As forex has become much more of a mainstream industry over the last few years, more new investors are getting involved for the first time. A lot of new traders look to start trading forex as a hobby initially, alongside their full time jobs. This is fine until the profits start rolling in. When hobby forex traders start making money, they look to quit their jobs are trade full time. Let’s take a look at how to trade forex full time…
Trading forex full time is not easy or necessarily. To trade forex professionally you would need at least 1 year of expenses saved, 6 months of verified track record and a minimum of $100,000 in trading capital. Most traders can trade alongside a job without even needing to go full time. Let’s find out more…
- Going Full Time As A Forex Trader
- How Much Money Is Needed To Trade Forex Full Time?
- My Experience As A Full Time Forex Trader
- Conclusion – How Can I Trade Forex Full Time?
Going Full Time As A Forex Trader
Becoming a full time forex trader is the dream for a lot of part time traders just treating their trading as a bit of a hobby. Being able to travel the world, be your own boss and make a much higher income seems great, right? The realities of trading full time and much different to how social media likes to portray it and there is a huge amount of pros and cons that should be considered before even dreaming of trading full time…
The Pros Of Full Time Trading –
- You will never miss a trade. When trading forex full time you’re able to be at the charts as much as you would ever want. This way you can ensure you never miss an entry or scale in, on a trade you’ve been watching for hours.
- You can develop strategies. When you have more time to dedicate to trading, you can spend hours every day backtesting strategies, developing entries and risk management techniques. This could lead to more potential returns over the long term.
- You will potentially be able to scale your trading up. Having more time and resources to dedicate to trading could lead to you being able to bring your trading to the next level, in terms of returns, investors and industry exposure.
- You won’t have a boss. By trading full time, you will be working for yourself and not have to answer to a boss. You’ll be able to travel, work when you want and potentially live a much better lifestyle.
These are the main pros that draw traders into going full time in the industry. However, there are also a lot of cons that need to be considered…
The Cons Of Full Time Trading –
- You will be working many more hours. I imagined going full time would be brilliant and I would only work a few hours per day, but I ended up working more than 12 hours per day as the pressure to bring in money is drastically increased.
- It’s stressful. Being solely responsible for brining in income from the forex markets is tough mentally. There are losing months and slow months where you start trading erratically and regretting the decision to go full time.
- It’s lonely. Trading full time is very isolated as you don’t have colleagues or that buzz of an office. It’s just you and the markets, 24/7. This will get lonely after some years.
- It’s not needed. Most traders that are consistently profitable are trading on the 4H time frame, or above. This can easily be done whilst holding down a 9-5 or at the minimum a job with reduced hours.
These are some of the main drawbacks of trading full time that REALLY need to be considered before you pack in your job to pursue this as a career.
How Much Money Is Needed To Trade Forex Full Time?
The reality is that a lot of people sadly jump into full time forex trading without having enough capital to actually make this sustainable. Having a low amount of trading capital will lead to over leveraging, mismanagement and this will cause large losses. Combine these large losses with the fact that full time traders NEED to make a living out of their trades and you have a real psychological battle here.
Let’s Crunch The Numbers…
- The majority of forex traders lose money (70-90%).
- Out of the 10-30% of traders that make money, most will not make more than a normal salary.
- Consistently profitable retail traders risking 1% per trade would expect an average of 5% return per month.
With these numbers, let’s say you’re a consistently profitable forex trader with 6 months minimum of track record. If you are averaging 5% per month, on your account size right now – could you survive off that money? Baring in mind that this is an average, there are some months where you will be paying yourself nothing from trading. This is also before looking at taxes and insurances.
Most Forex Traders looking to go full time, would need:
- At least 6 months of track record on MyFxBook
- An actual NEED to go full time (continuing to work is best)
- At least 1 year of expenses in an account
- At least $100,000 in trading capital
I would say that 90% of traders that try to go full time would not have any of these.
How Can You Increase Trading Capital, To Go Full Time?
Now that we know you would need at least $100,000 to sensibly get by as a full time forex trader, we need to look at how to get this trading capital. With most traders coming into the markets with a few thousand dollars, it’s not really achievable to say that we should just compound our profits for a few months…
Forex prop firms offer funding to profitable forex traders looking to scale up their capital. Funding ranges from $10,000 to $400,000 with the most popular prop firms and you will receive a profit split for your trades. These online prop firms are zero risk as you are not trading your own capital!
Before trying to trade forex full time, I would highly recommend being funded by at least a few of the top prop firms. An ideal setup would look something like this…
- $200,000 From FTMO (70% Profit Split)
- $50,000 In Instant Funding From BluFx (50% Profit Split)
- $100,000 In Instant Funding From MyForexFunds (60% Profit Split)
Let’s say you are averaging 5% per month on your trading accounts, before you go full time. With the $350,000 in funded trading capital here, you would be averaging around $10,000 per month, pre tax. These numbers are all theoretical of course.
Having access to large levels of trading capital by utilising these companies like BluFx, instead of over leveraging your $4000 account is going to make a huge difference.
My Experience As A Full Time Forex Trader
For me to be talking about full time forex trading, I think it’s important to explain my experience as a full time forex trader…
I went full time after playing around in the markets for about 1 year. I had some money saved up at the time, about a years worth of expenses, and I figured I was going to make it work with my £5000 trading account. This was before prop firms like FTMO, so there was no real chance of getting funding – it was just me and the markets.
I had literally 1 month of profitable trading results when I quit my job. This was a HUGE mistake because that one month really meant nothing. I spent the next 9 months so stressed, regretting my decision every day and I spent about 12 hours on the charts daily trying to take trades and figure out the best strategies. The reality was my trading strategy was absolutely fine, but it was only going to make me a few percent per month – which I couldn’t live off.
The lack of results caused me to hop from strategy to strategy – I literally tried everything. After what felt like forever, I found out about prop firms and after a few failed attempts I managed to actually get a small amount of funding. I started trading sensibly on the higher time frames and even got a part time job to pay the bills – ensuring I didn’t have to make any ridiculously aggressive trades in the month.
The lessons I learned were so valuable. My main takeaways were…
- DON’T go full time as a forex trader unless you really have to.
- DON’T go full time as a forex trader unless you have 6 months minimum of track record (actual record, not theory)
- DON’T go full time as a forex trader unless you’re prop firm funded.
- DON’T go full time as a forex trader unless you have a year of savings.
The laptop lifestyle simply doesn’t exist for forex traders. Being a professional trader needs an immense amount of focus, dedication and a huge number of hours every week – much more than a 9-5.
Conclusion – How Can I Trade Forex Full Time?
In summary, you can trade forex full time if you have at least 6 months track record, $100,000 in trading capital, at least a year of expenses saved and if you really need to go full time. The majority of traders fail in forex over the long term and I would highly recommend not even considering going full time unless there’s a real need to. Most successful retail traders have multiple sources of income that don’t come from the markets. Markets are unreliable and you will not be able to make a consistent monthly income.
If you have any experience trading full time please do leave a comment down below, I’d love to hear your experiences!