I had spent over 8 years on day trading and finally developed computer software having an edge, out of sample back tested on 5 years minute by minute data. That's good news for me, the bad news is I am out of trading capital. In the last 8 years I lived on the money I made from part time trading while I was a computer programmer. I have been looking for a job for a while, but the job market is tight, plus my computer skill is out date. I know there are some experienced traders here. Has anyone had similar experience ? Spending many years searching for an edge, but out of money when finally "got it" ? If so how did you find money and rise up again ? I wish I were a pretty women so I could sell my body for a while to raise money. But ... Thanks for sharing your experience with me. If you want to call me a loser, I'll say "yes I am and thanks for reminding me."
You have demonstrated a dedication to trading. Do you have the ability to sit in front of a computer and trade daily? Trading is no different than any business and it requires work and study. I have been full time for 10 years, and before that I traded part time another 10years. If you want to make a living at it and can't get hired by a firm then I question your program, and what its value. If it makes money you or a firm would trade it today. I have been in negative numbers in the process of learning this business, and I am getting the payback now. If you have something that works step up to the next risk level and trade it yourself. If it is gold you can probably find a firm, or better yet it makes you money and you keep it all.
The question here is how to find money. You can find money right now by cutting those expenses: Car,, Cancel the cable bill (projected to be average household $200 a month by 2020) netflix is $8 bucks/month I think,, Thermostat bill,, Food bill (if you eat out, breakfast only = cheapest, or just go paleo),, Average home size has doubled since 1970 (1400 sq ft avg then), means a lot of maintenance if you are just one person, move. Find $500 a month in savings and there is $6,000 per year, depending on your taste for risk, start after 1 year or 3. Work smarter not harder.
More about my system: I made some data discoveries by exploring over 10 years minute-by-minute data. I first found out that the system can predict the intraday price ranges (on average) , that gives me an edge on where to cut loss. Further the system can predict the market direction (with 55% accuracy), that gives me another edge. I tested SP500 over 5 years data (out of sample, not using any prior testing date data), the annual return is about 29%, with total return of 270%, while in the same period, SP500 stayed almost flat. encouraged by this result, I applied the same parameters (cut loss percentage, market directions, etc.) without any changes to Russell 2000 in slightly different period, but still a 5 year period, the system got even better results, 34% annual return. After this I knew I was onto something. The maximum draw down of my system is about 8%. If I want to make a living from this system, I'll need $400k capital, which I had before I worked out my system. Now I don't even have $10k. Without 2 years actual trading records, no firms will even consider using my system. I have been cutting costs, no dining out, no new cloths, no health insurance for many years. Now I'll have to sell my house to cut costs further, but at a huge loss, I bought at $400k, now worth $330k, but I'll get some money out of selling. I am trying to get a computer job now. After a month, I got 3 phone interviews, and one onsite interview in several days. A small start-up is interested in hiring me at half of the market price. While I developed my system, I used data-mining, machine learning, etc., those things are somehow in demand. Considering that I was out of the job market for 8 years, I am grateful for this opportunity. I had a PhD degree in applied math from an Ivy League school, maybe that can sell a little bit. But in this environment, if you are not hands-on and can get things done quick and well, no one cares what degrees or experiences you had before, which is also fair.
You had $400K. You spent 8 years working on a trading system. From your tale of woe, it seems you weren't earning any money during the research & development phase, so why live such an expensive lifestyle ($50K/year)? I realize the answer to this question is meaningless, but your story doesn't make sense.
If I wrote every detail, it might become a novel. I actually grew 7k to over 400k in a period of 7 years. That gave me the confidence to quit my job. During the first year of my full time, my money doubled to 800k. But I got over confident and lost half of my capital on 3 biotech phase III results, and I was down to 400k again. From there I began to search for a consistent way and I studied TA. Without data support, I couldn't convince myself, so i bought data and started to write program to analyze those data. The whole journey was 8 years, but the actual time of developing system was less than that. But without first hand experiences, I couldn't have developed it. I didn't say I spent 50K a year all by myself. I need to feed some other people. All traders live alone ? No kids ? No wives ? You pay $2500 on housing, average $500 on all expenses you can't get away with (car related, utilities related, etc.), a few hundreds on food, what you have left ? Looking back, I was too slow to cut expense, I always felt I almost got it. But those were allusions without evidence. From now on, everything have to be facts based, meaning supported by data. I have no one to blame but myself. I was just curious if anyone had similar experience. It doesn't have to make sense to everyone.