Quitting a job to become a full-time forex trader

My aspiration is to become a full-time trader in the future, if possible in 3 years time. Leaving job security for another profession that is full of risk and emotional trauma is not an easy thing to do. In addition, one must be prepared to accept loss of income when you hit a bad trading patch. A loss of income would result in a change in lifestyle as you obviously can't continue the same lavish lifestyle anymore.

In this post, I shall examine the financial concerns if I quitted my job and become a full-time trader.

Minimum capitalization
First and foremost, the first thing that came to my mind is if I were to quit my job and become a full-time trader, I would reasonably expect my new profession to bring in at least the same level of income as my previous job. That's what most people would expect when they job-hopped. Let's do some simple calculations with the following assumptions
i) Assuming that I am earning USD$4000 per month and USD$48000 a year (exclusive of bonus)
ii) For a single trade, I am gunning a single standard lot for a 35pips profit target with a 35pips stop loss.
iii) Assume 1pip gain per standard lot trade is equivalent to USD$10.
iv) For risk management, the maximum loss for each single trade should consist only 1% of my trading capital.

Firstly, let's see how many profitable trades per month i need in order to achieve USD$4000. We do not assume any loss trades in this calculations.
Minimum profitable trades per month = 4000/(35*10) = 11.4 trades per month
This will mean that I only need to have at least 3 profitable trades per week.
Next let's look at capitalization. The minimum capitalization I need would be
= dollar loss per trade/1% = 350/0.01=USD$35,000

Therefore, in order to achieve maintain my income stream, I need to execute 3 trades (each 1 standard lot) per week and have a minimum trading capital of USD$35,000. On the other hand, I can achieve my target of income stream with less number of trades per month by increasing my lot sizes to 2 or 3. However, my trading capital will have to increase since I am risking more dollars per trade by simply increasing my lot sizes.

What happens if I do not have any income stream from trading
If the above happens, what am I going to live on? Definitely before trading full-time, I need to prepare enough cash reserves so as to tide me over my daily life. But for how long should this cash reserves sustain? Let's say I put it at 2 years (This is a very optimisitic outlook).

Assuming that an income of USD$4000 per month is able to handle all my bills and daily expenses for the next 2 years (no consideration for inflation). That means I need to have a minimum cash reserves of USD$96,000 (4000*12*2).

Conclusion
With the above calculations in mind, the total amount of capital that I require to become a full-time trader is USD$131,000. This amount is considered quite big and to accumulate such an amount in 3 years is extremely difficult given a USD$4000 job. I sincerely hope that anyone who wants to become a full-time trader should at least consider the above 2 financial points.

Arriving at such a high figure do dampen my spirits a bit, but I forgot one thing! I am trading currently (although with a very small amount). But if I am able to achieve consistent results and grow my trading capital slowly, perhaps I can achieve the required capital solely from trading part-time while still holding a full-time job. Of course, it is easier said than done but at least I have not lost hope yet. :)