In Episode 13, Matt Zimberg, delves into the topic of what it takes to transition from a part time to full time futures trader.
Many traders get into futures trading to potentially generate a second source of income and end up going full time depending on their level of success. The following podcast episode breaks down what it takes to become a full time futures trader and whether it is right for you and your current situation.
There is a substantial risk of loss in futures trading. Past performance is not indicative of futures results.
Episode TranscriptRead Episode Transcript
Welcome to the Optimus Futures Podcast. A place to learn from an industry insider with over 20 years of experience in commodity futures and options. Gain insight to the newest technology, platforms risk management, trading philosophy and advice about the current state of the futures and options markets. For futures trading platforms, deep discount trading commissions, overnight margins and instructional videos. Feel free to visit our website at Optimusfutures.com.
Please remember that this matter should be viewed as a solicitation to trade trading futures and options involve substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. Optimus Futures LLC is not affiliated with, nor does it endorse any trading system, methodologies, newsletter or similar service. We urge you to conduct your own due diligence.
Now here’s your host. Founder and CEO of Optimus Futures, Matt Zimberg.
Hey guys this is Matt from Optimus Futures. Another episode so, when I think about the topics for those episodes I usually try to gather my inspirations from questions we get or things that I read online or on forums or and blogs and I see things that are pretty much always repetitive, right. So topics that are always being asked and they’ve been asked in different shapes and different forms and I see the answers and I also want to give my perspective on those things. So, one of the things that I see, one question is “can I be a full time trader?” or another question that I see asked “Should I be a part time trader or a full time trader or how do I progress from one to another?” So, this is basically the main topic today that I want to cover. Part time trading versus full time trading.
So if you want to become a full time trader just realize that it’s a progression. I don’t think somebody can walk into trading one day and say hey I’m a full time trader. I think its progress right. So it starts from trading maybe in the morning for some people then trading in the morning and then when they come back from work to trade the night session or maybe they get a break during work. If they have time to analyze things obviously trading has to be organized so you don’t just want to open your screen and start trading on hunches because that’s just borderline gambling.
But obviously you want to progress, right. So let’s talk about that for a minute. Let’s talk about how you move from one to another. So I’m going to tell you my personal opinion I think for 90 percent of the people should not be full time traders because it’s really, really hard. And the reason that I say that is because there’s nothing wrong with being a part time trader and finding the right time to do it. When you’re a part time trader it means that you have a job and you have a steady income which many times you need in this business because in the trading business there’s a lot of fluctuations in equity in income, it’s unanticipated, you can have bad months, good months.
So it definitely helps you psychologically knowing that you have a job and you have steady income when you become a full time trader. All that goes away. It’s done. Nobody’s going to write your check. Nobody is going to cover your bills. It’s all your skills and psychologically it’s very, very hard. So this is why I say you have to, if you were to go there you have to progress there. If you’re not gonna go there there’s nothing wrong with being a part time trader. I think that most of our customers are probably part time traders and small minority is a full time trader. And it’s like I said that’s absolutely fine.
So what are the things that people want to get into full time trading or want to engage in part time but consistently meaning that they have certain hours? They ask questions like “Can I make two hundred dollars a day? Can I make 500 dollars a day? Can I make fifty dollars a day?” And the answer is to this is well if this is the kind of questions you’re asking that maybe you need a second job because that’s an employee’s mentality. An employee is looking for consistent income throughout his career, right. He wants to progress wants to make X amount of dollars as he gets older he wants to make more and more. And there’s nothing wrong with that. But when you ask as a trader, “can I make a certain amount?” That means that you are not understanding trading as a business. Now any businessman can tell you if you own any type of business that you are just as good as your last sale, meaning that you know you have a product or you have a service and you always have to continuously promote it just like we do with Optimus Futures for futures trading. We’re a business, it doesn’t mean that our income is the same every month. We can make more than certain months and we can make less in certain months. It depends on the business, but nobody can guarantee you an x amount of dollars and that’s the nature of business. And when people say I understand trading is a business. Many times they don’t. Why? Because they think that there will be some sort of a daily consistency or monthly consistency. It doesn’t happen.
So, if you look, I always refer to money managers. Look at money managers look at what they do. Look at what the returns that they have. After a certain period of time of a year or five years of trading then you can if you have positive expectancy and you have positive returns you can then do an average of what you earn per month. But essentially nobody can guarantee that you can make X amount of dollars.
Markets are dynamic they change your trading method has to change with it. I’m not saying that you always have to do an overall on your system, but clearly due to volatility sometimes it can take more or less and so forth. So it’s important to know those variables it’s important for me to be honest about it because you don’t want to come into trading or into any business with not having the right frame of mind if you understand what you’re going to encounter and I think this is my job to be honest, about what you’re going to encounter. I think you will treat things differently, right. So they say the customer is always right, but I always say the customer is always right if he has all the right input. So I want you to be right and hope to give you, you know the right input.
Let’s move forward a little bit and talk about how you progress being dedicated to trading and again from part time to full time. So, one of the things that you have to think is about your schedule. Okay. And you have to look at what changes you have to make to accommodate your trading. So basically let’s say that you have let’s say that you work let’s say from 8:00 in the morning until 5:00 in the afternoon and it takes you an hour to eat lunch and to have dinner. And so now you have maybe from eight to 11 then you have to think about him are going to be tired during those times. Am I not. How much should I trade. How much analysis should I prepare a day before after I’m done training. So you really have to look at your schedule. I think for many people you know depending on the time region. So for example somebody that lives on the West Coast can dedicate a little bit more time in the morning because it’s a little bit earlier than somebody who lives on the East Coast than he can. Obviously, it’s a little bit harder for him because it’s with the markets and the same goes to the Midwest. But the bottom line is this look at your schedule dedicate the time allocate two hours, three hours of whatever time there is and always during those hours be beside the market because this is the only way to learn and be dedicated and one day hopefully move to a full time and if not you within the timeframe you will know exactly how the markets behave. Obviously it’s an on going experience, but I think during the certain markets that could be always exceptions I should say. But the goal is to see how the market’s behavior in those hours and what markets you should trade from the first place. You obviously want you always want to be attracted to liquidity. The other time that you have to dedicate is basically time for analysis. So now you understand. Let’s review what we just said so far, so we understand that there’s no consistent income right. And you have to be good at what you do and it can fluctuate, then you have to decide on the hours that you trade. Now you have to decide on the time that you have for analysis.
