During the recent COVID shutdowns, many people turned to forex trading since it presented one of the few possibilities to earn an income while the rest of the world came to a complete stop. Trading forex became a career by default.
Now that the world is more or less up and running again, how does forex trading stack up to a “real job”? Is it a viable option for those who would prefer to avoid life in the cubicle?
The short answer is, yes, it can be, but to earn the kind of money as a forex trader that you would earn in the regular 9–5 workforce, you’ll need discipline, knowledge, and a sufficient amount of capital to get you started. You can try to pass a prop firm evaluation to get access to funded trading accounts.
What You Need to Begin Trading Forex Full Time
One of the first things you need to do before you start trading forex is experience trading forex. That might seem like a catch-22, but it’s true. You have to know the forex market inside and out before you can start depending on it to pay your bills.
So how do you get experience before you begin? Luckily there are tons of resources at your disposal. The web is awash with free forex courses—blogs, vlogs, webinars, forex academies, podcasts, and more. Use any resources you can. The next step is signing up for a demo account with any major forex broker. Build up your experience trading fake money until you figure out a strategy that you can successfully execute in the real world.
And of course there’s the other catch-22 that ensnares so many would-be traders—it takes money to make money. Most forex traders make their money by taking advantage of small price swings. To make a living off of small victories, you need quite a bit of capital. That’s true even if you factor in margin, which is essentially a loan from your broker that allows you to take positions up to 50 times larger than what you have in your account.
There’s not an easy way around this requirement, but many forex brokers have no minimum initial deposit. That means you can start small—trading only money you can afford to lose—and slowly work your way up.
Who’s the Boss?
One of the most obvious differences between trading full time and holding a job is the amount of oversight you’ll receive. The typical office job—as depicted in American comedies, at least—burdens you with any number of overbearing bosses. As a forex trader, you’ll only answer to yourself. That sounds great, and, for the most part it is great, but it also means you have to self-motivate and stay dedicated.
People without a lot of trading experience think of full-time traders as risk-taking, boom-or-bust types, but the opposite is actually true.
Full-time traders are usually grinders. You need to have the discipline to sit in front of your trading platform, wait until a trade opportunity presents itself, and then execute, usually for only a modest profit.
String together enough profitable trades, and you’ll have profitable days. Put enough of those together to make profitable weeks and you have yourself a career.
If you don’t have that level of dedication and stick-to-itiveness, you probably won’t make it as a forex trader. If you do, you can truly be your own boss.
The 0 to 24-Hour Workday
Since the forex market is a global market, you can trade forex 24 hours a day, five days a week. That allows you to choose your own hours, which is very appealing to a lot of would-be traders. If you like to sleep in, go ahead and do so. If you have certain obligations at certain times, you can work around those. It’s completely up to you.
It isn’t quite that simple, however, as some trading hours present advantages over others. For example, there is far more liquidity in the forex market when you trade at certain times, usually when the hours of two major markets overlap.
You also have to pay close attention to the economic calendar. Big announcements can present big trading opportunities or big risks if you have an open position, so you have to be careful when you step away from your trading platform.
Some forex traders are overwhelmed by the fact that the market is open continuously and have a hard time taking breaks for fear they’ll miss a great trade opportunity. Others see the endless open hours and procrastinate the trading day away. The secret to turning forex trading into a career is to find the right balance for you.
Risks of Trading Forex Full Time
The biggest drawback of becoming a full-time forex trader is, of course, the risk. With most jobs, you can make a mistake here and there and still keep your job. And even if you lose your job, you would have to really mess up for them to come after the money they already paid you.
Forex offers no such security. You can have a great trading week and make one ill-advised trade on Friday afternoon that wipes away all of your gains and then some. It is the nature of the beast. There are certain measures you can take to mitigate the risks of trading forex, but you can never eliminate them entirely.
The general rule is to never trade more than you can afford to lose. That means having enough in the bank to pay your bills whether you have a good trading month or a bad trading month. If you’re dependent on your trading income to pay for your basic necessities, you’re putting a tremendous amount of pressure on yourself, which can often lead to poor decision-making in the market.
Forex trading can be a full-time job if you’re educated, experienced, and dedicated. You have to be willing to live with a certain amount of risk, and you’ll need sufficient capital to get you started and keep you going in the event of a bad week or month.
If you can meet those requirements, you can carve out a career in the most dynamic, active financial market in the world. You can work when and where you want and answer to no one but yourself. With the right knowledge and mindset, you can turn forex trading into a great career.