Forex a Great Hobby, But Not a Great Job

Community Introduce Yourself
1

Forex a Great Hobby, But Not a Great Job

by Steve Epperson, Recovering Full-time Forex Trader

Ever wonder what it’s like to be a full-time trader? To set your own hours? Be free from that horrible boss?

Well, sit back and let me tell you my experience. It was short-lived, about two years total. But that’s an eternity in the trading world.

Let’s suppose you get good enough

Suppose you take a few excellent, professional-level courses that set you apart from everyone else. Yes, they do exist. And I spent a lot of money learning how to be a “great trader.”

Unfortunately, becoming a good trader is what your broker wants you to be. After all, the better you are, the more money you’re willing to risk. And, of course, that translates into more commissions (spread) for them.

Let’s suppose you save up just enough cash

Nobody ever tells you exactly how much you need to have at a minimum to go full-time. But I’m going to now:

20K

That’s it. That’s the magic number if you want to trade and make as much as the guy working full-time as a general manager at an auto parts store. Not bad money, really. And you don’t have to worry about a boss or anything.

I had 16.5K. Close enough, I thought, especially since I was so darn good. And it still gave me a stop loss of about $165 (1% risk). That’s pretty awesome for a guy living in the deep south.

Of course, that’s all I had, every last dime. I even cashed in my pennies at one of those crazy change machines you see at Walmart. I tried to reach 20K, but I just couldn’t quite get there.

So, now that you have money and expertise

Now that you’re ready to go pro, it’s time to deposit all your hard-earned money into your forex account. And if you’ve never sent more than a few thousand to your broker, it’s a harrowing experience at best. I liken it to sending your favorite child across the Atlantic— on a rubber dinghy.

You start to make money, wow!

It’s an amazing feeling when you start paying for your groceries with your winnings. And sometimes, you can even pay your water bill. So, now you know you’ve hit the big time.

But then, it starts to happen. There are a series of unfortunate events (stolen title alert) that come on unexpectedly. They don’t occur all at once but gradually over time.

Here are just a few examples.

You can never utilize your nest-egg

One of the biggest problems (for me, anyway) is to sit there looking at that account balance day after day. It just sneers at you as if laughing at the fact that you can do nothing with it.

If you need to fix the car, tough. If you have to make a repair to the house, tough. You can’t touch it. You need it to trade that crazy exotic pair you’ve had your eye on all week.

The mortgage gets paid, no matter what

Losing months are a reality in forex. There’s not one trader who has made profits indefinitely. But, if only someone would have explained that when you started.

However, even if you manage to break even, you’ve still lost. That’s because you have to take real money out of your account each month to pay your bills. Isn’t life unfair?

And then, it hits you

Burnout. It’s an ugly word that no one wants to face, especially a full-tme trader. I remember trading the London breakout, going to bed for three hours, getting up in time for the US session until the consolidation, and heading back to bed for a couple more hours until Asia.

I got to where I was trading all three sessions. That’s because I would lose on the one-hour chart and have to scratch and claw my way back on the 5-minute during the next session.

It worked, but yikes, was I tired. In fact, I got so tired that I started making dumb mistakes.

I blamed it all on forex, so I tried trading commodities. I started with the e-mini and got burned. Then, I switched to crude oil and got burned even more. I may have even tried sugar, but I’m not really sure what I was doing at that point. After that, it was all just a blur.

I started to really hate trading

I began to hate getting up in the morning, or evening, or whatever. But I wasn’t alone. I talked one day with a trading buddy online. He said the same thing.

He lamented, “I hate trading. I hate having to watch those damn charts all the time. Im sick of it. I would rather wash dishes than do this.”

He wanted to quit, but his wife wouldn’t let him. I thought that was weird, but I figured he must have been making some pretty serious bank.

The bottom line

I didn’t blow my account, but I was well on my way. So, I went out and got a real job as a taxi driver, which was a lot less stressful. Go figure.

And now, I am working in a job I enjoy. But it has nothing to do with trading. Still, forex is a fun hobby that doesn’t take up too much time, and it certainly won’t put me in an early grave.

22 Likes
2

Very informative post.

1 Like
3

Thanks, Steve, for that torchlight on reality. I hope many aspiring hopefuls will read it and think seriously about it. There is a world of difference between trading full-time for a living and trading alongside a normal job and using the earnings for luxuries and funding investments and pension plans.

That does not mean it is impossible to earn a full-time wage from trading but it does underline the need for a good amount of capital to both fund high level risk exposure and to cover those losing months without needing to draw on your funding capital.

There is a serious level of stress in living from month to month with no knowledge of how the markets and your trading will perform in the months and years to come. It may well work well during the carefree years of youth and without commitments, but as a family person with commitments and other demands it can become a grueling battle if one has to continue for years ahead.

Many successful traders seem to inevitably look to other avenues of income like YT and mentoring, etc. And one should ask why this is if the person is a successful trader.

If one is going to succeed in a career as a full-time retail trader then you need to look far beyond just paying the bills in the next few months. You need to also aim to build a big nest egg that will cover you if and when trading becomes difficult or even impossible (e.g. regulatory changes or physical/mental impairment) and you are left without a career or a skill that can lead you back into normal employment.

This doesn’t mean that no one should try if they wish to, but it does mean that one should be aware of the difficulties and challenges and requirements and have a plan B just in case it fails.

2 Likes
4

I think with proper knowledge, you can earn money from this market.

4 Likes
5

Very interesting read, Steve! :blush: I guess we all have different paths, but I’m happy you’re now doing something you enjoy. :blush: If you trade forex as a hobby, how much time then do you usually spend on your charts now, as compared to when you were trading full-time? :thinking:

6

Great points all. I made the mistake of not having that extra cash as a backup. And I also made the mistake of not building the account in tandem with my obligations. But it is difficult to do both.

