Hopefully, at one point during your forex trading career you will make the important decision whether to take your trading full time.
Having personally made that decision and travelled down the full time trading route there are several things you need to be aware of that I will briefly impart here.
The first thing you MUST know is:
How much money do I need to live comfortably?
Here are some questions to guide you with this question:
What is your budget? If you haven’t already started doing a budget for your personal finances, now is the time to get started. I’ve even created another website to help you create and manage your
personal budgets
making it easier for you to get started.
What you’ll need to know is how much you spend on each of these categories. As you progress through each of these categories what you’ll want to pay specific attention to are the essential items and the non-essential items. Meaning, what can be turned off if you have a lean or down month, and what can be switched on if you have a great month.
For example, you may have some entertainment subscriptions which are nice to have and enjoy, but should you enter a few lean months those monthly subscriptions would need to go. Prioritise what is essential and non-essential in each of these items:
Food (groceries, fast food, coffees, cafes)Shelter (rent, mortgage payments, rates, insurance)Utilities (electricity, water, gas, internet, phone)Tranport (insurance, fuel, rego, tyres, servicing)Giving (church/charities, birthdays)Business (data, VPS, office rent, accounting)Education (school fees, extracurricular activity)EntertainmentIf you don’t know how much you spend how do you know if you’ll have enough to cover basic living expenses? You might have a windfall month, but what if the next few months you break-even or lose money.
I cannot stress this point enough: you need to know you personal state of finances.
By knowing what you need to live this gives you a basic idea on what you need in reserve.
Living at Home
This will be different for everyone. If you’re living in your parent’s basement as I once was then your living expenses are fairly minimal while your folks bear the brunt of these living expenses. This affords you the luxury of time as you try to find consistency and profitability in your trading. That is a key point.
If you’re living at home your aim is to try, and make this a profession by being consistently profitable. You can have a month or two where performance is below average, but you need to be consistent.

Forex 2020

When you have a family things change. You no longer on your own, and you have the added responsibility of providing for your family.
If your spouse is working then there is a cushion provided during those lean months when their income can help supplement your lean months.
However, I don’t think any spouse would want to be someone’s parents by doing all the hard work at a job while their other half is losing money in the forex market.
This is why I want to stress the fact that living at home has different stress points than living with your spouse and family.
Emergency Fund
So how can you minimise the effects of stress on your forex trading?
You’ll want to build up what is often called an emergency fund. This is an amount of money that IS NOT TRADED and placed into a bank account earning negligible interest.
It’s your buffer during lean times.
It helps you rest at night knowing if you were to wipe out, you’ve got the next x number of months covered. The higher the x value the more restful you’ll be.
As a general guide aim for an emergency fund of 6 months. As you continue to increase your profits see if you can build this up to 12 months, and then review it annually as inflation, and your standard of living, may have increased for certain items.
Trading full time isn’t something to be treated lightly. It’s a big decision, and one made more difficult if you have a family. To show your seriousness on making this jump look at keeping a budget to show how you can easily meet your expenditures to your spouse. Also, have an emergency fund that is fully funded which shows how this can help sustain the home even when no profits are made over the course of the next x number of months – and try to make that x number big as possible!
Finally, in your trading plan, siphon off some money to continue building up your emergency fund as your will notice as your kids grow expenses will naturally increase along with inflation.
This helps to show a form of responsibility and maturity when making the jump to full-time forex trader