Should You Quit Your Job to Trade Forex or Stocks?

Should You Quit Your Job to Trade Forex or Stocks?

Should You Quit Your Job to Trade Forex or Stocks?  

Should I quit my job for trading if I love trading? One question I am often asked is simply this - Is it possible to trade currency and hold down a full-time job at the same time? My answer is always the same - it depends! There are a whole variety of factors that have to be considered before you can answer such a question with a simple yes or no. Let me explain.

Should I quit my job and become a fulltime day trader at home? For those of us in India, it is probably much harder to achieve than for those in the US, UK  - the reason is very simple, but ironically it is one of the great myths that is often sold by brokerages and ‘experts’ selling courses, that you can trade currency 24 hours a day, 7 days a week. Firstly this is not true. The markets are closed at the weekends like most other markets, closing late Friday evening and opening again on Sunday evening ( times vary according to which brokerage you use ) - these are IST times. Secondly, the major market movements occur when the largest markets are open, so nothing much happens until Europe opens, followed by the US market later in the day. For those of us in India(Delhi, Mumbai, or Kolkata), this means that the major trading hours are from 1 pm in the afternoon until 9:30 pm in the evening. As I am writing this, all the prices on the screens, irrespective of which currency pair, have virtually stopped moving as trading moves from Europe and the US, into Asia and the Far East.

These markets are small in comparison, and quite how the Far East traders manage to make any money trading their own timeframe is beyond me. If you don’t believe me, just try sitting up through the night and watch the prices hour after hour ( as I have done many times ) - the movements are tiny in comparison. On odd occasions, there will be an announcement of a rate rise or fall which will cause some movement, but these are few and far between. So for us, the only real possibility is to be in front of our screens during ‘normal working hours’ when the major price movements occur. Or is it?

It depends on the type of trader you are - if you follow this blog regularly, you will know that I am a long term trader. I do not sit in front of my screen minute by minute watching the prices move around. Apart from anything else I find this quite boring, and not very productive. My style is to place trades based on the longer-term picture - have a look at some of my posts and you will see what I mean. So do I leave my screens and trades during the day - absolutely !! - all the time. Some of my trades run for weeks, months, and in some cases years. I could quite happily go to work and earn a living if I chose to, and with a browser-based account such as Icmarkets, I could always log on at work to open or close positions ( I’m sure many people do, although I do not recommend if from an ethical or moral point of view )

The scalpers among you will no doubt be horrified by the above comments, and I can understand your trading style and It is a perfectly valid way of trading.

When should you quit your job as a forex trader? So, to answer the question - if you are prepared to trade forex using a long term style, like mine, then I do believe it is possible to do both, quite easily, whilst you learn the ropes. I would urge anyone starting out, not to give up the day job, but to begin in this way, which in many ways is similar to stocks and shares. You would not sit all day in front of a screen watching a Lloyds share move a few pence if you were proposing to hold it for month or years, so why not do the same with currency. Provided you have a sufficiently large balance in your account and have set reasonably wide stop losses in place, then the rest is up to the market. Your stop will take you out if things go against you, so the only decision you have to make is when to close out for a profit, for which you look at your risk-reward ratio - easy!

Should You Quit Your Job to Trade Forex or Stocks? Should You Quit Your Job to Trade Forex or Stocks?  Reviewed by RD Singh on 05:27 Rating: 5

No comments:

Powered by Blogger.