I’ve been struggling a lot lately with the realization that I will probably never be able to combine the capital and the skills necessary to make trading a full time occupation.
At this point in my life, if I am able to stockpile a couple hundred thousand dollars doing something, I should probably just keep doing that. If my only focus is trading, I’ll be the guy making huge returns on his peanut-sized portfolio that gets eaten by transaction costs.
As I was doing some morning reading the other day, I came across an article by Nial Fuller called End-of-Day Trading for People with Jobs. While the article was geared towards Forex traders, I thought that Nial made quite a few excellent points that could apply to all traders. Here is how he hooked me:
Most of you reading my lessons are probably low on time and work regular jobs during the day or run businesses of some form.
Yep. That’s me.
Regardless of what job, career or business you might have, it probably consumes most of your available free time each week, leaving you only a small window to look at the markets each morning and night.
He goes on to discuss the fact that Forex markets open earlier than other markets and trade virtually round the clock. What I found more interesting was his next section, which discussed using longer-term trading strategies:
What you need to understand, is that the lower in time frame you go, the more ‘noise’ and meaningless price movement there is. So, are you really ‘missing out’ on anything important if you ignore these low time frames?
No, you’re not, in fact what you’re missing out on is stress, over-trading and losing money, and these are all things that everyone agrees are good to miss out on. The feelings that traders get of “missing out” on trade setups, are simply born out of greed, fearand a “need” to be in the market all the time.
He adds that work is actually a needed distraction from over-trading:
Your job is a natural distraction from over-trading and over-analyzing the market and it can help you remain disciplined and patient in the market, in addition to providing you with a steady flow of income, which you also need to harvest a successful trading mindset (you can’t trade live if you’re broke).
While you are at work, the market is ebbing and flowing, and most of what it’s doing is meaningless and not necessary for you to observe, so you avoid getting sucked into the ebb and flow and volatility of the intra-day price movement while you are at work.
Nial goes on to reinforce his main points, but the message was clear for me at this point. Despite my strong desire, I am never going to be a full-time trader. Therefore, I need to put together a system that will work with my current career. Trading after work is the only way I will ever be able to trade successfully.
This falls right in line with what I have been thinking about Nick Radge’s Weekend Trend Trader and Mebane Faber’s Ivy Portfolio.