Binary Options and Your Day Job: Partners or Enemies? Discussion
Binary Options and Your Day Job: Let’s Talk About
To some of us trading is a way of making some extra money to buy something nice that you wouldn’t afford otherwise, to others it is a straight road to financial independence and the freedom to choose your own hours. Ok, but what about your job? When is a good time to quit it? And more importantly, should you quit it if you are successfully trading binary options? I don’t have a definitive answer, but I will try to highlight some of the pros and cons of quitting your current job.
To Quit My Job or Not – That is the Question!
I always say that if you are making money out of trading now, in your current situation, whether you are employed or not, you shouldn’t make any changes. If it works, don’t fix it! But on the other hand, maybe you started trading with the goal of quitting your job and sustaining yourself with the profit you make from binary options. Or maybe you are simply not decided yet. In any case, here’s why quitting your job might be good for your trading… or not.
The Pros of Not Having a Job
If you quit your job, you won’t be stuck 8 or 10 hours in an office or wherever you work and this will give you more time to focus on trading. Coming home from work late in the afternoon and seeing you missed good trading opportunities can have a negative impact on your future trading decisions. You could spend that time trading and making money.
Another thing related to time is the fact that you could allocate more of it to learning and improving your skills. There’s a lot of free information about trading around the Internet, but your job could prevent you from reading it and thus upgrading your trading style.
If you don’t have a steady income generated by a job, you will have a more responsible approach towards trading. You cannot treat trading as gambling or a simple hobby anymore because your bills are paid straight from the trading business.
When trading is your only income, you will apply better money management techniques and you won’t jump into trades just for the thrill of it. If you backtest a strategy and you see it is most profitable on a 15 minute chart with an hourly expiry, you will stick to that time frame, without placing 60 seconds trades just because it’s fun.
The Cons of Not Having a Job
The uncertainty of your income can affect negatively your trading. You don’t know how much money you will make by the end of the month and in fact you don’t know for sure that you won’t lose some. This can make you trade with fear of losing or not making enough money and fear is one of traders’ worst enemies.
Overtrading. This is something common among people who just quit their jobs to have more time to trade. Once you quit your job, you have roughly 10 more hours you can allocate to trading and this can make you want to trade more than normal. After all, it’s boring to stay in front of your screen and to just watch all those assets move without trading any of them.
Having all that extra time can make you want to improve your trading system. Although there is nothing wrong with improving something, trying too much to filter out bad trades can have a negative impact because those filters you apply (indicators, extra rules for your strategy, etc.) will eventually prevent you from taking good trades as well as bad ones. That means that your original strategy – the one you quit your job for – has now changed and so did its accuracy rate. Maybe it’s better now, but the fact is you don’t know for sure.
Let’s not forget about brokers: if you don’t have a job and you rely exclusively on your trading income, what will happen if your broker delays your withdrawals? You cannot delay paying the bills using the excuse “My broker is still processing my withdrawal”. Of course, this can be avoided if you trade only with top notch brokers so make sure you choose wisely.
The Bottom Line: It All Comes Down to What Type of Person you are, but Keep Your JOB!
Some people react positively to stress, meaning that when they are faced with an important task, they focus all their energy towards reaching their goal. On the other hand, some people crumble under the pressure and the increased responsibility overwhelms them, pushing them to make bad trading decisions. It all comes down to what type of person you are. If you think you can deal with the pressure and your trading is successful, maybe quitting your job is a good option… otherwise, keep your job and think of trading as a side business.