When people (me included) get into trading they often have the idea that they will be able to give up work in no time and make money whilst sitting on a beach or from a cafe. This in reality is far from the truth. Some people do day trade the markets for a living, scalping 15 pips here, 10 pips there. Some of them make good money, but these people have often been trading for many years in order to become extremely confident and consistent at what they do.
I’ve heard the saying, “you wouldn’t start up a business tomorrow as a dentist and expect to fix people’s teeth” quite a lot lately. This is a cracking point. Again, me included, when starting out it is very easy to think you can replace your salary in no time by trading the markets when in reality it is one of the hardest professions to master. There is so much to consider including price action, strategies, entry points, exit points, risk management, money management and behavioural psychology. It takes time to build up this knowledge and experience and it cannot be mastered in a few weeks.
Another issue is that in order to replace your monthly salary you would need a huge starting account. If you were sticking to careful money management rules of 0.5% to 1% per month a very large account would be needed.
How to trade around your work
The answer then is to trade alongside your current work or business. But how is this possible without having to log into your account every 5 minutes on your phone to check for trade setups. Well I would suggest staying away from the smaller time frames and sticking to the 8 hour, daily and weekly charts. This way you can look at the charts of an evening, or even every few days to identify trades to take, when to move stops and when to exit positions.
Backtesting is relatively easy as data for end of day/week pricing is more readily available and you can take advantage of some of the big price movements that occur over the medium to longer term.
Finally it allows trading to become more systematic with the use of limit orders and stop orders and reduces the risk of our emotions interfering. This gives you confidence to trust your strategy rather than having to check the movement of the markets throughout your working day.
The downside to this of course is that people miss what excited them about trading in the first place. The buzz and the thrill. But most traders quickly realise that in order to become successful, the buzz and excitement is not what will make you a profitable trader. Quite often the less emotion involved the better.
Back to the beach
Finally if you spend time to build your career/business which brings in a salary, alongside compounding the profits you generate from trading, soon you will be well on your way to spending a lot more time on the beach.