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You wake up, seep your favorite cup of coffee, turn on Bloomberg on your 32″ LCD Plasma TV, flip your Wall Street Journal and smile at your wife. Looking at the clock, it’s almost 9am. You turn on 2 of your stations and your laptop as well with two humongous 23″ LCD monitors in front of you. Double click on your MetaTrader software, out shows your balance on the account, your opened positions. It’s time to battle.
Fancy such life? I’d reckon, since you have all the time of your own and you can spend as much time as you want with your family since you’re self employed (What? That’s right, a full time trader). Many of us, including myself have always dream of such kind of life where we could do whatever we want and earn a decent sum of money just being by in front of the screen, doing what it seems a relatively easy task. But can you do it? Do you exactly have the capacity to do it? Let’s explore a few simple criteria of trading full time.
Your Capital
First off, most traders start by having a sum of money on their own; or uses other people money for a start when they’re better in what they do, they find people who are willing to let them trade for a cut of their profits in the account (Usually Managed Accounts where clients sign a Power Of Attorney to allow the trader trade their accounts and letting them take a percentage of profits on a monthly basis).
If you’re new, no one would probably allow you to trade live with their accounts. And if you do not have a good capital to pay for yourself and trade at the same time for a living, chances are you can’t survive being one.
Your Knowledge on Trading
Forex? Stocks? Options? Futures? Do you have enough knowledge to do so? If you are not knowledgeable enough in terms of your interested field of trade, you won’t be able to make a good judgment when you’re opening any positions at all. When it’s more of a gamble than more of your skill set, your account will margined out in no time.
It’s not that difficult to pick up news and knowledge off the Internet to make it on your own. For a start, if you do like and want to learn about:
- Forex, head down to Babypips
- Stocks, head down to Stocks 101
- Futures, head down to Trading Picks
- Options, head down to Chicago Boards Option Exchange
There’s a few resources which talks about every financial trading market that I’ve mentioned about and should be your regular reading spot if you are aspiring to be a trader too. Check out:
- Investopedia
- Business Week - Investing
- Bloomberg - Market Data
Google on forums that may assist you in your goal as a trader in any of the market you’re interested in. Note that each market has its own traits and choose the one that really suits your lifestyle and interests.
Your Discipline and Will to Learn
Before it becomes a habit, discipline should keep you hot on your toes. Let’s say you’ve just opened a long position on a particular counter and it went negative on you. Do you cut it off immediately, wait or let it fall further? Trading requires tremendous discipline and will to learn from mistakes. I can’t remember who told me about relating trading to driving, but its true to most traders out there.
It feels weird at first. You sometimes even had accidents, minor or major, whichever it is. You learn. Getting into the car, starting the engine, accelerate and gear shifts. It becomes natural.
I’d always remember Jody, a full-time trader friend who keeps mentioning to me on the importance of Price Action. Chances are when he started, he probably learned his mistakes of not jumping into opening a position right after a major economic indicator results has been released.
Ask him now he’s doing, he’ll be laughing and telling you how easy it is now. Willingness to learn and discipline works for any related work field, but it work wonders especially for trading. And try not to be affected by other people’s opinion too much.
Your Trading Methodology
I know I know. People keeps mentioning to me on the different systems they learn when they’re trading. You’ll have to wait for this line to cut that line before opening a trade. Also, look out for this indicator to cross that indicator. No the resistance for that hasn’t been breached, please wait for this to happen. The trend is your friend, go with the flow. Keep it simple.
The underlying trading fundamentals must be understood before heading for a full time/ even for part time as a career in trading. Know what is demand and supply, identifying the trend and just some easy trading methodology that’s easy to understand. That’s basically it.
People have always been arguing about fundamental versus technical trading. I’m sure both are equally important and both should be highly considered when opening a trading position. So find something that work for you, and stick to it. Refine the method on the way when you’re at it. You’ll bag more money along the way.
Trading Full-time Could Happen If You Have
- The Time. Very importantly, you’ll have to be at something full time to grow the passion and even the skills for it to happen. Likewise for trading.
- The Money. Money grows money yes? If you need to work for someone full-time you won’t have the time. And if you don’t have money to survive to pay bills or provide for family, simply trading full-time isn’t for you.
- The Risk Tolerance. The risk factor is that high, anything could happen. Market reacts to some weird or bad news, market makers or brokers play you out by having a spike or not answering your call to close positions. ANYTHING can happen.
- The Patience (it goes with discipline). You can just wait for hours or even days for to open some good positions, again it depends on your style of trading.
Lacking of any of the above, you can forget about trading for a living.
And Me?
I can’t meet the above requirements myself and I know I have no knack for it after months of trading on my own. To be honest, though there are improvements in my own trading and demos as well, there simply isn’t enough capital for me to do it full-time. Getting a good trader, signing a Power of Attorney with him and allowing him to trade for me would be the better option; as long as I have the basic understanding of the market, I’d be able to monitor my account and have him do all the work.
Be very careful if you’re choosing the Managed Accounts option. There are those who’re good out there at this, and there are ALOT of conman out there waiting to just risk your money by trying to open big lots to try their luck. A friend of mine who’s running a MA service had a trader who produced good trading results with someone’s account, almost margined a $10,000 real money test account in 3 months.
So much for trading full-time for a living! 
“If you need to work for someone full-time you won’t have the time.”
I disagree with this statement. I work full time and trade forex full time too. How? By trading the 4hr and daily time frames. As long as I am in a trend, I can get on with my day job. I check my positions once in the morning before i leave for work. I check them once during my dinner break and I check them again when I get home.
Only a full time day trader that sits in front of his / her computer can afford to trade on the smaller time frames as they need to be there to get out if the market whips up or down. These people as I like to say, trade the price movement within a 4hr candle, where as I trade the movement of 4 hr candles themselves, as I do not have the time to be there all day and sit in front of my computer. And besides, who would want to?
If you feel you don’t have the time, try the higher time frames instead. You will be surprised.
While it’s argumentative Max, I’ll agree that it really depends on the individual’s trading style. I respect you having such a trading methodology and to be honest, I like your trading style!
But how far apart are you setting your SL and TP in this manner? You use trailing stop too?
You’ll need to have alot of discipline to do just to check your positions with only 3 times a day, not many people can do that (pending on how big the positions are). Also, since I’m saying trading as a full time trader, what I really meant is a person just doing trading for a career. You’re a different multitasking talented person. I bet you have the passion for it that’s why it works. Correct me if I’m wrong.
I check it more often when I am at home in the evening but during the day it’s not possible.
Yes if you decide that “I am going to be a trader” you are making a mental decision and a commitment to change your life over to what you want to be. This requires an interest, a passion and an enthusiasm for what you are trying to get into.
Otherwise how do you expect to ever become an expert in what you do?
Just like any subject at school you must do some serious study and take courses to become proficient in it. Trading is no different. The more hands on experience the better.
Even when I do become a full time trader, I will still only trade the 4hr and daily time frames. You will make more money and waste less time in front of the computer that way.
The 4hr time frame creates 6 candles in a 24hr period. Would you like to sit for 12 hours at your computer to watch 3 candles form? It would be like watching paint dry, but to the person who doesn’t have the time because of day job commitments, it is a good solution to the time problem while they trade part time.
Thank you for sharing. Appreciate it for expressing your views!