When you ask people why they have decided to take up trading, more than 90% of them will tell you about the independence, the freedom, and the opportunity of making massive sums of money, while working from home. However, does that accurately reflect the reality of professional, full-time trading from home? The most important question is regarding the things that traders must consider when replacing their day-job with professional full-time trading from home.
Trading is viewed by many to be a high barrier-to-entry field, but that isn’t the case in the market today. However, anyone with patience and ambition can easily trade from home for a living with little capital. This sounds like an amazing opportunity. In this post, we are going to cover all the options available for people interested in trading, and how you can trade full-time from home.
The New Era of Trading
The rapid advancement of technology and the increasing volumes on exchanges have decreased the barriers-to-entry for trading careers. In most cases, there isn’t any personal capital needed, while for other cases, you will need a certain amount of capital to start and verify your commitment to trading. The markets are interlinked. It’s always open trading time somewhere around the world, with a lot of those markets easily accessible.
This means that people with full-time jobs and children at home can now easily trade full-time by finding the right opportunities and markets. This doesn’t mean that trading is an easy field, because it can be extremely difficult to stay in it for the long-term. It is imperative that you look at different trading alternatives available so that you can enter the right market. However, finding success in trading is going to be down to you and the trading strategy you use.
Before getting into trading full-time from home, it is imperative that you consider the different challenges faced by full-time traders. This is meant to provide you with a realistic view of trading full-time from home, instead of romanticizing it. That will also allow you to prepare for the challenges you will face on your journey when trading full-time from home.
Extensive Range of Trading Options Available
Most people wrongly assume that full-time traders with a high pedigree and advanced degrees only work for investment banks. A common misconception with trading is that you need a lot of time at hand and a large amount of capital to trade. That may be true if you are trading with a major institutional trading floor or an investment bank, since that is where a prominent educational background and connections set you apart from the rest.
However, the goal of this article is to provide insight to the average person, who has little trading experience, on how they can enter the trading arena and start generating wealth.
Trade full-time from home
Trading full-time from home is the easiest option for entering the trading world. It is flexible, and you can manage it with your daily life. However, day trading stocks from home is the most capital-intensive arena, since there is a minimum equity requirement for traders. A pattern day trader must have $25,000 in capital, and this amount must be maintained at all times. If the account has less than the minimum required capital, then the trader won’t be allowed to day trade. The trader is barred until they can meet the minimum equity level required by depositing securities or cash into the account.
Therefore, all potential traders should have knowledge about other markets that have lower barriers-to-entry and have fewer capital requirements. The foreign exchange (forex) or current markets provide an alternative for traders, as they can open accounts for only $100, and can easily control a large capital amount with this small sum. The market is always open 24 hours a day, 7 days a week, which provides an excellent alternative for anyone that can’t trade during regular market hours.
When you’re highly leveraged, it is imperative that you educate yourself on the risks involved in building a strong trading strategy. This should be done before entering any trading activity.
How to make full-time trading from home works for you?
A lot of traders are hesitant about trading full-time from home because they think they aren’t ready to take the step towards full-time trading. However, there is nothing to worry about. You can take things slowly, and still make trading work for you from home. Here is how you can do that:
Cut down living expenses
You can achieve financial independence by trading full-time from home in two separate ways. Make more money than you are spending, Spend less by cutting down on your living expenses.
If you’re committed to making it as a full-time trader from home but you don’t make $5,000 per month, then you should look at your living expenses. What are the areas in which you can cut back? This doesn’t mean that you stop spending money altogether and live like a monk. You just need to scale back on your living expenses, until you start making money consistently by trading full-time from home.
Add to your trading account
You can also start adding your profits to your account and grow it faster. This will mean not spending the money you have made from trading. When you withdraw money, it reduces your compound interests and kills your performance. The easiest way to increase your capital and account is by adding to your trading account, instead of withdrawing from it.
Trading as a second income stream
If you love your job and don’t see yourself working in front of a screen for the entire day, then trading full-time from home isn’t going to be a lifestyle you will enjoy. However, there is nothing wrong in treating trading from home as a secondary stream of income. A lot of people have managed to do that to improve their trading performance, until they can trade freely from home.
The Bottom Line
After you have chosen the trading method that best fits you, the next step is vital. If your main interest is in trading full-time from home, then you need to decide which markets you will trade in. This is based on your interests and available capital. You must also create a comprehensive trading strategy, which will include a business plan to help you operate as a full-time trader. Once you have that sorted, you can explore different online brokers and compare what they are offering. You can also seek advice and take help from a mentor to transform your fortunes while trading full-time from home.
Photo by Andrew Neel