While it may seem like “living the dream”, day trading takes an enormous amount of focus, discipline, and hard work. For those who have experienced some trading success in the past and feel passionate about leaving their current job, here is a list of five ways to effectively transition into the role of a day trader.
1. Don’t burn bridges
Though day trading might seem like a great way to bring in a substantial income, don’t assume you can do it forever. The trading environment is extremely draining. Every situation is high pressure and your daily income rides on the whimsy of the markets. No matter how confident you are that you’ll earn significant profits, leave your previous job on the best note possible. Even if you don’t ever return, you will need references and recommendations for future positions if day trading full time doesn’t work out.
2. Take classes with experts
Enroll in a program with industry leaders who can guide you towards success. Don’t assume past earnings make you an expert. When your very livelihood depends on your day-to-day trades, you should proceed with caution. Let financial instructors help you formulate a customized trading plan so that you can learn to trade futures, stocks, options, and more in the most effective and efficient way.
3. Make a plan
Create a calendar with a daily schedule to provide you with some structure to your day. Focus is key to making successful trades. Include time in your schedule for research, catching up on the news, and drawing up a timeline for the day’s trades. A data-driven approach to trading is going to maximize your returns and prevent emotions from negatively impacting your financial decisions.
4. Make healthy choices
When it comes to your lifestyle, make sure you get enough sleep and physical activity to keep your mind sharp. There’s nothing worse than sitting down for a day of stock trading with a foggy, sleep-deprived brain. Treat your body well so you can approach work with a clear head and boost profits.
5. Manage your money wisely
As you accumulate funds, make sure you put money aside as savings. Just like you might have taken a portion of a traditional paycheck and tucked some money away, the same applies for trading income. The concept of money can become almost meaningless when you spend days virtually throwing it around, so remember to keep savings separate from your trading account. It’s the wisest way to operate.
Day trading is not a skill that can be learned overnight. While there is a fair amount of flexibility and personal accountability in the world of trading, it’s not the right fit for everyone. If you decide to leave a full time office position for the intense world of trading, take these five tips to heart.