When to quit your 9 to 5 and trade full time

Summary

This video guides viewers through the key steps to determine when it’s the right time to quit a 9-to-5 job and pursue full-time trading. The speaker emphasizes the importance of consistency and profitability in trading, building a financial buffer, and understanding when to take the leap. With personal anecdotes and practical advice, the video provides a roadmap for anyone looking to transition from a stable job to trading, highlighting the necessary preparations and mindset required for success in the trading world.

Takeaways

• 😀 Prove consistency before quitting your 9-to-5 job; track your trading performance over time using a trading journal.
• 😀 Building a trading journal, whether for SIM or live trading, helps demonstrate your ability to maintain profitability and consistency.
• 😀 Your ability to maintain profitability through months of trading is a key indicator that you're ready to transition to full-time trading.
• 😀 You must develop a financial buffer before quitting your job; this buffer should be enough to cover your basic expenses for a few months.
• 😀 The buffer money should come from savings or trading profits and should never be money needed for essential expenses like rent or food.
• 😀 The amount of buffer varies for each person based on their living situation and expenses; calculate the bare minimum amount needed for survival.
• 😀 Before taking the leap, ensure you can at least cover your basic living expenses through your trading income, even if it's a smaller amount.
• 😀 The hardest part of transitioning is letting go of the certainty of a regular paycheck. It takes courage and commitment.
• 😀 The transition doesn't need to be immediate; it can be gradual by having side gigs or working freelance before going full-time with trading.
• 😀 Each individual's journey is different; everyone's minimum expenses and buffer requirements will vary, so tailor the steps to your own needs.

Q & A

When is the right time to quit the 9-to-5 job?

The right time to quit the 9-to-5 job is when you have consistently demonstrated success in your trading, built a sufficient buffer (savings or trading capital), and are confident in your ability to cover at least the bare minimum of your expenses with trading profits.

What is the first thing you need before quitting your 9-to-5?

Before quitting your 9-to-5, you must have proven consistency in your trading. This means having reliable data, analytics, and a trading journal showing consistent profitability over a period of time, whether in SIM trading or live trading.

How can you demonstrate consistency in trading?

You can demonstrate consistency by keeping a trading journal and tracking your trades over time. This journal should include detailed statistics like win rates, profits, losses, and the overall performance over weeks, months, and even years to show that you can remain profitable consistently.

What should be included in your trading journal?

Your trading journal should include key data such as entry and exit points, position sizes, profits and losses, and the reasoning behind each trade. Using tools like TradeZella, TraderSync, or Myfxbook can help track these metrics and analyze your trading performance.

Why is it important to have a financial buffer before quitting your job?

Having a financial buffer is essential because trading income can be unpredictable. The buffer ensures that you can cover your essential expenses (rent, bills, groceries) without relying on trading profits in the beginning, especially as you're transitioning into full-time trading.

What does a buffer look like, and how do you calculate it?

A buffer is a sum of money you set aside to cover your expenses in case your trading does not generate consistent income immediately. The amount of the buffer depends on your monthly expenses, such as rent, utilities, and food. It could range from $5,000 to $25,000 or more, depending on your lifestyle and responsibilities.

What type of money should you use to trade?

You should only trade with money that you can afford to lose. This means not using rent money, grocery money, or funds needed for essential expenses. Trading should be done with money that won’t cause financial strain if you lose it.

How do you know when you're ready to take the leap from part-time to full-time trading?

You’re ready to make the leap when you’ve proven that you can maintain consistency in trading, have a sufficient buffer in place, and are confident that your trading profits can at least cover your essential expenses, even if you’re not making as much as your previous job.

Is it necessary to quit your job cold turkey to become a full-time trader?

No, quitting your job cold turkey is not necessary. Many people transition gradually, starting with part-time trading, side gigs, or other income sources to build a buffer before fully committing to full-time trading. This allows for a smoother transition and reduces the financial risk.

What are some challenges when transitioning to full-time trading?

Some challenges include dealing with the uncertainty of income, managing risk, and adjusting to the pressure of relying solely on trading for income. It's also difficult to maintain discipline and consistency without the structure of a 9-to-5 job, which requires a strong mindset and financial planning.