At least 52% of US households have some level of investment in the stock market, while only 14% are directly invested in individual stocks, Pew Research reports. If trading is your hobby, you may be thinking about how to turn it into a full-time career. It’s important to plan carefully and make sure you’re properly prepared to make the move as smooth and successful as possible.
Refine your trading strategy
You won’t be able to become a full-time trader successfully without changing the way you trade. It’s vital to practice and refine your strategy as much possible before switching to trading as a career. You don’t want to quit your day job only to find out your strategy isn’t paying off. You may also want to expand your horizons and try a new strategy that generates a decent return. For example, covered calls is an investment strategy that produces income without added market risk. It works well in neutral to bullish markets that expect a gradual increase in the market price of the underlying stock.
Learn how to manage risk
Knowing how to manage risk is a key skill for successful traders. You need to be able to know when to close a trade and when to stop. This means learning to rely on logic rather than emotion, which doesn’t always come naturally for traders. Also, be careful not to start overtrading, which, although tempting, can easily result in significant loss and burnout. Ultimately, you need to always assess your risks, learn when to take breaks, and embrace the losses you do incur. Losses should be viewed as opportunities for learning. Instead of getting upset, analyze your performance, and determine better steps to take next time.
Get real experience
If you’ve been using a demo trading account to practice trading, don’t immediately jump into trading as your sole means of income. Although demo accounts are an excellent way to get a taste for the trading world, they’re not the same as volatile real-time trading environments. Consider first transitioning to a broker to gain real-world trading experience, and learn how to create a successful trading strategy.
With proper preparation, trading can be a lucrative full-time career. By refining your trading strategy, managing risk, and getting real experience, you’ll be ready to become a full-time trader.