There is something seductive about entrepreneurship that makes people want to run off and quit their jobs. Perhaps it is the idealistic, romantic notion that you can strike out on your own, take a risk, and make it big on your own terms.
So, it is no surprise that a lot of people want to know if they can quit their day jobs and trade forex full-time. In this post, we will provide you with a detailed answer to that question.
The short answer is, “No. You should not quit your day job while learning to trade.”
In the long run, you may be able to quit your day job to trade forex full-time. But it will be after you have learned enough to be profitable. Let’s get into more details.
Why You Might Be Thinking of Quitting Your Day Job to Trade
There are a few different motivations that drive traders to want to prematurely quit their day jobs.
- It feels brave and uncompromising. Especially if you live in a capitalist society, you may have been raised on an idealized image of the courageous businessperson who is going to do whatever it is they like and accept nothing less than they think they deserve. Quitting your day job may feel empowering in the beginning because it makes you feel like you are living this story. But the reality is that for most of us, this story will remain fiction.
- You think if you burn bridges, it will motivate you. You might think that if you have nothing to go back to, that is going to push you hard enough to clear aside all obstacles, becoming successful through sheer desperation to survive. While indeed that desperation may motivate you, it can also cause problems, which we will discuss in the next section.
- Forex is a lot of work. You are going to probably end up feeling like you are juggling two full-time jobs. Naturally, that is going to make you want to quit the one you don’t want so you can focus 100% on forex. In fact, you could be telling yourself that this is what you need to do to learn more effectively and progress toward your goals.
- You hate your day job. If you cannot stand what you have to do each day, you probably are impatient to leave it behind forever.
- Your day job is already unstable. Sometimes, part of the problem is that you already are struggling to get by. Perhaps you are in the gig economy, for example, just patching work together. Or maybe you have moved from one employer to the next every few years. You may wonder why you should continue to struggle with that kind of instability at all.
Reasons You Should Not Quit Your Day Job While Learning to Trade
Now that we have gone over some of the reasons forex newbies feel compelled to quit their day jobs, let’s explain why doing so is highly likely to backfire.
1. You need a way to fund your trading account.
As long as you are working and earning a paycheck, you are (hopefully) staying afloat financially. You are keeping up with your bills, and maybe even setting a little aside. That is money you can transfer to your trading account.
The more cash you have in your account starting out, the faster you will be able to make progress toward earning a viable monthly income as a full-time trader.
If, on the other hand, you quit your day job too soon, you are going to be bleeding money. Your savings will be shrinking, and you certainly will not be able to keep putting funds toward forex.
2. Learning to trade profitably is going to take longer than you expect.
Most newbies have some kind of mental timeline starting out for how long they expect it to take before they are able to earn a full-time living trading forex.
The thing is, most of those timelines are unrealistic. You might think it will take you six months or a year when it will actually probably take you several years or longer.
That being the case, it is unlikely your savings will be enough to see you through that period of time.
3. Unemployment is more time-consuming and exhausting than you might realize.
If you do end up taking longer than you expect, you will be forced to return to the workforce as you continue to learn to trade.
That process can be exhausting, time-consuming, and demoralizing. Those are three things you don’t need when you are trying to focus on becoming a professional trader.
4. Desperation breeds foolhardy trading decisions.
If you are running out of money or have already run out, you will start to feel anxious and desperate. Not only can that be a big distraction from the work you need to do to become a better trader, but it might also lead you to do foolish things with your account in an attempt to make money fast. But you will only end up blowing your bankroll and finding yourself further away from your goals.
5. Quitting a job can cause issues with unemployment and/or getting a new job.
Finally, quitting a job is generally something you should avoid doing unless it is absolutely necessary and you can put a good reason down on paper for doing so.
Let’s say you want to claim unemployment while you are working on trading. That would be a smart move to conserve your finances. But if you quit your last job, you might not qualify for unemployment at all.
Also, what if you do have to go back into the workforce before you are ready to trade for a living? Then you will find yourself having to explain to employers why you quit your job. You do not want to put yourself in that position.
So, When Can You Quit Your Day Job to Become a Full-Time Forex Trader?
It is perfectly okay to quit your day job once you have a sufficient, stable income from forex trading. In fact, that might very well be your ultimate goal.
Here are some signs that now might be the right time to quit your day job and trade full-time:
- You are earning enough money from forex alone each month to completely pay your regular bills and your taxes along with some buffer for miscellaneous expenses.
- On top of the above, you are earning enough from forex that you can stockpile some in savings, and/or retirement accounts.
- You are making enough that even after removing all the money mentioned above, you can continue to grow your trading account at a significant rate.
- You have an emergency fund.
- All of the above have been true for at least six months to a year at a minimum.
- You are following all of your trading rules consistently.
- You are psychologically and emotionally handling trading well.
If you are still working on meeting the criteria above, keep at it! You will get there eventually. Even though your day job may feel burdensome, it is providing you with the financial stability you need to keep advancing your trading. When the day comes that you are truly profitable and stable enough with trading to quit your full-time job, all of your patience will have paid off.