Do you have a mind for money? Do numbers just make sense to you? If so, you might be good at trading. But should you trade as a hobby on the side or quit your job and make a career out of it? Before you decide, ask yourself these 4 questions. They’ll help you figure out the best path for you.
Do You Have a Backup Plan for Money?
Trading comes with the possibility of making a good sum of money, depending on how much you invest. However, it also, of course, comes with risks. Sometimes the markets just don’t perform how you expect them to. Even the most skilled and experienced traders experience losses from time to time. If trading is your career and sole source of income, money may get tight if you take a big loss and have no savings. However, if you just trade a little as a hobby, you’ll still have your salary to take care of that plus everyday expenses.
How Much Experience Do You Have?
If you’ve never traded a stock before, you probably shouldn’t jump right in full-time. Take some time to get to know the world of trading before you decide if you want to make a career out of it. Start by taking some online courses like those from Certus Trading or Warrior Trading. These not only teach you the basics of trading but can also help you figure out your trading style. You should also search for a mentor if you’re serious about trading. They’ll support you as well as show you the ropes.
Are You Willing to Take a Pay Cut?
Once again, a career in trading can set you up financially if you do it right. However, it may take you awhile to get into the groove. As you learn, you may not make as much money as you expect, especially if you aren’t investing much. If your regular job comes with a high salary, consider if you are OK with a slightly more frugal lifestyle until you hit your stride as a trader.
What is Your Ideal Work Day?
Do you love the structure and predictable hours of a regular office job? Then maybe trading should be more of a hobby for you. However, if you dream of setting your own hours and working from home, trading could be a good career option.
Different types of trading offer different work styles, too. For instance, day trading requires closer monitoring of markets, so you could easily work at that the same amount of hours (or more) as you did at your desk job. For swing trading, though, you only need to do a quick check at the end of the business day to make decisions. Day trading is probably best if you want to make trading your full-time job, while swing trading is great for hobbyists, retirees, or busy parents.
The key when deciding whether to make trading your hobby or career is time. Take your time studying the markets, developing your trading style, and learning as much as you can. A career change isn’t something to decide on a whim, so ask yourself these questions to aid in your well-thought-out decision process.