Hello all,

I’ve been part-time trading for a while now and I’m seriously considering making the jump to full-time day trading. Of course, I’m aware that this is a significant decision and not one to be taken lightly so I wanted to reach out to those who have already made this transition to understand what the process was like.

The things I’m most interested in are:

• How did you prepare yourself for the transition?
• Did you have a specified financial stopgap in place before going full-time?
• How many months of living expenses did you save up to feel secure in case of a bad start?

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Topic

[Oscar]

I saved up 12 months of living expenses before going full hog. I also had a couple of passive income streams (rental properties) to supplement my trading income which helped ease the transition period.

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[Jojo]

Cheers. This is making me think I’m underestimating the financial cushion I need. I’ve been thinking a couple of months of costs might be sufficient but hearing you’ve saved up to a year is making me think twice. Did you find you really needed that much then?

I don’t have any other significant income streams to fall back on unfortunately!

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[Luke32]

One thing that I would say is that I had an emergency fund separate from my trading capital to cover unexpected expenses and costs.

This helped make sure none of my trading decisions were influenced by personal financial stress, which has been key given the shitstorm we’ve seen in recent years with Covid and cost of living.

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[Jojo]

If not too cheeky, how much did you have in your “emergency fund”? I want to make sure I’ve squirrelled enough away.

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[Pete]

Jojo, I took it really seriously and created a detailed business plan for my day trading. I wrote down my financial objectives, trading systems, risk management rules, and performance metrics. I’ve held myself to account with it over the last couple of years and it’s kept me focused.

I saved around half a year of costs (housing, food, bills and the like) but having more is no bad thing.

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[Jojo]

Cheers Pete. Do you have the template you first used that you could share? On here or by email perhaps?

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[Pete]

Jojo, I don’t I’m afraid. I did it years ago and it’s not really in a sharable format – it contains a lot of sensitive financial info in.

If you get on Google you can probably find loads of free templates though?

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[Christian HarrisParticipant]

I think you’re looking at this from the wrong angle.

Someone should only consider becoming a full-time trader when their income from trading equals or surpasses their income from their full-time job – CONSISTENTLY.

Being consistently profitable in trading is tough, and you need to think about how you will cope if/when you don’t make money regularly. Even the best traders have losing streaks that can last weeks.

What’s the backup plan if your trading income doesn’t meet your expectations?

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[Author]

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