Day trading and investing in the stock market have become popular approaches for most people in the United States and all over the world. While the volume of trades has been rising over the years, it exploded during the Covid-19 pandemic when most assets surged.
Day trading is popular for several reasons. It is an easy way to make money while the trading cost has dropped sharply following the introduction of commission-free companies like Robinhood and WeBull. Also, people are now more knowledgeable about trading, thanks to the available information.
This article will focus on people who have full-time jobs and whether they should actively day trade when working. We will also explain some alternatives to consider if you have a 9-5 job.
Day trading with a 9-5 job
It is possible to trade when you have a full-time job for a number of reasons. First, all companies in the industry have created quality mobile applications that enable people to trade at all places. As a result, it is possible to work in your job while taking some time to day trade.
Second, it is possible to trade on a 24-7 basis. The forex market is open for 24 hours every Monday to Friday. As such, if you have a 9-5 job, you can decide to trade for a few hours after work. Cryptocurrencies are available on a 24/7 basis while Robinhood has introduced 24/5 stock trades.
Third, some trading strategies make it easy to grow your money without actively day trading. For example, copy trading is an approach where you copy trades from other experienced traders. This tool is provided by a few brokerage companies like OctaFx and eToro.
You can also use algorithmic trading, where your robots or expert advisors will do the work for you. While this is a good approach, it has its risks and should only be used after doing a lot of testing.
In addition, a strategy like swing trading does not require you to actively day trade. Instead, you can open trades, set the required stop-loss and take-profit and then wait for it to work out.
You can also decide to be a position trader where you initiate trades and hold them for a few months. Some investors like Warren Buffett and Bill Ackman spend months without implementing a new investment.
Further, if you are a stock trader, you can decide to focus on the pre-market and extended hours.
The pre-market session starts at around 4 AM ET and runs until the regular session starts at 9. Extended hours, on the other hand, continue after the regular session ends.
Reasons to not day trade at work
A common mistake that many people make is to day trade when they are at work. For some people, this approach works quite well. However, in our experience, it is not an ideal approach for several reasons.
Proper day trading requires time and concentration
Successful day trading requires a lot of work, concentration, and dedication. Most full-time day traders spend their days studying the market, weighing their risk-reward ratios, and initiating trades. Scalpers implement tens and even hundreds of trades every day.
It is quite difficult to do all this when you have a full-time job, especially when your goal is to implement several trades per day. Doing this is usually not all that possible because of the many things that you do at work.
Productivity at work
The other reason you may want to avoid day trading when at work is your level of productivity. As an employee, your main goal is to work and achieve the goals set by the management team. For example, if you are a real estate sales agent, you want to bring in as many sales as possible.
You need to do several things to achieve this productivity at work. For example, you want to concentrate and work hard towards achieving the objectives. You also want to be cheerful at work.
Day trading at work can have an impact on your productivity, especially when things are not going on well. A big loss can lead you to have a bad day, which will impact how you interact with your clients and colleagues.
Additionally, you should avoid trading at work because of your mental wellbeing. Most successful day traders are those who have good mental clarity. If you are stressed or depressed, there are chances that you will not be successful in day trading.
There are several consequences for this. First, mental fatigue can lead to steep losses, which will lead to more challenges like stress and depression. Second, it can lead to low productivity in the workplace, which can see you fired.
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Further, mental issues can damage your relationship with your fellow workers and clients. It can also have an impact on your family members. Therefore, you should focus on day trading when you are at home.
Trading analysis is needed
The other reason you should avoid trading when you are at work is that excellent day traders do a lot of research.
Before you open your trades, you should do several things like technical and fundamental analysis. You should also conduct sentimental and price action analysis. Each of these parts requires a lot of work.
As such, it might sometimes be impossible to do all this research when you have a full-time job. For example, if you are a doctor, nurse, banker, or a real estate agent, it might be impossible to do this analysis and still focus on your work.
It might be illegal
The final reason you might want to avoid trading at work is that it might be against your workplace rules.
For example, if you are trading using your organization’s computer, it might be illegal and lead to disciplinary actions by the management.
In this article, we have explained why it is possible to trade when you are working. While it is possible to become profitable, there are many risks involved.
Therefore, instead of trading at work, we recommend that you focus on trading when you are at home. For example, you can focus on trading for about two hours every day after work.