One thing I didn’t mention is that immediately after I pulled my funds, I tried going with a prop firm. But that failed, also. I will write another post on that. It’s interesting what I learned from that experience.

7

I’m sure you’ve heard the term “set and forget.” But in full-time trading, there’s no such thing, especially since I am primarily a scalper. Like I said in my piece, I was on the charts all the time. It’s all I thought about.

And even on the one day when the market wasn’t open, I would manually back test my strategies for the upcoming week. It was brutal.

Now, I get on the charts every night for about 15 minutes to maybe an hour and a half. I usually have just enough time to scalp the U/J or E/N pairs, since they are the ones that move during Asia. That’s it.

I am at just under break even on my little account, and I’m happy as a clam.

1 Like
8

Good honest post, its interesting but sometimes you just fall out of love with something and thats okay too. I do think you need other sources of income like property/investments as you dont want the added pressure of a sole income whilst trading

9

Personally, I would place the figure much higher, nearer 100K available funds (although that does not need to be actually in your trading account, but available if and when needed).

For example, if you aim to earn only $2000 per month that is already an ambitious target of 10% increase on a 20K account every single month, year in, year out. I doubt many are going to come anywhere near that consistently! Afterall, most traders make no profit at all let alone 120% per year…

And is $2000 per month even worth the stress and risk involved even if you can make it? Well, maybe for a while…

This is not me just being pessimistic. If you are planning to trade full-time then you need to treat it as a professional business and that includes a business plan which is realistic. These points are the kind of issues that are essential to consider beforehand.

5 Likes
10

Some really honest and opinion posts here, thanks to Steve and others contributing.

I have to say I find the distinction between “full-time” and “hobby” just too binary. Let’s suppose you start trading like most people do, already in a full-time job. Let’s suppose that whatever you earn, your trading gives you an extra 25%. That’s like having a job but being paid better than everyone else around you. Or having a job but paying no income tax. Is not that a worthwhile achievement? And would that not make you look differently at your job? And your trading?

Remember of course that compounding your trading gains means that you will be getting a nice pay increase every single year.

4 Likes
11

I fully agree with you on this @tommor. However, unfortunately, it seems many of the 1st posts that appear here on BP are from people seeking to leave jobs they don’t like or are unemployed or without a sufficient pension, etc. These people are all dreaming of an alternative income source which will lead to financial freedom and free from employment constraints.

We all know that it is unlikely to succeed for most people and it would certainly be wise, as you say, to at least start with a trading career parallel to normal employment where at least the basic expenses are covered. If that succeeds then, and only then, is there an opportunity to consider going full-time - if that still appears attractive!

2 Likes
12

Yes, I get that. But I can also think that there were one or two jobs which I wanted to escape from which I might have stayed in if I had been taking home twice the pay I was on (which would also be twice the pay my colleagues were on, and more than my boss).

Failure to leave employment on trading gains is not a failure at trading. It must also follow that a failure to amass a large account capital before starting trading does not undermine the decision to trade.

2 Likes
13

Absolutely! That is why it is so important that anyone new to trading is fully aware of the risks that they would be facing and the basic requirements to even stand a chance of succeeding. Feet firmly on the ground and head out of the clouds stuff!

Besides, trading full-time compared with alongside employment is like chalk and cheese. Capital building trading has no pressures, no targets, no deadlines unless they are voluntarily self-imposed. Trading becomes a pleasure and a challenge rather than a compulsory duty with a performance threshold that has to be exceeded over and over again…

It is also a question of what we mean by full-time. I am sure many people consider that they are constantly watching markets and trading opportunities but still work. In this thread I am assuming that we define full-time as being the sole source of income.

2 Likes
14

No matter how much the potential profit to be made, as Warren Buffett says - reliance on a single source of income means you are just one step away from ruin. If you want to trade as a “hobby” or work up to a main source of income great but single reliance on any income is dangerous. Reliance on forex to be that source of income, especially when you are at the start and learning is why so many fail.

1 Like
15

I’m new here, but here’s my 2 cents. This is why, if you are unemployed and have a good amount of savings, just work on multiple streams of income and the you should be fine. For example sell on Amazon, I do Options Trading, I started blogging with affiliate marketing, and I do a small amount of day trading…I can easily make a living with all of that combined. Maybe even add, staring a youtube channel…Heck, I can probably making a living just on blogging alone if I put 100% into it… BUT I think it’s better to spread yourself out and go for multiple streams of income and not limit yourself to 1 source of income… This way if one source crashes and burns, you have other sources to fall back on that you can then put more time into…That’s why people get in trouble…They don’t have multiple sources of income…Some people don’t want to go back to the corrupt corporate world and will do whatever it takes to make sure that doesn’t happen, even if it means working 12 hours a day. At least it will be 12 hours a day doing something you love…

2 Likes
16

Steven, even though you are only doing this as a hobby now, not sure why you would want to continue trading forex if you are just “under breaking even”… That’s not fun. You might be better off learning options spread trading or a different type of trading that you can make more money in… I’m happy that you are happy, but it’s not fun breaking even…Keep in mind I know nothing about Forex Trading, only options trading and regular stock trading. So I may reconsider and not pursue Forex any longer after reading all of this as it seems like it’s not worth putting in the time if the potential earnings is incredibly low…

17

Wow. Amazing story. What do you do now? :open_mouth:

18

Good reading your post.
One thing I noticed is that you didn’t set regular hours … so you didn’t treat trading as a legitimate business … which it is.

19

I await your prop trading post

1 Like
20

Well of course its not great… you did everything wrong. You used your savings, you revenged traded… and you traded out of desperation which threw off your psychology.

Professional traders need more than 20k. Thats why most professional traders work for some company.

5 Likes