Updated: Apr 20
Many working professionals are planning to switch to full-time Trading as a career option. I get it; everyone needs stress-free money. One of the most frequently asked questions in the trading community is – 'Can I make a living through full-time trading?'
Many people think of taking full-time Trading to escape from the issues they are facing in their office. Quitting their job, work from anywhere with a laptop, no boss, and no politics looks like a dream job for many people. But the reality is different.
So, can a person make his living through full-time Trading?
The straightforward answer to this question is – YES, it is possible to make a living through full-time Trading. But it is not easy, and it demands more focus, discipline, and emotional control behavior.
I suggest improving your trading skills when you are working in a 9-to-5 job.
Because emotions and expectations from Trading are less when you are working, you can easily pass through the learning curve when you have a fixed monthly income.
Can I be a full-time Crypto Trader?
Cryptocurrency is the new buzz in the trading community. Recently Tesla Inc declared a $1.5 billion investment in Bitcoins, and Goldman Sachs decided to offer Bitcoins to its clients.
Cryptocurrency is a digital currency with no physical presence like a coin or note. Satoshi Nakamoto developed the first cryptocurrency 'Bitcoin' in 2009, and many such currencies were born in the last few years.
Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Cardano (ADA) are some of the popular cryptocurrencies.
There are many debates regarding investing in Cryptocurrency.
The world's most significant investor Warren Buffet compared Cryptocurrency to paper checks.
It raised an important question – "It's a very effective way of transmitting money, and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?"
According to him, investing in Cryptocurrency is risky and worthless.
However, the world's richest person Elon Musk takes the opposite view, and he thinks these cryptocurrencies are the future universal currency of the world.
Trading and investing in cryptocurrencies come with a specific risk. They are mentioned below:
Cryptocurrencies don't have an underlying asset as security
Cryptos are not authorized by any sovereign bodies (reserve banks or government)
Cryptocurrency is a digital currency; hence there is a risk of hacking or losing your investment if the digital wallet company goes out of business
Therefore, one can plan to invest some portion of their capital in cryptocurrencies (if required), but thinking of a full-time career in crypto trading is not a good idea as the volatility factor is high with cryptos and also because of the risk, as mentioned earlier factors.
Can I be a full-time Options Trader?
Similar to equity and futures, an option is one of the trading instruments in the stock market.
A call option (CE) is a contract that gives the trader the right to buy the shares of a security at a specified price until it expires.
A put option (PE) is a contract that gives the trader the right to sell the shares of a security at a specified price until it expires.
Many traders deploy different options trading strategies to make money in the stock market.
With Options Buying, it is possible to make quick gains when the trading decisions go right. But the success rate is less, and hence traders might go through many emotions.
With Options Selling, it is possible to make consistent returns most of the time as the time decay (theta) works in favor of option sellers. But one failure can wipe out the entire capital (only in case of naked options selling without SL or hedging). Hence, it requires careful execution of trades.
Only experts can think of options trading as a full-time career if they have a proven options trading systems and track record.
Checklist for full-time Trading
Below are the checklists one should look at before they consider Trading as a full-time career:
1) Zero Debts: If a person has a monthly commitment (EMI) towards any loan, this will add extra pressure to his Trading career as he has to generate this commitment amount every month. Sometimes, there will be no opportunities in the market. If he fails to make money in the market, extra pressure will be created in his mind, impacting his trading decisions.
2) Savings: One should save enough money to run the family for at least one year. Suppose if a person needs Rs. 1, 00,000 (or 2000 USD approx) per month to look after all the expenses in your family, he has to save Rs. 12, 00,000 (or 24,000 USD approx) before taking Trading as a full-time business. This amount is excluded from the trading capital.
3) Trading Results: Trading looks very simple when a beginner makes some quick money. However, one should realize that the market conditions are always dynamic. It requires enormous skills to make consistent money in the market. So it is better to measure our trading success before we take the extreme step.
It is a good idea to consider yourself a successful trader only when: (I) you make at least six months of your current salary from trading profits in total and (II) you earn profits for three consecutive months in Trading.
4) Trading Capital: Only the above parameters are insufficient to quit the current job and jump into Trading. One should have sufficient Trading capital to make profits in the market. Suppose a trader can earn 10% returns every month, then he needs a minimum of Rs. 10, 00,000 (or 20,000 USD approx) as your trading capital if your monthly expense is around Rs. 1, 00,000 (or 2000 USD approx).
5) Trading Discipline: One of the mo