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What to choose: full-time or part-time trading in 2023?

What to choose: full-time or part-time trading in 2023?

2023-01-07 • Updated

Information is not investment advice

If you consider trading full-time, you must be prepared for many challenges. Many traders cannot deal with the psychological pressure and set themselves up for failure.  As with any freelance or entrepreneurship, self-awareness is key to successful trading. Not every person is prepared to work independently for himself. In this article, FBS shares both advantages and disadvantages of full-time and part-time trading.

Should I become a full-time or a part-time trader?

Becoming a full-time trader might be tricky if you don't have a plan. Before quitting your job and diving deeper into the world of points and strategies, analyze your current approach to trading and check your trading performance. FBS recommends paying particular attention to your profit, drawdown, and recovery factors. Are you good enough to have a stable profit factor between 1.75 and 4? Can you keep your drawdown metrics at a low level? If you answer "yes" to these questions, you can handle the instability of a full-time trading approach.

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The way of dealing with stressful situations and rationalizing decisions is also essential for a full-time trader. Unfortunate events and losses should not break you, and you must stick to the plan no matter what.

Finally, a full-time trader must have a sufficient financial cushion in case they encounter unexpected losses. If you think about how to become a full-time trader, this is one of the most crucial points.

On contrary, if you feel like you need more money to exit your nine-to-five job or you are uncomfortable with losing a stable source of income, you can consider part-time trading. This way of combining your life and trading is also a challenging one. However, if a part-time trader learns how to balance his daily activities, it will bring him decent results.

What are full-time and part-time trading?

First, let’s define full-time and part-time trading.

Full-time trading is an attitude towards trading as a primary source of income. Similarly to freelancing, a full-time trader doesn't stick to strict working hours and tasks. At the same time, they need to be systematic to have a stable source of income that will cover their expenses.

Part-time trading is when a trader combines a full-time job with trading, supplementing their income. To succeed in this combo, a part-time day trader must build an effective plan and follow it.

What are the main advantages and disadvantages of both trading approaches? Let’s find out.

Full-time trading: advantages and disadvantages

Full-time trading has many benefits and drawbacks.

Pros

Independence. A full-time trader doesn’t have to wake up early, prepare the report for their boss and do tasks that don’t satisfy them. They can plan their trading schedule based on their needs and habits. Don't feel like a trader today? With full-time trading, you can easily take a break. However, beware of too many unplanned day-offs, as you will likely lose your grip.

There is also an alternative case when you decide to make trading your career. You can shape an ideal career path by joining big companies and mastering your skills.

Your work = your passion. Imagine you dedicate all your time to the activity that you like. Moreover, it brings you money. Isn't it a dream life?

A chance to become the best. With trading as your full-time job, you can practice a lot on your skills and train hard to be a good analyst and trader. After that, you can become a mentor and even create your trading community.

Cons

Responsibility. Being a trader requires your full responsibility for everything that happens. It would help if you took control of your mind and your actions.

Time management. Trading requires a lot of time for studying and research. Once you open a position, you will carry your work with you for the whole day, week, or even month.

Your revenue depends only on yourself. You can relax for some time at your regular job as you know you will receive a certain amount of money at the end of the month. But when trading is your full-time freelance, you need to be concentrated and always be up to date.

 Limit of social contacts. This is true; trading is a lonely business unless you work for a company or have some "trading mates."

You don't make an impact on others. If you work for yourself all day long, it does not affect anyone or anything except your pocket.

Part-time trading: advantages and disadvantages

Now, let's observe the pluses and minuses of trading part-time.

Pros

You don’t have to quit your full-time job. If you have a stable source of income, there is no need to turn it away. You can combine your full-time job with trading and get additional revenue.

You can start with a small investment capital. You don't need to make a living from trading when you do it part-time. As a result, you can practice more and work hard on your trading skills.

An opportunity to save more money for a brighter future. If you don't have a big salary to put more money in your deposit account, trading part-time may help you earn enough and move you closer to financial stability and freedom.

Cons

Time management. While full-time trading requires a strict schedule for long-lasting results, part-time trading necessitates a decent work/life balance. If traders don't have it, they will face difficulties combining a 9-to-5 job and trading.

Lack of focus. If you trade with a full-time job, you will have less time to analyze assets and manage trades.

Limited time for trading. Trading with a full-time job limits the number of options, as some assets get volatile only during specific trading sessions.

A limited number of instruments for trading. Trading part-time is more effective if you focus on less than three instruments.

Strategies for part-time trade

What part-time trading strategies can traders adopt?

Swing trading strategies. The main point of swing trading strategies is to hold trades for two or more days. You can find an example of such a strategy with moving averages and MACD on the FBS website.

Long-term trend trading strategies. If you want to trade part-time, look at the stable long-term trends. Focus on the assets that move within these trends and stick to them. Beware of potential reversal signs and exit the trade if the initial signals appear.

Trading with alerts. MetaTrader 4/5 enables traders to set alerts. A trader can easily do that by creating a new alert after clicking the alert bar in the Toolbox window of MetaTrader. Here, they can choose the type of price: bid or ask, the volume, the time, and the value. This way, a trader can stay tuned for any changes on the chart.

Automated trading. Traders can utilize trading robots to maximize their results. The users of MetaTrader can use the power of expert advisors – trading robots, which open trades based on a pre-defined algorithm or a trading strategy. This way, a trader saves a lot of resources. However, they must still check the robot's performance amid changing market conditions.

Difference between a full-time trading career and a part-time trading career

After reading the advantages and disadvantages of full-time and part-time trading, you may still need clarification about the best option.

Full-time trading is suitable for those who want to dedicate all their time to trading. They are fearless of being freelancers and can create a fixed schedule. They are also ready for ups and downs and have an emergency fund to help them live through unfortunate days.

Part-time traders are more flexible and can combine different activities without losing their interest or passion. They can effectively do the tasks for regular jobs and monitor the charts after work or during lunch. They genuinely love trading and don't feel exhausted after their obligations during full-time jobs.

Bottom line

Both part-time and full-time trading require a particular approach to the trader's lifestyle. While full-time trading may sound like a dream for many fellow traders, this is a hard-working activity that demands a significant commitment to trading and a well-organized schedule. Part-time trading, on contrary, is less time-consuming but relies on your planning skills.

Frequently asked questions

Can you day trade part-time?

Yes, it is possible to day trade on a part-time basis. Day trading involves buying and selling financial instruments, such as stocks, within the same day. This can be challenging and time-consuming, but it is possible to do it part-time if the individual can dedicate a few hours each day to trading. However, it is crucial to remember that day trading can be risky. It is vital to thoroughly educate oneself about the markets and strategies before attempting to day trade part-time.

How much do part-time day traders make?

It is difficult to say precisely how much part-time day traders make. This can vary depending on several factors, such as the individual's experience level, the markets they trade, and the amount of time and effort they put into their trading. Some part-time day traders may only make a small amount of extra income from their trading, while others may be able to generate a significant amount of income. Ultimately, the amount of money a part-time day trader makes will depend on their ability to generate profits through their trading activities consistently.

Part-time vs. full-time?

Whether an individual pursues a part-time or full-time trading career depends on several factors, such as their circumstances, financial goals, and experience level. A part-time trading career may be a good option for someone interested in trading but unable to commit to a full-time trading schedule due to other obligations, such as a full-time job or family responsibilities. In this case, the individual can trade less frequently, such as in the evenings or weekends.

On the other hand, a full-time trading career may be a good option for someone who can devote most of their time and effort to trading. This can allow the individual to fully immerse themselves in the markets and potentially generate a significant income from their trading activities.

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