When you?re first learning how to navigate the world of stock trading, it might be tempting to quit your job and devote full-time hours to mastering the market, especially if you?ve had some early success. But for new and aspiring traders, holding onto your day job is one of the smartest things you can do, and not only financially.
The trading habits you learn from adopting a less-is-more strategy while you try and pay your bills can actually contribute to your success. You wouldn?t quit your job tomorrow to write a novel, would you? If you?re an inventor, you wouldn?t quit your job before you invented something that would sell. You have to look at stocks the same way ? don?t count your chickens, and you could wind up with a lot of eggs.
1. Making Money Wisely
Whether you?re getting started in day trading or investing, you?re not going to make millions of dollars overnight. Nobody does. The stock market is all about risk, but you learn early on to make the smartest gambles you can. You?ve probably read up on them. Don?t invest all your capital at once. Don?t spread yourself too thin, but don?t put all your money into a single stock either. Even if you?re making wise moves, there?s still the risk of great financial losses. And if you have a spouse and children? This risk can be scary. Knowing you still have a paycheck means you don?t have to think about financial ruin every time your investments go bad. Your family will thank you for that.
2. Avoiding Overtrading
Overtrading is the biggest cause of failure for most beginning traders. This is simply trading too much stock at once or trading too often, when there?s no reason or advantage. Having a day job can prevent you from doing this because you?re not around to watch the charts all day. If you limit yourself to one daily evaluation, along with checking the market on breaks and lunches at work, you won?t second-guess yourself and make mistakes. A limit on your trading time means you?ll need to get a tighter plan for investments, and eliminating most of the financial stress will help you make the right decisions. Remember, trading is about patience, and it?s about doing less to get more.
3. Learning As You Go
Like many skills and art forms, trading stocks is something that you never stop learning. Even experienced and successful traders are constantly reading up on the market and attending seminars. If you start out trading part-time, you have the time to spend racking up experience. You can learn what works for you and where your skills lie without jumping in the deep end and not knowing how to swim. Everybody takes a while to reach success, but not rushing into your trading career can ensure you have a much bigger chance of getting there.
Quitting your day job because you?ve achieved financial freedom is an amazing feeling, and it?s the ultimate goal for most people. You?ll never really know the feeling of being your own boss when you?re still working for someone else?s company. But never underestimate the value of your day job and be willing to take your time. Knowing that you did things the right way can make your future in trading a lot more rewarding. It makes sense. You have to plow a few fields before you can own the whole farm.
Laura Dodge blogs for http://www.tradingacademy.com/, blog that features tips for all levels trading.
Source: http://www.ericfinance.com/part-time-trader/
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