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How to Trade Without Quitting Your Full Time Job
Trading is a potentially highly profitable skill, but like any skill it takes time to master. Some people may think that they need to quit their job in order to be a serious trader.
The truth is, with some dedication, it is possible to become a successful trader while still working a full time job. However, there are some measures you will need to take to make the best use of your limited trading time.
The very first step for traders with a full-time job is to identify the times during which they can trade.
This will likely involve some short term sacrifice.
For those with a 9 to 5 job, it may only be possible to trade or study trading in the time before or after work. So you may have to wake up an hour or two earlier in the morning, and give up some TV time in the evening.
When you are first starting out with a small portfolio and/or limited trading experience, you will probably find that you aren’t able to make much money during this limited time.
Don’t despair. Keep studying and practicing.
As you grow and become a more effective trader, you will find that you are able to squeeze more out of those few hours, so that eventually you will be able to make more and more from your trading. This could ultimately allow you to quit your job and free up your time in the long run.
Why should you waste time planning when your trading time is limited? Shouldn’t you be spending as much precious time trading as possible?
Actually, if you trade without any planning or preparation, you will likely end up making more bad decisions and losing your money.
To make sure that you use your trading time efficiently and effectively, create a trading plan that you will follow religiously.
Choose some trading strategies to work with, and the conditions under which you will employ each strategy. Customize them around your trading preferences and schedule.
If having open positions while you are at work impacts your job performance, then you could choose a strategy that allows you to close out your trades before you clock in. If you are away at sea with no internet connection for days at a time, you may choose a higher time frame strategy where you keep your trades open for long periods and do not need to react quickly.
For traditional markets with opening/closing times, the first one or two hours when the market opens and the last hour before the market closes often offer the most volume, volatility, and potential for profit. If you are able, plan to trade during these specific times.
Make sure to journal all the trades you take. This data will help you to improve and optimize your trading plan, allowing you to slowly but steadily become a better trader.
Also ensure that you set proper stop losses for your trades and use risk management. With a full time job, if will be very hard to trade your way back to profitability if you lose all your trading capital.
For more details on constructing a trading plan and proper risk management, check out these articles:
NEST — 4 Essential Steps For Creating A Profitable Trading Plan
3 Easy Steps to Proper Risk Management for Margin Traders
https://medium.com/the-birb-nest/nest-4-essential-steps-for-creating-a-profitable-trading-plan-e16588955772
Each weekend, go through the charts and look for assets that look like they are about to meet the criteria for your trading system.
As you are scanning the charts, draw any support/resistance levels, trendlines, or other potential areas of interest that you think will be significant through the week.
If you expect to be able to steal a few minutes to place orders during work, set some alerts to remind you to check the charts and place orders manually once conditions are met. If you don’t have this luxury, you can always set your limit orders, stop losses, and take profit targets ahead of time.
For charts that catch your eye, do some fundamental research. Look for any potential catalysts that may cause the price to move during the week. This could be anything from an expected earnings call to a product release to the Fed potentially announcing that they will change interest rates. Based on how you feel the market might react to that news, you can decide to have a bullish/bearish bias that week, or avoid trading entirely.
Doing this prep work will let you trade more calmly and help you react quickly no matter what happens during the coming trading week.
There are many markets open for trading every day, and the internet lets you trade all of them. Each has their own distinct characteristics.
Stocks and stock indices are some of the most heavily traded markets, with strong trends and plenty of data from news, press conferences, company earnings reports, and more to analyze.
Forex markets are open 24 hours a day for 5 days a week, so you can trade at any time you are free during the week. There is a lot of liquidity and leverage available for forex markets.
Commodities have a low correlation to stocks and bonds, making them good choices for diversification and hedging. Commodity prices can be influenced by many factors, and are thus more volatile.
Cryptocurrencies are relatively new, but are available 24/7. Volatility is very high, meaning there is great potential for profit. Some cryptocurrencies also have low liquidity, making it harder to enter with large sizes but allowing for huge price swings.
So which market should you trade? There’s no need to restrict yourself to any one market. If a particular market is not showing a clear trend, you can easily switch to a different one where the trades are easier to spot, and come back once conditions improve. This flexibility will give you many more trading opportunities each day.
As someone with limited time, you may not have the time to stay up to date on all the news and scan all the charts in every single market.
Instead of analyzing earnings reports, reading countless news articles, and scanning charts, you can simply analyze the performance of different traders and hire or fire them whenever you wish.
However, it is important to note that relying too heavily on copy trading will not allow you to grow as a trader. While it is a very useful tool to have, it is not a replacement for studying and learning to trade on your own.
For tips on how to copy-trade successfully on Covesting, refer to these two guides:
7 Tips For Successful Hand-Free Trading With Covesting on PrimeXBT
5 More Tips For Maximizing Profits With Covesting on PrimeXBT
For traders with limited time, one of the ways you can increase your profits is by increasing your capital.
Let’s say that after some practice you are able to average 10% profit on your capital per month. 10% profit on $1000 USD is only $100, which is probably hardly enough to quit your job. However, if you kept putting the profits back into trading, that $1000 could turn into over $3000 by the end of the year.
That’s triple the starting capital purely by compounding profits. With a full time job, you could set aside a certain part of your paycheck to increase your capital and compound even more profits.
Eventually, your portfolio should grow enough that the 10% monthly profit strategy earns you enough to cover your expenses and quit your job.
Bear in mind that you won’t always have winning months. It’s very common for even the most successful traders to have losing weeks, months, and even quarters. These losing periods is where your full time job actually becomes useful, as it allows you to pay the bills without having to rely on your trades to perform. This puts much less pressure on you while trading, and gives you the breathing room you need to grow and eventually become a consistently profitable trader.
Trading is one of the best ways to leverage your capital and have it work for you. You don’t even have to quit your job to get started. With some short term sacrifices, you can start learning to trade today.
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