Astronaut, professor, truck driver, doctor,
rock star. Typical career aspirations for
regular folk, right? But you’re not regular
folk. You’re a trader. And maybe trading is
still your “after-hours” gig, while you make
most of your living with a title like “
manager” or “analyst” or “technician.” The question becomes: at what point do you stop
being a worker and start being a trader?
Let’s face it. The economy isn’t what it once
was. And most people aren’t spending 50
years at the same company anymore. Yes, you
may exchange your shorter-term job at some
point. But you’ll probably still trade. So, while
you may have various jobs over the years, your
trading life will likely be a constant.
FAN TASY VERSUS REALITY
As a title, “full-time trader” may not be
exactly what it sounds like. If you think
you need to be glued to a trading screen
to consider yourself legit, think again. By
checking quotes a few times throughout
the trading day on a TD Ameritrade mo-
bile app, plus keeping an eye out for bigger
news events like Fed an-
nouncements or earnings
calls, you can stay on top of
the market. Fully engaged.
Becoming a full-time
trader doesn’t mean you
have to quit your job. In fact,
many jobs are flexible enough that you may
be able to turn break time into trading time.
You may be getting insurance, experience,
and decent income from some corporate
gig. Why give that up if you don’t have to?
Now, before you grab that “promotion”
to full-time, you do need to earn it. And that
involves checking three boxes before you
may feel you've got the confidence.
Consider your trading history
A full-time trader (F TT) who uses
options on a regular basis is probably comfortable with a wide variety of strategies—
from covered calls, to verticals and iron
condors, to calendar spreads—and knows
that different market environments indicate different strategies: bullish, bearish,
neutral, short-term, long-term, high-vola-tility, low-volatility, and so on. FTTs typically aren’t one-trick ponies.
Your trading history (Figure 1) will show
you the types of trades you’ve made.
1. Head to the Monitor page of the
thinkorswim® platform by TD Ameritrade.
2. Click on the Account Statement tab.
The “Spread” column in the Trade History
section can be sorted by the type of spread.
Options FTTs have likely traded many
order and spread types. Sure, a single strat-
egy can potentially make money over time
as long as stocks continue to move in the
same direction. But if that’s your only strat-
egy, you may not have sufficient tools when
a stock’s price direction changes. A round-
ed FTT has many different arrows in the
quiver no matter what the market presents.
Also, think about which trades made or
lost money. Are the numbers consistent,
or do one or two stick out as big winners
or losers that dominate your account? For
FTTs, performance is predictable to some
degree. Naturally, you can’t predict the
market or your future profit/loss. But you
can potentially gauge profits and losses rel-
evant to different strategies. That’s called
“trade and risk management.” And it’s what
full-time traders do—as a matter of course.
Consider the historical period
Since 2008, the S&P 500, NASDAQ 100, and
Russell 2000 indices have all had major rallies, while volatility (“vol”) has been relatively
low. Certainly, there’ve been days or weeks
when the market has dipped significantly
(I’m looking at you, Brexit). But generally,
it’s been a bull market. If you’ve had on bullish positions and have been making money,
bravo. But do you know what it’s like to trade
in a bear market? How about a market that
doesn’t move for a month, a quarter, or a year?
How about choppy markets that scare you
out of positions, only to reverse themselves?
People who call themselves FTTs have
lived, and traded through, wildly different
Truck Driver Doctor Rock Star