This episode has a slightly different format than normal. Basically, it’s a response to an email I received from a listener…
The email is from a gentleman who is 38 years old with a full time job, his wife is currently studying and he has three children. He also has the goal of transitioning from his current career into full-time trading, although he has a family that depends on his income. And that’s the part he has questions about.
Therefore, I asked Alex (@TAGRtrades) if he would be willing to join me on this episode and share his thoughts on the matter. Alex is a full-time day trader who has developed skills for trading long momentum in US stocks. He has also previously appeared in episodes 119 and 157.
Click image to view full size.
Episode Summary:
Starting and becoming profitable.
- Build good bases and procedures to protect yourself from big blowouts, i.e. daily stop loss.
- Trading a demo account is good for learning your platform, although trading a live account is better practice and experience.
- While books (etc.) can be helpful, you will learn more from being in the market and “feeling” the trades.
- Trial and error, experiment: Take lots of trades—with very small size and predetermined risk—and watch the results.
- As you collect more data, identify trades that improve/deteriorate your results.
Swing trading with a full time job.
- Swing Trading can be a practical and sustainable approach to take while still working full-time—and it will allow you to better deal with losses.
- Make swing trading your “side hustle” and use it to build confidence before making the jump to full-time trading.
- Having a safety net of savings in the bank is very important before the switch.
- Are you still an intraday trader? The cryptocurrency market could be a good learning ground: easy access, low capital requirements, volatile, 24/7 market.
Swing trading skills for growth.
- Learn basic methods of technical analysis ie support and resistance. Use it as a tool to manage risk and make better entries/exits.
- Develop skills through repetition—see patterns played over and over again.
- Don’t try to create a huge book of settings right away or shoot your bullets all over the place. Start with one thing, be consistent and then expand.
Realistic timeline for full-time trading.
- Giving yourself 6-12 months to transition is a short runway and somewhat naive.
- You should feel comfortable and confident before making the change. If you are not these things, your trading will probably reflect that.
- It is not impossible to trade full time, but very difficult…
Training and coaching.
- The difference between paying for a service and a true mentoring relationship.
- An alternative to looking for a mentor: get some friends who are in business, catch up often, exchange ideas, develop together.
- If negotiation supports, a mentor may be more accessible, as the company has a vested interest in improving your outcome.
Proprietary trade.
- The two types of trading companies and the difference between them.
- Don’t be afraid to call or email a company to show interest and initiative—find out what kind of skills they’re looking for.
- Do your research, as the culture between companies can vary greatly—some are very growth-focused, some will leave you to your own devices.
