Yesterday I was reading on binary options forums, and I ran across a post I swear I have seen a hundred times before in some form or fashion. It went something like this:
“Today is the day! I have finally quit my day job so that I can learn to trade binary options. I know what you all are going to say—that I should stay in my day job until I know what I’m doing. But I just have one of those personalities where I am never going to fully commit to trading unless I am willing to make a sacrifice … yes I will be on the streets if I am not making a living trading within 3 months … but I have faith in the process. I’m willing to work 19 hours a day on trading. Sometimes you just have to GO FOR IT!”
It sounds great—telling off your boss, embracing your dreams, burning your bridges so that you can make a real decision. It’d make a great Hollywood script—if it paid off.
But the reality is, these are emotionally driven decisions which come down to ego and desperation. A lot of us feel like we are stuck in dead-end jobs leading the lives that other people want for us and not what we want for ourselves.
We want to do something courageous, something amazing.
All of this is understandable, but none of it presents a rational reason to quit your day job.
Because I see these posts so often, it seems worthwhile to write out some of the reasons why you shouldn’t quit your day job. Holding on to your day job has nothing to do with a lack of commitment; these are all sound, practical reasons. Ultimately my goal in writing this is to help you make a living as a trader—not run away. The reality is simply that most “I quit my day job” stories end badly, and that is how you bust a burgeoning trading career.
If you are really committed to becoming a trader, read on to learn 9 pragmatic reasons not to quit your day job just yet.
9 Reasons Not to Quit Your Day Job To Trade Binary Options
1. Maintain your existing standard of living.
If you are earning a reasonable living right now, you will want to hold onto that if you can. Think about it for a moment. Even if you do start trading successfully right away (unlikely), you will not be making much money with it at first, and you will want to keep as much of it in your trading account as possible so you can build off of it. That means you will probably earn less than you do now for a while if all you are doing is trading.
And actually, if you have a very small account, chances are good that what you make trading in the beginning will not even be enough to support your existing lifestyle. So you would need to either scale down or get a new job for a while anyway.
2. Jobs aren’t easy to come by.
In today’s economy, a good job is nothing to take for granted—nor is any job for that matter. Even if you have a university degree and a lot of work experience under your belt, a new job is by no means guaranteed to you. So if you quit yours now to trade and it does not work out, you may find yourself on the dole for a while. Worse, you may not actually qualify for unemployment anymore since you are a trader. If you have made any income from trading at all, the government may classify you as self-employed. At that point you could lose access to UI benefits.
3. It takes longer than you think to become an expert binary options trader.
A lot of people seem to quit their day job with three months’ worth of savings. I am not sure why they think three months is the magic timeframe, but it is not. It takes significantly longer to become an expert binary trader. In fact, it will likely take you longer than a year, and there is no way to really predict the timeframe. You can not just order some binary trading signal service and start printing money. It does not work like that.
4. You may decide to trade part-time instead of fulltime.
Another possibility is that you will discover that fulltime trading is really not for you. A lot of people actually are happier and lead more balanced lives if they work a day job and trade part-time. If you quit your day job now, you are denying yourself that opportunity.
5. You will experience drawdown.
A lot of new traders have unrealistic expectations when it comes to drawdown. They think that if they become expert traders, they will never go through periods where they lose a lot of money. But you will experience times of drawdown. Everyone has losing streaks, and sometimes you may even have to stop trading for a while to figure out what is going wrong.
During times like these your income could stop or even decline for weeks or months. A day job gives you some security during these periods of drawdown. This is especially important in the beginning when you still do not have a large trading account (or savings in the bank).
6. You need the money from your day job to finance your trading.
Here is something lots of people seem to forget. How are you going to grow your trading account? You are doing to do so through trading. But if you have no day job funding your everyday life (your rent, your food, your bills, etc.), you will have to take out your trading profits every month just to survive.
This will keep your trading account from ever growing, so all you will be able to do is run in place. You will never get anywhere.
But if you are paying for your monthly expenses out of your day job, you can leave all your profits in your trading account. This allows you to compound it. If you are trading a flat percentage, over time this means you will make more and more money trading.
When the money you are making trading dwarfs the money you make from your day job, your day job is a hindrance. That is the logical point at which it makes sense to drop it and trade fulltime.
7. You won’t make bad decisions out of desperation.
When you are down to your last $100 and rent is due, it is easy to be tempted to take wild gambles out of desperation. Your judgment is compromised, so you take unnatural risks. This only causes you to blow your bankroll faster—and it prevents you from learning how to trade profitably.
8. Your family needs stability.
Many traders have dependents looking to them for a stable financial future. If you have a family to take care of, it is only fair to them to hold onto your day job until you know you can provide a stable future through trading.
9. There are plenty of opportunities available to you right now—even with a day job.
Finally, there is one more really great reason to hold onto your day job, and that is opportunity! Binary options trading gives you access to a huge range of assets, and there is always something to trade. Because of this, you do not necessarily have to spend 19 hours a day glued to your screen. You can do other things, like work a day job, and still trade profitably on the side. Why give up that amazing opportunity when you do not have to?
So there you go—you now have 9 very good reasons not to quit your day job to trade binary options. None of this should discourage you in the slightest from trading. In fact, I hope you feel more encouraged than ever to trade, realizing that it is possible to balance both trading and a day job, and that doing so can actually help you achieve profitability faster. And if you are indeed going to trade professionally by all means learn why Nadex may be your best choice.
As to the notion that you “have to make a sacrifice” to get what you want in life—sometimes that sacrifice is not what you think. Maybe the sacrifice is not your day job, but the emotional need for your ego to do something dramatic to cut ties with your old life. Maybe sticking with your day job a while longer is that sacrifice.
Regardless, if you wait until you have a solid practical reason to quit your day job, you will end up a lot more profitable trading. In the short run, it might feel like a pain, but in the long run, you will end being a lot happier with your decision.