The Ultimate Guide to Profitably Trading Options Full-Time
I believe that on some level every new trader dreams of trading options full time and not working a regular job. The reality is however, that you're need a lot of capital before you make the leap to full time trading and that means you'll have to learn how to effectively trading options while working your day job. Hard as it may seem at first, working full time and trading options is not that complicated nor is it impossible if you're smart about your time and the strategies you focus on. In today's show I want to cover 10 questions that our community members asked with my answers as to how I suggest working options trading into your busy work schedule. Note also that I also work a full time job as a stay at home dad to two little girls while running our massive community of 60,000+ traders. I've also had to learn to be incredibly efficient with my time actually making trades just like you.
Key Points from Today's Show:
- The best thing about trading with a full-time job, is learning to hone your skills.
- Making the most of your time is crucial when trading is your side-gig.
No Time to Spend Looking at the Markets
- Take the decision-making out of your hands, so it becomes a numbers-based situation.
- If 30 minutes is all you can carve out for trading, then you have to maximize that time.
- Find the time during the day that best suits your own schedule.
The Best Time to Trade
- Volume-wise, the most active times at the market are at the open and the close.
- Ultimately, it does not matter what time you trade over the long-term.
- As a long as you have some consistency of when you trade, it should not make that big of a difference.
Missing Trade Opportunities
- Remember: the trades you see in front of you are not the only trades in the world.
- There will always be another setup and trade opportunities; rarely are they once in a life-time.
- Never rush your trade decisions, and do not worry if you cannot get into a trade.
- Use the days that you can access the markets to be more active in trading.
- If you can only access the market one-day a week, increase your trading activity on that day.
- However, trading multiple days is more ideal than trading only one day per week.
Accessing a Computer During Work
- Use other devices like a tablet or smartphone to gain access to the markets.
- Carve out time to go out for lunch and get access to a computer elsewhere.
- Learn how to trade on your smartphone using mobile apps.
Using Contingent Orders
- The easiest way to automate your trades is through contingent orders for closing trades.
- Use a Good Till Cancelled (GTC) order to get out of profit target.
- Can use contingent orders for order entry, but it does become more difficult.
- With open contingent orders, double-check to adjust strike prices according to open price.
- Never use market orders, only use contingent orders that are limit orders.
Transitioning Out of Your Full-Time Job
- First, get to the point where you start paying yourself a salary out of your trading account.
- To transition out of your job, you have to make some sacrifices.
- Cut down as many of your expenses as you can to set yourself up for success early on.
- Take as little as $50 out of your account each month, automatically, to pay one bill.
- As your account grows in value, increase the amount you take out each month.
- Create a snowball effect so you can eventually transition out of your job over a few years.
Efficiency: How to be Lean and Mean
- To be most efficient, focus on a couple of different strategies.
- Use the trade optimizer and back-testing software to find what strategies work best for you.
- Cut out the strategies that do not work for your schedule.
How Many Symbols to Trade
- Realize that there are seasons of activity where you are more active versus not.
- Focus on a small collection of symbols that you can mechanically trade as much as possible.
- Back-test the few strategies that you focus in on, and pick what works best for you.
A Realistic Expectation of Returns
- The expectation of returns is different for everybody, dependent on several factors.
- A higher return goal will mean much more risk and volatility in your account.
- The 15% ballpark is a reasonable return to expect when consistently trading.