I am curious to know how professional traders manage their brokerage accounts vs living expense account.. How often due you withdrawal funds from trading account to pay for living expenses or do you keep accounts completely seperate??.. In my planning for fulltime trading I would have about a 78k stake... I am either thinking of leaving all 78k in my trading account and then withdrawing bi weekly as I need cash. or I was going to take like 20k put in checking account and 58k in trading account.... If I run out the 20k to pay for living expenses then I would reevaluate my trading and maybe get a real job again.
The problem is that a trader's income is very volatile but expenses are rather consistent. Even during the down months you are going to have bills to pay. So you don't want to blow your entire profit in the good months -- you need to save up to weather the drawdowns. When I first started trading my wife and I decided on a "salary" I was going to pay myself out of our portfolio. If over a year or two the trading profits didn't pay the salary, then it would be time to consider alternative employment. Fortunately the trading profits have been larger than the salary and I've been able to increase the salary. All the profits beyond the salary stay in the portfolio. For new traders I recommend keeping your expenses as low as possible. The larger the drawdown you can survive, the less stress you'll have when you are in a drawdown and the longer you'll be able to stay in the "game" and the more likely you will be to prosper long term. Trading is the hardest, most stressful way to make "easy" money. Remember what Louis Winthorpe III said: "Superbowl, World Series -- they don't know what pressure is."
I have a few different accounts that I move money into and out of. My trading account is kept at about $40k and whenever the profits get more than a few thousand, I wire the excess to bank account A. At the end of each month I transfer $3,000 to bank account B, which is my day to day checking account. 3 grand is my monthly 'salary' that I pay myself. If account A gets too big, I move funds into a brokerage account where I might put it into various kinds of funds or accounts that will earn some interest. If there is a sustained drawdown and there is no money in account A or the brokerage account, I'll pull my 3 grand salary out of my retirement savings or increase my personal debt. Either way, the $3k shows up in my day to day account every month. I also want to build up a seperate buffer account that will hold about a year's worth of living expenses.