Investors who pursue trading as a part-time business end up spending more time on it due to the complexities involved in stock market investments. Learning to trade in equities, F&O, and other market segments, keeping continuous track of Indian and international stock indices, reallocation of assets, and portfolio management are time-intensive tasks. Therefore, many investors are shifting their focus entirely on trading nowadays.
It is not easy to become a full-time trader as you need to cope up with the uncertainties and still manage to earn a regular income to manage your expenses. In this article, we will look at some ways to become a professional full-time trader!
Questions to ask yourself before becoming a full-time trader
Stock market trading presents you the opportunity of earning a massive income without working under anyone. It also provides the flexibility that you need to balance your professional and personal life. However, there are some challenges that you have to tackle to become a successful full-time trader. The most basic challenge is to find the best demat account provider as there are numerous brokerage houses, banks, and other financial firms that offer this service. Apart from choosing the right broker, here are a few questions that you can ask yourself:
Can you take risks?
As a full-time trader, your life can be full of ups and downs as the market tends to fluctuate consistently. You should be ready to handle the losses and your patience level must be high enough to survive the period where you are not making any money. Ask yourself whether you are a pure risk taker or not. If you are not a pure risk taker, you can learn risk management skills and increase your awareness of market uncertainties.
Do you have any trading experience?
If you are a beginner, you might have started trading in a bull or bear market. Therefore, you certainly don’t have the experience of a complete market cycle. Sometimes, the market witnesses a high or low period for years.
Before becoming a full-time trader, you must have enough trading experience. You should witness multiple bullish and bearish trends to gain experience in handling diverse market scenarios and conditions.
As a beginner, you need to open a Demat account and gain some trading experience before investing huge capital. Many brokers also provide a free demat account opening procedure for newcomers. However, you must also check the brokerage, services, and other Demat charges before opening a Demat account.
What motivates you to trade?
Ask yourself this question before making the decision of becoming a full-time trader. If you are into trading purely for making money, you can make decisions in a haste and end up suffering heavy losses. If the process of tracking daily charts, following global and national social, economical, and political news, researching the right entry points for particular stocks, and other trading activities motivate you, your decision to become a full-time trader might be correct!
Do you have enough capital to earn huge profits from trading?
Being a full-time trader with minimum capital is not the ideal scenario. It is so because only a huge capital will help you generate bigger profits. Therefore, you can start as a part-time trader and treat it as a full-time business only when your trading account has become massive. Also, it is recommended that you keep some money aside as a contingency fund that can help you survive the period when you are not making any profits via stock trading.
Are you going to use your trading profits to manage your monthly expenses?
To benefit from the power of compounding, you need to keep your capital invested in the market for a long period. However, if you keep withdrawing your profits every month, the possibility of future growth is minimal. In such a case, you can maintain your long-term and short-term investment portfolios separately. The long-term portfolio should contain the investments that you are planning to grow for your life after retirement. The short-term portfolio can contain short-term investments that you can liquidate to manage your regular income needs.
Read also: The Future Of Online Trading In The Stock Market
