<p>Ask any equity trader why he or she is trading. A majority of them will have a common answer : either for financial freedom or to be one’s own boss. </p>.<p>Being a professional trader requires a significant commitment in terms of time, money and dedication. It should not be looked upon as a mere secondary source of income or a side-business. Trading is scientific, which when mastered, has the potential to become a consistent source of income. Any full-time professional trader would vouch for that. </p>.<p>So, what are the factors one should consider before replacing their day-job with trading? You should ask yourself these four questions if you’re an aspiring daytrader.</p>.<p class="Question">Are you a risk-taker?</p>.<p>Do you have the personality traits to be a full-time trader? Do you possess the appetite to take risks and are you prepared for fast-paced business activity? Do you have the ability to take quick decisions when faced with complex situations? You need the mental ability to be calm when things are not in your favour, especially when you are in a financial drawdown.</p>.<p class="Question">Is your trading account large enough?</p>.<p>You require large capital to deploy in the market for a return that can support you financially. You need to know the historical performance, how much return you can generate, both per month and on annual basis. After having the facts and figures, you can reverse-engineer the quantum of capital required to fund your trading account. You need to have a separate trading account for day trading, swing trading and positional or long-term trading. You cannot put all trading capital in one account. You need to diversify as per the trading style. </p>.<p class="Question">Do you need to withdraw money from your trading account to meet your financial needs?</p>.<p>You need to strategise financially around your trading account. You need to create a buffer capital for a period of six to nine months. You should not withdraw capital from your trading account and deplete it. It takes time before you start getting consistent returns on expected and planned lines. Leaving your trading account untouched for long, and letting your capital work for you is the key to long-term growth. However, you can assign your day trading account for the daily withdrawal of profits at the end of the day. </p>.<p class="Question">What motivates you to be a full-time trader?</p>.<p>Do you think and believe that trading is an easier way to generate a sustainable income to support your financial needs? You can work three to four hours a day and conduct your trading business. Professional full-time trading means 6–8-hour work per day. Working on the weekends is a big part of trading.</p>.<p>Trading is a lonely profession. So be mindful of your motivation when you take the plunge.</p>.<p>Finally, make sure you don’t have unrealistic expectations and be veryclear about what it takes and means to be a full-time trader. </p>.<p>(The author is the founder of a fintech firm)</p>
<p>Ask any equity trader why he or she is trading. A majority of them will have a common answer : either for financial freedom or to be one’s own boss. </p>.<p>Being a professional trader requires a significant commitment in terms of time, money and dedication. It should not be looked upon as a mere secondary source of income or a side-business. Trading is scientific, which when mastered, has the potential to become a consistent source of income. Any full-time professional trader would vouch for that. </p>.<p>So, what are the factors one should consider before replacing their day-job with trading? You should ask yourself these four questions if you’re an aspiring daytrader.</p>.<p class="Question">Are you a risk-taker?</p>.<p>Do you have the personality traits to be a full-time trader? Do you possess the appetite to take risks and are you prepared for fast-paced business activity? Do you have the ability to take quick decisions when faced with complex situations? You need the mental ability to be calm when things are not in your favour, especially when you are in a financial drawdown.</p>.<p class="Question">Is your trading account large enough?</p>.<p>You require large capital to deploy in the market for a return that can support you financially. You need to know the historical performance, how much return you can generate, both per month and on annual basis. After having the facts and figures, you can reverse-engineer the quantum of capital required to fund your trading account. You need to have a separate trading account for day trading, swing trading and positional or long-term trading. You cannot put all trading capital in one account. You need to diversify as per the trading style. </p>.<p class="Question">Do you need to withdraw money from your trading account to meet your financial needs?</p>.<p>You need to strategise financially around your trading account. You need to create a buffer capital for a period of six to nine months. You should not withdraw capital from your trading account and deplete it. It takes time before you start getting consistent returns on expected and planned lines. Leaving your trading account untouched for long, and letting your capital work for you is the key to long-term growth. However, you can assign your day trading account for the daily withdrawal of profits at the end of the day. </p>.<p class="Question">What motivates you to be a full-time trader?</p>.<p>Do you think and believe that trading is an easier way to generate a sustainable income to support your financial needs? You can work three to four hours a day and conduct your trading business. Professional full-time trading means 6–8-hour work per day. Working on the weekends is a big part of trading.</p>.<p>Trading is a lonely profession. So be mindful of your motivation when you take the plunge.</p>.<p>Finally, make sure you don’t have unrealistic expectations and be veryclear about what it takes and means to be a full-time trader. </p>.<p>(The author is the founder of a fintech firm)</p>