This is a question I am often asked by individuals as they progress in learning how to trade the e-mini contracts. To be sure, it is a question I am usually very reluctant to answer because of the far-reaching ramifications to traders of finances, money management and ends some cases, even relationships. Transitioning from a good job with steady pay and all the perks that are part of a career oriented job position and beginning a career in trading is really a question only a trader can answer.
I have several students who could easily trade profitably and are considering going to full-time trading. I work hard at making them aware of the gravity of their decision carries, and make them aware of some potential landmines, like:
• Loss of a guaranteed steady income is a prime consideration for anyone considering going full-time, especially if there is a family involved.
• The added stress of trading for leisure and trading for a living and add new dynamic to your trading and potentially your trading style.
• I find that most traders try to go into full-time trading a bit under capitalized. It is very difficult to generate a decent income trading a $5000 account.
• Full-time traders tend to trade and 5 and 10 contract lots. This level of contract sizing may be more than a casual trader is accustomed to trading and can result in some fear-based trading tendencies.
The life of a full-time trader in good times is among the most attractive lifestyles I can imagine. But trading doesn’t always go your way, and there will be periods where you, as a trader, will slip into bad habits or a string of losing trades. It seems to happen to everyone. It takes a considerable level of intestinal fortitude to forget about yesterday’s trading and focus on main on today’s trading, which should be the only matter at hand.
Trading is a little like a sports. Even the most talented athlete’s fall into periods where their talent seems to temporarily leave them. The same things can happen in trading and handling the emotional stress of a bad streak can test the willpower of the even experienced traders.
Finally, one of the least considered consequences of full-time trading is the solitary lifestyle of a full-time e-mini trader. I have been at conferences and listened to many traders mention that trading can be a very lonely profession. This is not to say that you could not add a rainbow of wonderful activities around your nontrading time, but apparently many traders choose not to do so. In short, this is one area that should be given consideration.
In summary, I have listed a number of reasons part-time traders should give transitioning to full-time trading careful consideration. There are the usual expected problems and some unexpected problems that are part and parcel of the trading business. On the other hand, if, after reading this short article, still believe that trading offers one of the best opportunities to earn a living on the planet, perhaps it’s time you went full-time; this decision is an intensely personal decision, but most people seem to know when to become full-time traders.
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