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Becoming a Full-Time Trader?

Sure, all traders enter the markets with the intention of making, not losing money. However, there is a clear distinction between the part-time trader and the professional that extends beyond the number of hours trading, because when your livelihood is dependent on the success of your trades it is even more important to be mentally prepared for the daily battle with profit and loss margins. The transition to becoming a full time trader, especially for professionals coming from the corporate world and are new to self-employment, is often a tougher road to travel than many expect. And what’s worse, it can have a very real impact on your trading profitability.

So with that in mind, we break down some of the biggest stumbling blocks preventing new home-trader pros fulfilling their profit-making potential.

Keeping Your two Home Lives Separate

The first problem many pros find difficult to overcome when they first take to full time stay at-home trading is just that, the workplace is in their own home. The invisible divide between the trader’s office and his castle is often difficult to define, or doesn’t exist at all.

Throw into the mix the fact that the ones you love might be occupying the same space that you’re trying to work in and it’s even easier to appreciate the fact that things can get a difficult working in the midst of the environment you also live the rest of your life in.

The key to long successful trading sessions at home is to create a barrier between your new office and your home, and preferably a physical one at that. Trading at your kitchen table won’t optimise your performance, make sure you have a room in your house where you only trade. Not only will this help you “get in the zone” as whenever you go in there you’ll know it will be strictly for business, but it will also detract from the number of potential distractions around you, including the occasional rigmarole of family life.

Put in the Hours

If you’re planning on turning your hand to becoming a full-time trader then be prepared to put the hours in, because if you under-estimate the workload required to be successful then you’ll never reach anything close to your full potential.

Much like any other self-employed profession, research, market analysis and application all take time and dedication. Whilst being a full time trader might not mean confining yourself to solitude for fourteen hours a day, three hundred and sixty five days a year, it is a career choice you will have to commit to. Your family will also have to accept that the increase in the amount of time you’re spending at home isn’t an increase in the time you can necessarily spend with them.

Money Management

Money management and discipline are two of the most important concepts of being a profitable trader at any time, but are even more crucial when trading is your sole source of income. To be able to become a full-time trader, a move that will completely alter your lifestyle, you have to guarantee that you’ll be able to maintain a steady stream of profits, something that you don’t necessarily need to accomplish when only trading as a supplement to another job.

The most important thing to remember is to maintain the balance between keeping a healthy trading account and taking profits. Whilst it’s always tempting to take whatever profits you make immediately it is often more prudent to reinvest gains into successive trades, as this will enable you to be more profitable in the long run. If you manage your money correctly you can both reap a substantial income from trading whilst simultaneously increasing the size and frequency of your trades, which will lead to a growth in income in the medium term.

Realistic Expectations

Similar to money management, having realistic expectations as to what to expect from your trading performance has to be a priority for the new professional trader. To determine how much monthly profit you wish to make, and then trade attempt to chase this figure will more often than not result in rushing into inadvisable, poorly researched or overambitious trades.

Again,it is important is to be in the mindset of treating trading as a business, rather than a financial hobby. If you take the attitude that you can “get rich quick”, you’ll find yourself taking large positions and exposing yourself to losses you couldn’t recover from (again, this is connected to good trading account management). Taking a more systemic approach to making profitable trades, which may result in initially banking less as a monthly salary than you were being paid before, but will result in growing your new business far more successfully in the long term.

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