If there’s one thing we know about traders, it’s that they’re no strangers to risk. However, some traders aren’t ready to go all in when they start. They may aim to mitigate the risk of losing too much money by maintaining a steady income with a full-time job.
Maybe you have a passion for your full-time career, trading, or both, and don’t want to give up either; maybe you’re just looking for a side hustle for some extra income. Balancing a full-time job with trading can be challenging, but depending on your lifestyle, it’s not impossible. If you’re wondering if you can manage both or it’s time to quit your day job, consider these factors.
For most people, trading during regular market hours overlaps with their day jobs. However, if you have some flexibility with your work hours, you may be able to make productive trades within a short period rather than trading all day. For example, if you only have time to set aside an hour, focus on 9:00 to 10:00 a.m. EST. That way, you have enough time to prepare for your trades before the market opens. The first 30 minutes are usually the most volatile period in the day, which means there is plenty of potential for profit.
Another factor to consider is how accommodating your employer is. If you have flexibility with your full-time job to check in throughout the day, several trading platforms have scanners and charting services that can set price alerts. You can minimize your time monitoring the market by receiving the email or text message when the stock is near your entry point. Furthermore, you may ask your employer if you can work earlier or later than normal office hours to trade during peak hours.
Even part-time traders have a strategy. If you casually check in to trade whenever you have a free moment, you may be constantly changing your approach instead of following an organized plan. This may mean the trades in your trading journal will look inconsistent and you won’t be able to effectively analyze your data.
Instead, organize your plan the night before you trade and identify any potential positions. In the morning, budget time for a pre-market review. Set aside time to review major news announcements, earnings reports, and index charts.
In addition to your daily or weekly plans, don’t forget your long-term goals with trading. Are you balancing your day job with trading because you’re looking to make a certain amount of money? If so, at what point will you reach your goal? In another scenario, you may be using this as a potential transition to full-time trading. If you feel close to burnout, remember your long-term goal; juggling both trading and another job may be draining, but it’s only temporary.
Not everyone is lucky enough to trade during typical office hours. Some traders are able to fit their schedule around the market hours; for example, a trader in California may catch the prime trading period in New York before starting the day job because of the time zone difference. Other traders may need to find alternatives to trading during regular market hours.
Pre-market and after hours trading still offer opportunities for aspiring traders. Still, with higher volatility and less liquidity, you may want to adapt your strategy, such as implementing more limit orders. Another strategy is to consider the foreign exchange (forex) market, trading currencies with bigger picture ideas such as “dollar strength” instead of the faster trade reactions to specific news events.
Swing trading may be a better fit for traders with limited time during the day. Swing traders hold their trades for days or weeks, taking advantage of market “swings” while relying on technical analysis. Because the trading period isn’t as instantaneous, swing trading may be easier for time management. You can analyze your charts and trade during free time before and after work or during the weekend.
Swing trading requires much less time and can even maximize short-term profit potential. Even though it differs from day trading, many of the skills between the two practices are transferable.
As with any commitment, fitting profitable trading in with your full-time job is only as effective as you make it. This means prioritizing what’s important for you to accomplish during the day and understanding what it takes to make time for it. For some, it could be as simple as waking up earlier and cutting back on time wasters, such as unnecessary screen time before bed.
Yet others may realize their schedule is more complicated. Trading in your free time means spending energy and staying focused on top of the eight hours of work (plus the commute) at another job. This could interfere with other important ways to spend your day, like family time or finding time to relax.
So, can you trade with a full-time job? That depends on what works best for your lifestyle. Be honest with yourself; you may reach some of your goals with a little determination, or you may realize they aren’t worth the sacrifices.
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