A great conversation broke out in my trading group over the past few days when one member asked:
“I have a question for some of you guys….right now I’m a part time trader with a full time job. I’d love to be able to trade full time. How did you guys know when you were ready? I make a decent living doing what I do but it’s not my passion….Trading is. Any suggestions or advice?”
I thought my blog readers would find value in many of the answers along with my own thoughts about the topic:
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“You earn more from trading than from your “day job” (especially if this has been the case for more than 1 year in a row).” -Richard Weissman
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“You have enough in your account(s) so that you can still pay bills even if you have a negative performance year (preferably 2 consecutive years in a row).” – Richard Weissman
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“And if you have a wife, you better get her consent or you’ll never make it. It would be handy too if she has a job ” -Dan de Joya
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“It depends on how much time you spend in learning and studying …no quick answer.” -Mina Won
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“When your capital gains post taxes are more than your living expenses then you are ready.” -Joshua Hayes
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Trading for a living is much less stressful on your finances if you have multiple streams of income in addition to trading, book royalties, teaching, training, websites, consulting, managing money for others and even newsletters are ways to make additional money to pay bills.
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You need at least a large multiple six figure trading account that will be big enough to generate cash flow for bills based on your historical annual returns.
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Being debt free for the most part makes it much easier.
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You have to be ready to give up your current career as your identity and take on being a trader as your new identity and find meaning in it.
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A trader should have a complete grasp of risk management and the risk of ruin before attempting to trade for a living, blowing up a trading account is one thing but blowing up your lifestyle and nest egg is more than most people can bear.
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Before you decide to trade for a living you must fully understand the pressures and reality that you are facing, it is not the Poly Anna dream most think it is, it has it own stresses and uncertainty along with mental and emotional strains that could be even more difficult than most jobs. If you think a job is hard wait until you try trading full time.
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You have to embrace the uncertainty of the unknown like entrepreneurs do and be ready to mentally and emotionally manage the reality of no paycheck coming in but have the faith and confidence in yourself and your system that you know you are prepared to make it financially in the long term.
If you are a serious trader and interested in joining my facebook trading group “New Traders, Rich Traders, and Good Traders.” just send an e-mail request to my e-mail [email protected] and I will send you an invite.