Becoming a full time trader means trading stocks, currency, commodities, and other assets to make for a living. Those, who think it is nothing but a piece of cake, will be disappointed to hear this coming. According to the latest research, it usually takes one not less than 2 years to become a professional full time trader.
Besides, it is not just a decision you make. It must be also backed by additional resources, knowledge, and lifestyle. In this article, we will discuss how to become a full time trader and what challenges one can meet when choosing trading for a living as the major source of income.
Every full-time trader must have a deep level of financial and economic knowledge. Of course, it does not mean years of practical experience. On the other hand, he or she must have a clear understanding of how financial markets move, what factors influence the market, etc.
Without that knowledge base, the chances of gaining success are very low, especially in the long run. This is very important, as you will no longer have another job to back up your financial stability. In other words, you actually have no right to make a mistake. So, the more you know about the market and assets you are trading, the more successful trading strategy you can establish.
Note: becoming a full-time trader does not necessarily mean trading 24/7. A crucial distinction here is to make it a part of your lifestyle.
Before quitting a regular job, you need to be 100% sure you are ready to become a full-time trader. This is where you have to answer the following questions to support your choice:
According to Comparably, the average US-based full-time trader makes from $37,500 to $155,300 per year. So, if you want to make about $100,000 annually, it does not mean trading shifts 7 days a week. All you need is to gain not less than $2,000 of weekly profits. It is not that hard, if you are aware of the basics, market insights, and other crucial information.
Yes, you should. Every trader (either part-time or full-time) must pay taxes. It involves some reductions of any profit you can potentially make. The sum you need to pay will depend on your trading strategy. For example, long-term investors can qualify for a favourable tax treatment while day-traders cannot.
Becoming a full-time trader may sound romantic. In reality, it is hard work with many issues and things to learn and practice. It is about self-discipline, money and time management, proper planning, and lots of learning. Make sure you are 100% ready to take the challenge before quitting a regular job.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.