Let’s face it: forex trading pays. But only a tiny portion of traders consider it a full-time job. Most people actually use it to supplement their income while working in conventional employment. At the same time, a good number of traders also wish to transition from part-time trading to a full-time venture.
And why wouldn’t they, considering that other successful traders have proven that this path can lead to financial freedom and massive wealth? But being a full-time trader demands much besides your precious time.
You must learn the basics of the game, and a good starting point is to take paid or free forex courses. You will learn all you need to trade successfully. Then, use the tips below to catalyze your journey to becoming an excellent full-time trader.
Tip #1: Test Your Full-time Commitment First
If you have a regular job but want to turn trading into a full-time career, the chances are high that you are considering quitting the former for the latter. And that is a splendid idea since a 9-5 can limit your ability to invest energy and time in your forex trading venture.
Considering that, you shouldn’t quit your job before testing your commitment to full-time forex trading. If possible, take a brief sabbatical leave from your regular job and use this time to determine if full-time trading suits you. Then, based on your findings, you can quit your job or keep it and let trading remain a side hustle.
Tip #2: Check Profitability Before Committing
Besides commitment, profitability is another thing to determine before becoming a full-time trader. Check your Forex trading records. If the numbers indicate you’ve been making consistent profits for a considerable amount of time, switching to full-time trading should be a good idea. After all, you’ll get more time to generate juicy returns. But, if all the signs point to more losses than profits, let forex trading be a side gig for a few more years.
You shouldn’t quit your job for trading if you’ve been taking frequent financial hits because you’ll blow all your investment and end up stranded within a short period. Remember, most traders lose all their bankroll within a year.
Tip #3: Build a Financial Safety Net
Building a financial safety net before taking the final leap and switching from your 9-5 to full-time trading is also an excellent move. Save as much money as possible since you’ll still need to cover bills and maintain your lifestyle. The best thing to do is work hard and accumulate enough funds to cover your living expenses for at least six months. That is advisable since trading is a complicated activity that may take some time before taking off.
Budget wisely after accumulating enough money to support your lifestyle and cover expenses. Moreover, don’t risk anything above 3% of your total funds on one trade. And no matter how good or bad the going gets, don’t get too greedy or lose discipline. If you invest significant portions of your funds and things go south, you will lose your investment and fall into financial ruin a few days or months after transitioning to full-time trading.
Tip #4: Start Small and Increase Your Investment with Time
Admittedly, risking higher amounts on each forex trade has potential benefits. For starters, this move puts you in a better position to bag higher returns. That is because, in forex markets, your investments determine your returns.
However, consider investing smaller amounts in the earlier stages of your transition to full-time trading. Like other liquid markets, forex is volatile. If you’re not careful, you can lose your investment in one swoop and cripple your full-time trading career before it gets a chance to flourish. Starting small will help you minimize your risk exposure and allow you ample opportunity to make mistakes and learn from them.
Tip #5: Diversify Your Investment Portfolio
To enjoy uncapped success as a full-time trader, you must boost your portfolio’s long-term performance, minimize losses, and maximize returns. That includes diversifying your portfolio. In forex markets, diversification refers to investing in multiple currency pairs. For instance, buying GBP/JPY can sell AUD/CAD and short EUR/USD simultaneously.
As a full-time trader, you should avoid investing in one asset class because unexpected circumstances may turn the tide against you, causing significant losses. And for the best outcomes, consider various factors while diversifying your investment portfolio. First, prioritize including a mix of popular, exotic, and minor currency pairs in your portfolio. Also, diversify based on your risk tolerance and prevailing market conditions.
Tip #6: Create a Solid Trading Routine
Your success as a full-time trader depends on your routine. With a well-structured routine, you can approach trading with unwavering discipline and handle each trade systematically. Routines also enable you to manage your time wisely and spend as much time as necessary on trading without compromising other crucial facets of your life. Lastly, with a good routine in place, you can prepare psychologically for each trading session well in advance and get ready to make informed decisions.
To increase your odds of attaining unparalleled success while trading forex full-time, create and rely on a routine that covers every day of the week, including weekends. Ensure the routine you set aligns with your long-term and short-term trading goals. Additionally, tailor it to fit your preferred trading style, such as scalping, day trading, position trading, etc.
Begin Your Journey to Becoming a Full-time Forex Trader Today
Switching from part-time to full-time trading has its fair share of perks. First, it allows you to commit a more substantial amount of time to what you love doing most: forex trading. That is the key to developing formidable skills, understanding the forex market more deeply, and increasing your odds of making a tidy profit.
Remember, however, not to dive into full-time trading in a hurry if you are a newbie in the trading scene. Take your time and start trading from scratch. Use demo accounts to develop your skills, sign up for a real account, and trade part-time. Wait until you start making consistent profits before transitioning into full-time forex trading.
Good luck!