Daytrading in Retirement

In previous posts I have spoken about the fact that the majority of retirees, particularly those who are younger, will either need, or want, to have a way to generate additional income to supplement their retirement. This can range from regular employment in your newly adopted country (dependent on foreign employment rules, which vary widely) to running your own business. But having enough capital, and an idea or concept, to open your own business opens up a number of avenues that many will find especially appealing. It gives you control over your own destiny, may offer you the chance to work part-time (or at least set your own hours), can involve employing locals (which will ingratiate you to your newly adopted community), and can keep you busy and challenged (but remember the idea is to enjoy…so not TOO busy).

The business I want to address today is daytrading. I happen to daytrade for a living at the moment, although if needed I can also venture back into the IT consulting I have done over most of the last 20 years. Daytrading, if done right, offers not only a consistent, and sometimes lucrative income, but it is also an extremely flexible business.

In order to maintain a consistent income stream from daytrading you need a plan, and a system, that works, both in good times and in bad. There are a ton of systems out there, but I follow one from a very experienced, but conservative, site called “High Chart Patterns” (see the link under “Other Sites of Interest” in the column on the right). This system, explained in much more detail and with much more knowledge on the HCP site, seeks to detect clean chart patterns that deliver good risk/reward trades, and teaches subscribers how to read intraday chart patterns that determine what to do when a stock approaches an entry price. The system promotes safety first, using .3% - .5% stops and taking money off the table at regular intervals to bank profits with consistency. Traders who follow this system are encouraged to play it safe, and that is one of the hardest things for a daytrader to grasp. Many daytraders are more gambler than trader, but if you want to make trading your steady income source you need to conserve capital in order to take advantage of winning trades when they appear.

If you have a system that you can implement with consistency, you are on track to finding a great business that you can run from anywhere. This is the flexibility of trading. All you need is a good internet connection, and a decent computer. While it helps to have a powerful computer and 2-3 monitors to watch charts, news, and tickers, I have been very successful trading with just a laptop. And if you can do that, you can trade from anywhere in the world that offers an internet connection….including wireless hotspots. I have traded in coffee shops, at the library, in the town park, at the beach, in airports, and any other place I can find a hotspot.

The other aspects of trading flexibility are just as interesting. For one, you can trade on days you want to, and not on days you don’t. You can trade every day, or a few days a week, or take a few weeks off whenever you want to vacation. If trades aren’t happening, like the current market situation, you can take a few days/weeks away from work.  You can decide to trade six months a year, and travel the remaining six months. As long as you can achieve your income needs in the appropriate trading timeframe, you are free to determine how much time you spend at your business.

For another, while trading NYSE and NASDAQ stocks (or stocks on foreign exchanges) is limited basically to times the markets are open (which can be a problem if you’re many time zones away from the market you’re trading), trading foreign currencies on FOREX takes place 24 hours a day. The logistics are a bit complex, and beyond the scope of this post, and you have to know what times to trade specific currency pairs, but essentially FOREX gives you ultimate trading flexibility.

Trading isn’t for everybody. There are also lots of other ways to generate income. But if it works for you, it can offer amazing flexibility that allows you to trade on your own schedule, and from virtually anywhere in the world you happen to be.