How To Know You're Ready For Full-Time Forex Trading?

So you're thinking of quitting your job and trading full-time, this is every trader's dream as nothing embodies freedom more than those who trade full-time. However, this type of independence isn't for everyone, so how are you meant to know when you're ready? From personal experience and through relations with other great traders, I've been able to narrow it down to a few points.

1. You Have Enough Capital

The capital you have is probably one of the most critical factors of going full-time in this game.

You must have enough capital in your account that whereby making at least 7%/month is more than double what your full-time job is paying you. And not only this, you must have enough money in the back where you can cover at least the next year or so of standard bills such as rent, utilities, and food, without having to think about withdrawing from your forex account possibly.

You must be prepared to have the capital to continue living an everyday life and be comfortable with a few account fluctuations every now and then and being prepared in case of losing streaks or large drawdowns.

There is no set amount you should have at least to go full-time as it all depends on personal circumstances, and the lifestyle you live. However, speaking for myself as an almost 19-year old university student living away from home in England, I would desire to have at least £35,000 in my trading account so that 7%/month is at least £2500 which will grow if compounded, and at least £25,000 in the bank to spend on necessities which would last me at least the next two years or so.

This is so that, if half-way through I realise I am not pulling in the best results trading full-time, I have enough time to find a good job and start getting paid well.

2. You've made Consistent Monthly Profits for the Past 2 Years, MINIMUM

You must have data in your journal that proves that you're able to make consistent monthly profits on your trading decisions for the last two years every month. Of course, a losing month here and there is fine, but overall per month, you must be making on average around 8-10% gains on your investment.

Just by throwing your work clothes in the wardrobe and earning money in bed by trading 24/7, it does not mean you will be any better at making trading decisions than you were trading part-time.

If you know you're not quite there yet at making consistent monthly profits, then the idea of trading full-time should probably be put on hold as there chances of you doing so as a full-time trader will most likely decrease.

3. You Have Other Responsibilities that will Distract Yourself From Trading

I believe trading does not need to be "full time" where you sit at your all day and take countless trades; it all depends on the type of trader you are.

I think most people would agree that swing trading is probably the best type of trading, as it allows time to catch the next full swing in markets. For this reason, I think having a job or some responsibility is a good thing as a distraction, to keep you away from the charts whilst the trade is open.

Sitting at your desk, 24/7 could lead to over-trading, and we all know what the usual consequence of that is.

That's why if you're planning on quitting your full-time job to pursue trading full-time, you should definitely have something else to do throughout the day and that can be literally anything!

This could range from being in charge of taking and collecting the kids to and from school, cooking for the family, cleaning the house, anything! Anything that can take your mind off the chart.

4. You Have a Real Passion for Trading

You must be clear with yourself about why you're taking the leap of faith and going full-time with your trading. Do you really believe this is what you're truly good at and it's got to a point where it's making you much more than your job? Or are you just trying to make some quick cash?

You must critically and honestly assess your skills, and I'd recommend you fix any issues you have with yourself before you give in that notice.

If you rely solely on your paycheck to pay your bills, mortgage, or your family's tuition fees, then strongly consider the consequences of removing that paycheck will do for you, have you been making enough, or even double than what you get paid to be responsible for this? You definitely don't want to put your lifestyle or your family's well-being on the line.

Quitting your job and going full-time is pretty severe, and there are plenty of risks involved not just in the monetary aspect. Take your time with your decision, and make sure you're ready financially, mentally, and emotionally.