Apple | Google | Spotify | Stitcher | Soundcloud | YouTube
In this episode, you’ll discover when you should quit your job and trade full-time.
So listen to it now…
Day Trading For A Living: What You Must Know
Trading as a Business — The Essential Guide
Hey, hey, what’s up my friend?
In today’s episode, I want to talk about whether you should quit your job to trade full-time.
Before I can answer that question, there are a few things I want you to consider.
How has your trading been, looking through the past one year, the last 12 months, how many months did you make money? If let’s say over the last 12 months, you only made money on 4 months out of 12 then clearly, you’re not consistent.
You don’t want to trade full-time with that kind of track record. Because for the 8 months you’ll be wondering how you’re gonna put food on the table, how you’re going to pay your bills.
I’m not saying that you can’t be a profitable trader just by winning 4 months out of 12. You can be. Especially if during those 4 months, you’ve made a shit load of money and your losses on the remaining months are small. You can still be a profitable trader.
But coming from a full-time trading angle where you want consistency in your trading, where you need the money to pay your bills, put food on the table, you really want to be consistent. You want to be winning, making money on most months.
One thing to point out is that, let’s say now you’re trading part-time, you may not be as consistent as you want yet. But you’re thinking, “Maybe if I trade full-time, my consistency will improve, I’ll become a better trader.”
That’s the thought going in many traders head. They think that now they’re trading part-time so their results are not as good. But if they trade full time, they can put in more effort and more time to be a better trader. They’ll make more money. Well, guess what?
It doesn’t work that way. If you’re a part-time trader and you’re not getting the results you want, then when you do it full-time, it’s usually worse. Because you have more at stake now.
Don’t make that assumption thinking that going from part-time to full-time will magically improve your results. It doesn’t work that way.
2. Your trading capital
I can tell you honestly if you have a trading account that’s just $5,000 or $10,000, it’s pretty darn difficult to trade full-time and make a living.
Especially if you’re living in developed countries like Singapore, the US, or whatsoever. Maybe if you’re living in developing countries where you don’t need a lot to survive, then maybe it might work.
But for most of you watching this, a $10,000 trading account pretty much wouldn’t cut it.
Let’s say you have a $10,000 trading account and you make an average of 5% a month. There’s like $500 a month. Ask yourself honestly, are you able to survive with $500 per month? I think for most of you, you can’t even pay for your food.
So you must manage your expectations and you must have a decent size of trading capital
3. Other sources of income
If you had to trade full-time, do you have any other source of income that could supplement whatever you’re doing? Maybe you have a side business, maybe you’re giving tuition somewhere, maybe you’re driving Grab or Uber or somewhere.
Or maybe you earn some income from YouTube or whatever. I don’t know. Do you have any other sources of income? Because if there is, then the transition to full-time trading with other sources of income available makes it much easier.
But if you’re just trying to make trading your only source of income then things will be a bit harder and shakier if you ask me.
4. Opportunity costs
Let’s say now you’re in a job that pays you $50,000 a year. If you were to go and trade full-time and let’s say you make like $30,000 from trading full-time, then guess what?
You didn’t make $30,000 a year from trading. You’ve actually lost $20,000. That $20,000 is your opportunity costs because you could be working full-time elsewhere apart from trading which makes you $50,000 a year. That’s an opportunity cost of $20,000 to you.
Now, this is a question that only you can answer:
Is the “freedom” that full-time trading brings, worth more than the $20,000 opportunity costs that you’ve just lost? This is very personal. Some people value their freedom a lot more than $20,000. Again, something to consider.
5. Alternatives other than full-time trading
Is it possible that you can trade part-time and have a full-time job? Maybe a full-time job gives you that security while your part-time trading helps you to build your wealth over time to compound your trading account. That’s one approach.
Or maybe you can take trading as a business. Like me, for example, I treat trading as a business. I make my money from:
- Trading the financial markets and using it to compound my trading account
- I have YouTube that pays me money every month or YouTube advertisement and stuff like that
- I have my own trading courses that I offer
- I receive referral fees whenever people buy some books on Amazon through clicking my link or subscribe to certain trading platforms if they click on my referrals
There are many alternatives out there. So think about all these.
Whether you should quit your job to trade full-time, hopefully, those pointers make you think a bit deeper as well as providing some alternatives to you if you want to trade full-time. And if your circumstances don’t allow it, what other things can you still do?
Well, there’s a lot of things that you can do. I hope that helps and that’s it.
I wish you good luck and good trading. I’ll talk to you soon.