The Decision to Go Full-Time
I have had many times in my trading journey where I quit my job to go full-time on day trading, only to end up back working a job again. So that is why in this article today, I'm going to show you guys when you should transition to become a full-time day trader and also the harsh reality of being one.
Now, as someone who has been trading for almost five years and has withdrawn multiple six figures from the market, here are my top two things you should not do before you make this decision to go from a part-time day trader to a full-time day trader.
The Importance of Trading Data
Number one, do not make this decision based on a couple of weeks or maybe one month of trading data. Just because you had a good month does not mean that you should go full-time in trading. You need at least six months of trading data to back it up and demonstrate that you are able to stay profitable over an extended period of time.
A lot of people make the mistake of getting profitable or making a good amount of money in a couple of weeks when market conditions are great. Every trade hits their take profit, and they become confident.
However, they soon realize that there are different seasons in trading. Not every month is the same. Some months have favorable trading conditions, while others are marked by choppy price action and consolidation.
So, if they had a good month of trading and decided to go full-time, but the next month sees choppy price action, they often end up making poor trading decisions because they rely on trading as their sole source of income. They need trading profits to sustain their livelihood, so they take trades in unfavorable conditions. That's why I strongly recommend having at least six months of data to prove that you can stay profitable in all types of market conditions, not just during trending periods but also when the daily bias might not be clear.
This is the number one mistake you should avoid. Based on my experience, I once quit my job just because I had a good month with a substantial payout. However, the next month brought unfavorable market conditions, and I went on a losing streak. I ended up blowing my account and had to return to work again. This unfortunate scenario has happened to many of my friends as well. They experience a profitable week, think they've made quick thousands of dollars compared to their regular jobs, and decide to quit, only to blow their accounts and return to the workforce. So, do not make this mistake, guys.
Now, the second thing is, you should not make this decision until you have at least six months' worth of expenses saved up. And here's the reason why: the worst thing you can possibly be is a full-time broke day trader.
Let me give you an example. As a full-time day trader, we have a lot of time on our hands. If we rely solely on trading to pay for our expenses, one thing that happens is we end up forcing bad trades. We get into trades when the market conditions are not favorable because we need that trading money to cover our expenses. Impatience creeps in due to financial pressure, and forcing trades is one of the worst things you can do in trading.
Another detrimental aspect of relying on trading outcomes for our livelihood is that it messes up our psychology. Here's an example from my experience. I remember when I was a full-time broke day trader, I would be up during the London Session around 4 or 5 am, in a trade, and praying for that trade to hit my take profit because I needed that money so badly. When you're overly invested in a trade, it can severely disrupt your trading psychology. Just seeing negativity in your MT4 or MT5 account can trigger fear and emotions, leading to impulsive and poor decisions.
That's why I highly recommend, guys, that you need to have at least six months' worth of expenses saved up. The first requirement is having six months' worth of data to prove that you can be profitable in all types of market conditions, and the second is having a financial cushion to avoid becoming a full-time broke day trader.
The Transition Phase
Now, for those wondering when I made my final transition to become a full-time day trader for life, it was when I had multiple funded accounts and cash in my bank. The reason is simple: I wanted to position myself so that even if I experienced a five-loss streak, I would be perfectly fine. This relates back to what I mentioned earlier: if you rely on the outcome of a trade, your emotions and trading psychology can become severely affected.
For me, I don't care if I have a five-loss streak because I can handle it. So, my advice is this: if you aspire to be a full-time day trader, put yourself in a financial position where you don't need to make any profits for the next six months, and you'll be perfectly fine.
That, for me, is the best position to transition into full-time day trading. For others, it might be having a substantial amount of cash in the bank, even if they only have one small funded account, and that's perfectly fine too. What truly matters is that you don't need to rely on the immediate outcome of your trades for the next six months. This financial stability is the ideal position to place yourself in to become a full-time day trader.
A Day in the Life of a Full-Time Trader
So, once you do make that transition to become a full-time day trader, once you have that six months of data backing it up to prove your profitability, once you do have at least six months' worth of expenses saved up or a solid safety net so you don't rely on the outcome of a single trade for the next six months, that's when the fun part ends because, let me tell you, trading full-time can be quite boring.
I primarily trade during the London session and the New York session, with a focus on the latter. After the New York session concludes, there's not much left to do. When I first started as a full-time day trader, I would trade the New York session and then spend the rest of my day in a cafe, reading trading psychology books, such as "Trading in the Zone."
I would diligently take notes throughout the day and then head to the gym. It became a consistent, somewhat monotonous routine day after day. However, after following this schedule for a few months, I started to get bored.
As a result, I began sharing my profits on Twitter, which led to a multitude of people asking me how I achieved consistent profitability. This prompted me to transition into becoming a content creator, where I shared my insights with others. Nowadays, I spend most of my time creating content, networking with fellow traders, and continually working on improving my trading psychology.
Teaching others about trading and trading psychology has also had a significant impact on my own trading. I've witnessed a substantial improvement in my own skills as a result. This is how I typically spend my time as a full-time day trader. I trade during the morning London and New York sessions, and in the afternoon, I focus on content creation, networking, and engaging with other traders.
I participate in podcasts and Twitter Live sessions, and in the evening, I devote my time to the gym, whether it's training for a marathon or an Ironman. This is how I currently structure my days as a full-time day trader.
That's how I'll conclude this article. I hope you've found some value in it, and I appreciate all of you who have taken the time to read it.