Become a Successful Trader

March 29, 2012

Moonlighting Your Trading Business: Incorporating Trading, Work, and Life

How I made the switch from working a “normal” job to trading full-time.

Life BalanceWe all know it takes focus and a clear, objective state of mind to trade well. Balance is the name of the game. I trade my best when I’m well rested, well fed, and well organized.

As the saying goes “clean desk, clean mind.” Keeping a well organized and clean workspace can lead to increased productivity and better trading. Here’s how you can get organized and make the transition to full or part-time trading.

A Quick Exercise to Help Get OrganizedWhat's Important?

Take a minute to list all the things that are important to you. List them one by one and pick out your top 3. I will tell you right now trading is NOT my #1 (good health aside) family and friends are.

Balance time in front of screen with enjoying the company of your family and friends. It will make you a better trader and more importantly a happier human being.

How I Got Started in Trading

I first began my trading career back in college at Arizona State. My time was occupied with classes (full-time) and work (part-time) along with simply being a college kid.

Sparky the Sun Devil!I found a swing trading approach to best fit my lifestyle at the time. I would spend a few hours each night doing my research and market analysis, picking the stocks I planned on trading the next day and set my orders.

I would watch the market open and make sure any orders that got filled were appropriately managed with stops etc. then I would monitor the markets during the last hour. That’s it.

This hands-off approach allowed me to be quite successful during this period. Soon after, I developed my day trading methodology and began to incorporate day trading into my already busy work, and life schedule.

(My in-depth day trading setups can be found under the ‘Trading Rules’ tab at the top).

Creating a Structure for Trading AND WorkingGet Rid of the Waste

Swing trading can be a great, low stress, low time commitment method for those confined to a 9-5 day job. If however, you’re looking to cut back your hours in the office and make the transition to trading full-time or day trading part-time I would first recommend reading The Four Hour Work Week by Tim Ferris (I prefer the audio version).

This book helped me streamline many areas of my life and get rid of the time wasters. Once the distractions, miscellaneous to do’s, and other non-productive tasks were out of the way I was able to solely focus on day trading in a clear and objective manor.

The book helped me cut out a lot of the “clutter” in my life and will dramatically improve your productivity at work leaving you more time to trade and enjoy life.

The Most Productive Time to Trade

For those on the West Coast (U.S.) you have the luxury of an early market open (6:30 AM) making it easier to get a few solid hours of trading in before any 9-5 job commitments roll around. I’ve found time around the NYSE open which overlaps the European session to be the most productive and profitable time to trade.

NYSEIf you don’t live on the west coast and the NYSE open falls during your work hours try cutting back your office hours by 30-40%. “What, how can I do that?”

Simple. Take an inventory of your daily tasks for 5 days then stop doing 80% of the things that are non-productive time wasters. (Things such as constantly checking email, micromanaging small projects, and attending long drawn out meetings with no clear purpose and set plan of action).

This allows you the time to trade. Let’s face it, trading at work doesn’t work. Unless you have an office with a door and can disconnect the phone I do NOT recommend day trading from work.

Making the Switch to Full-Time Trading

Making the switch slowly from working 9-5 to trading full-time is a great way to prove to yourself that you are capable of supporting yourself solely off trading income. Having another source of income at first can be very helpful in alleviating the stress and psychological pressure of trading. This pressure leads to forcing trades and making bad decisions.

Whatever your situation, I’ve found that making the transition to trading as a career is one that should not be rushed. The markets will always be there. Take the time to organize the things that are important to you in your life and incorporate trading into your life in a way that provides the least stress with the most reward. This is when you will be at your best.

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About Tim Racette
Tim Racette is a day trader of 15+ years in the E-mini futures and swing trader of stocks. Mountain biker, lover of the outdoors, and explorer. Tim is an ASU Sun Devil and a Chicagoland Native now living in sunny Scottsdale, AZ.
  1. Tim

    This is great info. I have been trading for 5 years now and want to transition from my day job to full time trading. Questions I am going through right now is how many months/years of saved up living expenses should I have before making that leap (how much did you have)? How big should my trading account be before going full time? I am trying to make consistent returns month over month for the mornings I am able to take off, but its really hard to know exactly how I will preform when going full time since I am unable to watch the markets at my day job and miss much of what happens.

    • Hi Greg, I did two things when I transitioned to full time. Minimized my expenses and remained patient. You want to be able to go through the cycles of the market trading the same strategy so 1 year would be a good time frame in my opinion. As for trading account size, I’d say no more than 25% of your total liquid assets (not including any house or real estate). So if you had say 100k in stocks/bonds/401k/retirement etc, I wouldn’t allocate any more than $25,000 to a trading account. All of this comes AFTER you’ve proven to yourself that you can turn a profit on paper and with a small account. There’s no sense in increasing contract size until you can show the numbers make sense trading 1 and 2 lots.

      I’m a big advocate of making the transition slowly. You don’t NEED to trade all day long. If possible start with trading the morning and working your job in the afternoons. This does two things, it keeps cash flow coming in to pay the bills aside from your trading account and it also allows you to do a trail run of trading professionally. The markets will always be there so there’s no need to rush. Create that solid foundation to build off of.

  2. Tim,

    Thanks for the great information.

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