Trading forex is a popular side hustle and is often done alongside another job or in spare time to make a bit of extra cash. If you find yourself dedicating more time to trading, then you might wonder whether it’s worth turning your hobby into a full-time job.
Before you make the leap, it’s a good idea to make sure that you’re fully clued up on the forex market, what’s involved in trading and the time you’ll need to commit to make it profitable. You’ll probably want to have a year or two minimum under your belt as a part-time trader before throwing in the towel on your nine to five.
If you’ve decided to take the plunge, then you’ll want to consider the following factors:
If you’re planning on to work for yourself as a self-employed individual, you’ll need to set up as a sole trader and register for self-assessment for tax purposes. You’ll need to keep records of what you earn so you pay the correct amount of tax.
Set up a business bank account that’s separate from your personal one so you can keep track of your incomings and outgoings easily.
Choose your trading platform carefully, thinking about the features you want to make trading easier for you. You might prefer to stick to one that you’ve already been using, but, if you’re wanting to increase your trading opportunities or leverage advanced tools, it could be worth finding a range of options and selecting one that suits you better.
Develop your skills
Trading as a hobby is vastly different to making it a full-time job so you’ll need to constantly stay on top on relevant industry news, market performance and events relating to the wider global economy, such as inflation, interest rates and any significant world events.
You should also consider using a range of trading strategies, depending on your preferred assets. There are many online resources that can help you expand your knowledge even further including expert blogs and guides.
Don’t underestimate the psychological side of trading
You’ll already be used to dealing with the anxiety and fear that trading brings with it but trading as a job can be hugely different from doing it as a hobby. Don’t let fear steer you off course when you have a reliable strategy but also don’t place trades just because you think you’re on a “winning streak”.
Remember to ride it out, especially with longer term investments, and take steps to minimise losses, especially during volatile times.
Finally, don’t forget why you began trading in the first place. If you have a bad trading day, don’t let it dampen your spirits, but readdress your strategy and start again the following day.