Aaaah, trading full time! I think this must be every traders dream. The results from our survey show that almost half of the respondents are realizing the dream of trading for a living. The other half of the folks surveyed trade part time with a small percentage still in the paper trading stage.
Why Part Time?
While trading full time is the ambition of almost every trader, trading part time does have its advantages. The biggest advantage of trading part time vs. full time is the lack of pressure to trade. The urge to overtrade can be more substantial when you are earning a living from your trading. We have outlined the dangers of overtrading and how it can be one of the chief factors that bring traders to ruin. Of course, in order to trade full time and avoid the temptation of overtrading, or chasing the markets, it is important to make sure you are adequately funded. Many brokers will tell you that in order to trade full time you should have enough money to pay your living expenses for at least six months. Anything less than this could lead you to see things in the charts that might not really be there thereby leading you to overtrade.
The Full Time Difference
Full time trading also requires a proven system. Many part time traders are at the point of refining their system to the point of making consistent profits in the hopes of trading full time soon. However, as experienced traders all know, it is not the system, but rather the skill of money management, that is the most important quality in determining long term trading success. Good money management comes from the ability to execute your orders as planned without the emotions of fear or greed clouding your judgement. Good money management allows you to allocate an appropriate amount of your account to each trade, never risking too much money for too little profit. Most importantly good money management enables you to exit a bad position quickly, without regret and without losing too much money.
These are just a few of the skills that are necessary for the full time trader to be successful. While part time traders might be chomping at the bit to trade full time, it is important not to rush the transition into full time trading, and to be aware of the added stresses and skills that will be needed to successfully trade for a living.
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