Living expenses are only one part of financial equation. Next you must consider how much trading capital you need. This is money actually facilitate trading, in other words your account balance for trading margin, and money you will be spending on data feeds, software, and internet access. You must account for this separately, you cannot start eating into your daily living expenses money just because you took a bad trade and need some more margin.

The amount of trading capital you require will depend very much on your trading style. To day trade US Stock Markets for example, you must have at least $25,000 in your account, so budget for $30,000 to allow for positions moving against you (if you fall below $25k minimum even briefly, your account can be frozen for up to three months). If you are holding positions overnight you may manage with a lower balance but bear in mind your buying power and consequently returns will be reduced.

If all this is starting to sound expensive, well it is. There’s no two ways about it, you simply cannot survive long term as a trader if you are under funded.

This article will be concluded in part two.

The bottom line here is that before you take plunge, you need to have done everything in your power to prepare yourself for what lies ahead. It will still be harder than you ever thought, but it will be nigh on impossible with no preparation whatsoever.

Other Considerations

There are a few non-financial aspects to consider before going full time with your trading. If you have a family, how will change impact them? Do you have space to work uninterrupted during day? It’s important that family don’t assume that because you are at home you are automatically available to take kids to school, or walk dog. Make sure from start that everybody knows ground rules and that you can separate your working time from your free time effectively.

Consider also social impact of leaving your full time employer. Again, if you have a partner or family are you going to drive each other nuts being in same house all day? Relationships can be tested to limit! Or if you live alone, are you going to drive yourself nuts being on your own all day? Trading full time can give you enormous amounts of free time, but if you have nothing to fill that time with you can quickly lose plot – I’ve seen it happen and it’s not pretty.

Is It Worth It?

Nobody can tell you if trading for a living is for you, it’s something you have to find out for yourself. I’ve seen traders go through highs and lows to challenge those of any stock chart, but for most it has proved to be a good move. The long list of benefits are all there for taking, as with any change of career or indeed any major life change, as long as you go into it with your eyes open, and above all prepare, then there is no reason why it cannot work for you.