Day Trading at Home – 10 Questions to see if it’s right for you
Depending on your line of work, your company may offer flexible work arrangements that permit you to work from home on a regular basis. Well day trading at home is a little different than working from home. In this article I will ask you 10 questions to determine if day trading from home is a good fit for you.
Bonus: Download free day trading ebook with over 10,000 words of trading strategies and techniques you can use to trade stocks, futures and Bitcoin!
You will need to answer these questions truthfully and if score less than 7 out of 10, you will need to rent office space.
#1 Do you have a home office or private work area?
Day trading requires you to focus. There are no if, ands, or buts about it. You can't use your dining room at night for family dinners and then think you are going to convert the dinner table into your day trading headquarters the following morning.
You need the privacy. If you are in an area of your home that is accessible to everyone without a door, this will not work. Do you think your 3-year old understands the concept of I see Daddy, I hear Daddy, there is no door blocking me from Daddy, but I can't walk over and talk to Daddy. Good luck with that one.
#2 Do you have access to a high speed internet?
I love it when I hear these guys say they are going down to the local Starbucks to trade. Really, will all of these Starbucks virtual traders please stand up.
You need high speed internet and preferably a direct LAN connection from your provider to your home. The stock market moves extremely fast and you will be downloading thousands of ticks daily to your machine and using your cell phone as a hot-spot on your deck is not a good idea. I've seen day traders' screens lock up as they are putting on trades because their connections are too slow. Do not let this happen to you.
#3 Do you have a big desk?
You are going to need a pretty big desk. Think about it, if you have 3 screens for day trading with an average screen of 20+ inches, your desk will need to be 4 feet in length at a minimum.
Having a decent size desk will allow you to comfortably place the screens next to each without making you feel cramped.
#4 Do you have a comfortable chair?
Depending on your trading style, you could be sitting for a few hours or up to 8+ hours per day. Day trading at home doesn't mean you should use your bar stool from the basement as your chair of choice. Since you will be sitting for long hours, your chair needs to provide the right amount of back support to prevent cramping.
When I first started day trading at home, I decided to use the same chair I had from my college dorm room, which at the time was about 8 years old. The cushion had all but disappeared and the upright locking feature was broken. Needless to say after a few weeks, I gave up my lucky chair.
#5 Do you have a fast desktop computer?
While I have made the argument on this blog that you can trade with only one monitor, you will still need a powerful desktop computer. When I say powerful, I am not suggesting you need to go spend thousands of dollars, but your day trading computer should have the ability to multitask between a dozen or so screens that are streaming data. Assuming you are using more than one monitor, you will also need multiple video cards so you can power all of those beautiful 20+ inch Samsung monitors.
#6 Will you only use your day trading computer for day trading?
While you may be day trading at home, this does not mean your home should have anything to do with your computer. When I say home, I mean neither you nor your family members should be using your computer for entertainment purposes. Do not allow your teenagers to visit their favorite file sharing site or your toddler to play on abcmouse.com after trading hours.
Imagine you are getting ready to place a huge trade and you keep getting a pop-up coupon on your screen. Or better, one of your loving family members has downloaded so many free applications that your system performance comes to a screeching halt.
I've been there; trust me it's no fun.
#7 Do you have a backup computer and an alternate means of accessing the web?
At any given time either your computer or internet connection could fail you. With more and more powerful storms hitting the US, you may lose your internet connection and or power for a few hours. To combat this make sure you have the following:
- Have an extra laptop handy. Doesn't have to be anything fancy, but just enough that you can finish up the trading day.
- Make sure the backup machine is fully charged. You may be stuck without power for a few hours.
- Have another internet service provider, in the event your provider has issues. Another option is to setup your phone as a hot spot; not an ideal solution, but it will work.
#8 Does your room have windows?
You need to make sure day trading at home does not begin to resemble a corporate environment where you feel like a developer trapped in an office basement. I'm not suggesting you should be sitting at your desk and day dreaming about the upcoming weekend as you look at squirrels, but being able to look out the window for a few rays can be a positive and uplifting experience.
#9 Can you follow a schedule when day trading at home?
Since we have covered the facilities portion of your day trading operation, now we need to get into what is required of you.
At work you always had a schedule, whether you wanted to admit it or not. No matter how flexible your boss, you were expected to work a set minimum number of hours during the day or week. Your day trading at home operation should be no different.
Have a set time every morning that you will be in your chair ready to start researching your trades for the day. Also, think about when you plan on taking lunch. Depending on how ambitious you are, you may be saying to yourself, "I'll just power through it". Wrong. You need to eat; it provides you much needed energy and also gives you a break from the trading day. I'm not suggesting you take a 2-hour lunch every day, but a 30-minute or 1-hour break will do you and your trading some good.
If you still don't care about your physical and mental health, check out my article - 9 Reasons Why I do not Trade During Lunch.
#10 Do you have your Family's support?
Now that I'm near the end of this article, it just hit me that I probably should have created a weighted scale for these questions.
While your family may not understand the details of your trading strategy, you will undoubtedly need their support. There is simply no way you will be able to pull this off without them.
In terms of day trading at home, they are a part of your business, simply because they are also at home. Will they respect your office boundaries and not constantly walk in and out of your space? Are they prepared to keep the rest of the house quiet, so you can focus on your trading activity?
So far we have assumed your family is supportive of your trading endeavors. What if they don't think trading is a real profession, or worse they don't believe you can pull it off. How will you feel as you walk past them in the morning as they are heading off to school or work and you are headed toward your day trading home office?
Could you handle the tension in the air? Will you still be able to approach each and every trading day with confidence?
I would love to say you will be able to pull it off against all odds, but not having the support of your family is simply too much, especially if you are occupying the same space during the trading day.
Were you able to answer yes to at least 7 of the 10 questions? Remember, if you had a no on question #10, then day trading at home is not for you.
When thinking of day trading at home remember it's more than just having the physical space and hardware required. There is also the fact you will be in your home and will need a way of separating your work from business.
While renting space may seem like it's not an option depending on your funds available, you will likely lose more from missed trading opportunities then the few hundred bucks required to rent an office. Far too often traders forget that distractions and loss of focus come at a cost to your trading.
I hope you found this article helpful. If you are thinking about day trading at home and are wondering if you can pull it off, try our day trading simulator. You can log in and start trading at anytime of the day and see how your family and friends respond. If you live by yourself, see if you can sit there with a high degree of focus for a few hours.
Once you have tried trading for a few days, go back and see if you can still answer yes to the 10 questions.
Good luck trading,
Day Trading at Home - Lars Plougmann