escape the job you have now?
The foreign exchange market is sometimes mistakenly seen as the holy grail of investing by many individuals. It implies that they may finally work from the comfort of their own home. They are unaware that the dislike they had for trading forex is comparable to the dislike they had for working as an accountant or a secretary.
Make sure you are comfortable with the idea of becoming a forex trader before you quit your current employment. Try working part-time first before committing to a full-time job. Try it out and see how well it works out for you. Trading forex may be a rather solitary profession, as I’ve mentioned before. It’s possible that you’re finally living the dream by working from home, but it’s more probable that your buddies are still stuck in the 9-to-5 race.
Adjustment to this manner of living may be challenging for certain individuals. If you have a lot of extrovert energy, you should include some time for socializing into your schedule.
3) Do I Have a Backup Plan
Even if you have arrived at the conclusion that you want forex trading to be your full-time occupation, there is still more work for you to complete. You need to have some sort of backup plan in place before you can confidently quit your work and start living off of your winnings. You have sufficient savings to see you through a period of three months with no gains.
Start putting together this thing right away if you haven’t done it before. However, I did not mean your savings for an unexpected need. Instead, what I had in mind was a backup plan. What are your plans in the event that things does not go as planned? When you make foreign exchange trading your full-time occupation, you place a lot of strain on yourself.
Because of the additional pressure, you can end up making more risky investments or increasing the number of deals you participate in. Which in turn might lead to a decrease in the amount of money you make from your business.
4) Advantages of Full Time Forex Trading
When you trade on a part-time basis, you still have to deal with your regular job as well as the chores you do around the house, and the time you have left over is frequently not sufficient to trade Forex efficiently. This problem is solved when you trade on a full-time basis since you have the entire trading day at your disposal.
When applied over the whole intraday session, the use of pivot points and auxiliary levels of support and resistance proves to be the most successful. When trading is your full-time job, you will be able to track the trend through practically all of these price levels. Those who trade only sometimes are likely to overlook a number of the chances related with daily pivot points.
A full trading day that lasts for seven to eight hours can produce far more possibilities for entering positions than trading for two to three hours at random every day. You have the option of focusing on the lower period spans, where you will likely discover even more chances.
When significant new information on the Forex market becomes available, a trader’s response should be prompt and precise. A trader who engages in the profession full-time is in a position to respond to the vast majority of currency-related news items as soon as they are published.
5) Disadvantages of Full Time Forex Trading
Keeping a close eye on the market throughout the day is a perfect recipe for overtrading, which, in turn, is the misery of the existence of many traders. When sitting in front of forex trading all day, only traders who are emotionally resilient and have a lot of experience will be able to prevent themselves from constantly overtrading. If you trade foreign exchange on a full-time basis, the likelihood is high that you do not have any additional means of financial support.
This indicates that if you experience a string of losses, not only will you not be making money, but you also run the risk of losing the money that you first deposited. If you trade Forex on an infrequent basis and also have a full-time work, then your financial security is not overly dependent on Forex profits. If you intend to devote all of your time to trading, you need ensure that you have sufficient funds to cover your day-to-day expenses and keep the required amount of money in your account even in the event that you suffer a string of significant losses.
Final Verdict
While forex trading full time seems like a dream, it can also quickly turn into a nightmare. You need to ensure that this lifestyle is doable for you before you jump right into it. After all, anything done in a rush is always done with mistakes. Let your trading lifestyle come naturally. Don’t force yourself to become a full time trader if you’re not ready yet.
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