How to Trade Trends While Working Full Time
Futures trading is often seen as the NFL of trading reserved only for the upper echelon of traders. Nevertheless, it’s still possible to make money trading before you quit your 9-to-5 job.
I was in the same situation like you are now today. I worked full-time as a Securities Analyst and faced tremendous difficulties dedicating time to concentrate on the market. It felt like it was impossible. Any time my boss would chat me up and ask me to whip up a spreadsheet or look into a particular issue.
I tried my best to fulfill my tasks but would always have a browser tab open with live charts so I can check in once in a while. Some employers even disallow you from day trading at work.
By the time I got home, most of the market action was already done. I knew that futures trading would be my exit strategy, but constant distractions at work took a mental toll which eventually reflected in my trading performance. How I wished I could just throw in the towel and analyze charts for weeks on end!
Making the transition from working full-time to becoming an independent futures trader is a fine balancing act. To help you succeed at it, I’ll tell you how I made it to this stage.
Prepare a Good Chunk of Savings
Before you quit your full-time job, let’s clarify a few things first. Futures trading isn’t for you if you have little money to spare. Even if margin requirements are low, I suggest having at least $10,000 deposited on your brokerage account. Anything less won’t end up a fruitful endeavor because emotional trading would get in your way too much. This means your first step is to save up.
Take a rather small index futures contract, the Micro E-mini Nasdaq-100 (MNQ), for example. It’s the futures contract for the underlying Nasdaq-100 stock market index and has a multiplier of 2. If the Nasdaq-100 moves by 100 points on a regular day, you’re looking at a $200 gain or loss per contract. Strong days can even have 500 point moves which are $1,000 already. These are the kinds of moves you must be able to handle, both financially and emotionally.
A $10,000 account shouldn’t buy or sell more than 1 MNQ contract. Accounts with $100,000 or more can easily trade the larger NQ which has a multiplier of 20.
Analyze Markets at Least 1 Hour Daily
Now that we ensured that you are sufficiently funded, we can proceed with the way you want to trade.
I would regularly take a few spare moments of the working day, even weekends, to thoroughly analyze charts and to identify a few universal rules that you can trade by. One hour a day sounds realistic with a full-time job, but the more the better.
You’ll want to come up with a trading strategy that can potentially give you financial independence for years to come. Trading out of gut feel would be financial suicide. You can do that in the beginning to get the hang of futures trading, but nothing more. A trading strategy is what you have to come up with by yourself. I can give you pointers, but you won’t feel confident trading with other people’s rules unless you just want to copy my trades. I share trading signals here, so by all means, be my guest.
If you want to casually dabble you’re unlikely to gain consistency. I strongly advise against day trading because odds at succeeding with it are severely stacked against you. Day trading consumes most of your attention during the day and is a challenge with a full-time job. I tried it for a while and abandoned it immediately.
Pick a Good Charting Platform
A suitable charting platform is a critical companion of a successful trader. Think of it as a heads-up display that helps you to navigate the markets. My personal favorite is TradingView which offers extensive visual configurations. It’s a browser-based charting platform which means that all layouts are stored in the cloud and you have them at hand wherever you log in. It even has a mobile app to let you analyze charts on the go.
Most newbies day trade tiny wiggles day in and day out because they simply don’t know any better. They look at the 5-minute chart and try to spot an opportunity for every moment. That’s obviously not realistic.
I found it much easier to become profitable after zooming out to the 4-hour chart and trade trends in that time frame. You will spot trends therein that span over several weeks to months and don’t dissipate from one moment to another. You can safely put on a trade and let a trend unfold over the next several weeks.
Based on my own statistics, trading opportunities emerge mostly during the morning session of the regular trading hours (RTH). After that, professional traders on trading floors go grab lunch and let their positions run.
There may be other opportunities in the last 2 hours of the trading session after traders have mostly come back from lunch, but I’ve rarely done a significant move during the afternoon session.
Follow Professionals Who Made It
Another way to succeed at futures trading is to find a trading mentor with a proven track record. There’s a significant risk that, after years of studying the market and thousands of dollars lost, you still don’t reach consistency by yourself.
Professional traders who’ve made it are generally generous because they want to pass on their knowledge to whoever cares to listen. It’s a great shortcut for beginners to gain consistency fast. I post signals of my trading strategy and tell traders where to buy or sell. It helps you transition out of the workforce faster.
After years of analyzing the market, I was able to reverse-engineer where the big boys buy and sell. Remember that my kind of trading isn’t to go in and out within a few moments. What I mean is that I put on a trade with the intention to hold onto it for several weeks. I knew that I couldn’t compete in high-frequency trading, so focus on the big trends.
Working hours have become little to none with the way I trade, and yet I make more than ever before. I currently trade 3 NQ contracts at a time and gradually scaled up with consistency. It’s really the choices you make and what lifestyle you wish to attain.
Published Tue Apr 13 2021 (last modified Fri Jan 26 2024)