[00:08:52] So trading is not just about the trading itself what you do with the hours that you don’t trade and the analysis that you’ll put in will be reflected in the performance of your trading in my personal opinion. So again it’s not going to happen in day one that you’re going to become good all of a sudden. It’s a lot of training a lot of analysis a lot of afterthought. But you definitely need the time to analyze the markets when you don’t trade because what you want to do when you trade is be prepared for for the levels that you prepared ahead of time. This is where time management becomes very, very crucial. You can’t just go at it in a way that it’s kind of random because if you’re going to be a full time or a part time trader time management will encompass everything that you do on a day to day basis because it becomes a second, could potentially become a second source of income for you, potentially I should say and i’m not guaranteeing that it’s going to happen. I can’t guarantee it. But this is what you want. This is where you’re striving. So time management is again is extremely important. Every day you have to allocate certain times and what will happen is that you will end up saying no to a lot of things that you usually want to do which is watching your favorite sports show or any other TV show and so forth.
[00:09:19] Choose the markets you wish to trade. Okay that is extremely important. So you cannot trade all the markets if you’re working within a certain time. So there are markets that will be less liquid there will be markets that are more liquid again try to go after small number of markets. Just have them, learn them. See how they behave and learn their correlations. And I know that there are people there who trade 15 and 20 markets. You can do it. And some people do. But what happens over time that you learn about correlations so when you trade for example Canadian dollar you can learn how it’s whether it’s connected to resources like crude and gold. Same thing for the Australian then if you trade bonds you see how they’re related to the E-mini S&P, but you get the big picture here. You choose a small number of contracts that you want to trade because at the end of the day even those small number of contracts correlates to everything else so you want to look at all the markets as many as you can. The liquid markets, but you want to focus on a small number of markets. Now I’m going back to what I said before that you will have to say no to a lot of things. Now if you notice many of the things that are mentioned here don’t just apply to trading.
[00:11:48] So they apply to everything that you do in life. Time management is extremely important. Understanding when you want to do the analysis, you know, this is people have business to do the same thing. So just remember those are universal laws that apply to pretty much success in my opinion. And a lot of the times you will have to say no to things no to barbecue with friends, no to movies because it becomes again a source of your income and trading is extremely exhausting mentally because to sit in front of the screen, always do the analysis; it’s hard. It’s very challenging. So obviously the inclination is at times to run away from it but essentially you have to do the analysis you have to put in the time it’s your capital in the end of the day. Consistency you know I can’t tell you enough about consistency everything that I said here you know it has to be consistent. It has to become habitual. So it’s part of your DNA it’s part of your nature and you do it all the time. So when I in the beginning of this podcast they said that the one thing is that to move from part time to full time it’s a question of progress.
[00:12:54] It’s not a choice that you have. It has to be done in small incremental steps. Don’t jump into trading you know with complete enthusiasm and then walk out of trading with complete disappointment. The key is not to overwhelm yourself in the first years of trading rather. Approach it in a very, very cold manner just like you would approach everything else. Back in the day a good friend of mine a colleague, he said to me that he would rather have an army guy learn trading and manage his capital than a scientist or a programmer. No disrespect to scientists to programmers, but you know I know exactly what he was talking about he was talking about discipline. It’s priceless. If you have discipline it’s absolutely priceless. I’ve been reading books for the last 20 years about discipline and I still do it and I still try to perfect that nobody can come and say I’m disciplined there’s always distractions there’s always things that you have to do. We live in the world of a lot of information that’s coming in different ways. So part of your time management is really dedicating it to yourself. Time management is such a big thing. It is a choice of how you spend your time what you read what you do and essentially again you know make sure that you specialize you can’t know everything. I’m going to end it on this note again. You know we’ve reviewed about the progress that you have to do as a trader income, time for analysis, time zone that you need to trade, the markets that you want to focus on.
[00:14:40] If you have any questions you’re more than welcome to go to our community.optimusfutures.com site and ask me any questions that you want over there. I’ll try and answer it there. It’s more of a technical forum, but if you need to discuss anything related to trading platforms or technology or anything else, of course I’d love to earn your business. If you want to talk about a trading account with Optimus Futures email me, Matt@optimusfutures.com. You can also call us if you’re in North America. It’s 1-800-771-6748. If you are outside of the United States and you want to use our local number it’s 561-367-8686. That’s it until next time. See you guys.
Thank you for listening to the optimist futures podcast. Subscribe to our podcast on iTunes Sound Cloud and Google Play. You can also find us on YouTube Facebook Twitter and Google Plus all under the username Optimus features if you have any questions feel free to send us an email to support our Optimus futures dot com or give us a call directly at 561-367-86864. Toll free at 1-800-771-6748. Once again thank you for listening to the Optimus Futures Podcast.
By please remember that this matter should be viewed as a solicitation that trade trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition Optimus Futures LLC is not affiliated with nor does it endorse any trading system methodologies newsletter or similar service. We urge you to conduct your own due diligence.