I started out with $2300 in '99 and got my account up to 68k in 6 months before I blew it up (I got out when I was down to 8k). I had a similar experience in 2003. Started out with 15k and got the account to slightly over 100k in 4 months before I blew it up (got out with slightly less than my original 15k). Primarily I had been trading options (equities). I had more losses than wins on a trade by trade basis, made bigger trades on smaller risk, smaller trades on bigger risk, but the wins tended to be 10-20 x investment, 1:4 win ratio, so the averages got me higher. I think part of my problem is discipline, my other problem is that I tend to generate great ideas for trades, but can't really 'read the tape': Both times sector and market downturns accompanied the explosions coming out of my account and I didn't see them. SO: I am ready to give this a last shot, but I want to do it right. I think I need some experience. I am looking at getting on as a proprietary trader in NYC somewhere, either in equities or in Forex. Background: B2B technology sales (I really hate it, but it makes 150k a year), BA Economics, BA Romance languages from a top 25 school, fluent in French and Italian, not such a good academic record (was busy blowing up my account in '99 and working 40 hour weeks in a regular job). I am 32 and can afford to live on zero cash for a while (but I wouldn't have enough to not get paid for a year AND have enough to start trading for myself after not having been paid for a year). I have heard the term 'prop shop' and that seems to have negative connotations to a lot of people. Where should I be looking: what kind of jobs/firms should I be looking for to get discipline and learn to read the tape? I have seen ads from FXCM and Assent LLC her in NYC for proprietary trading jobs. I know how a proprietary trader works (conceptually) in a buldge bracket firm but not at these smaller ones. I would appreciate any advice from you guys who have worked in firms about a path. Obviously working for myself at some point down the road is ideal, but If I can get a career path into proprietary trading at one of the larger firms that pays more than anyone could possibly be worth, I couldn't complain about the baldness and grey hair. Thanks in advance and I look forward to reading your posts.
Either your initial positions are far too large for your account size, or you have a habit of averaging down? If you are starting out with relatively small account size but have ability to generate very large profits in short periods of time, you might be better off periodically sweeping out a certain percentage of your profits, to let out some steam so to speak.
Don't see the problem here. I've been an engineer for 20 years and I barely crack $100k. So I'd say you are doing very well. I think you should find some kind of enjoyment and challenge in your current job. To throw that away for trading and the good ole "more than 90% fail...", which is better stated as "only about 2% make enough trading to live on..." is kinda dumb. You got a sure-thing $150K now. Just modify your approach to multi-week/multi-month duration swing trades with saved money and you will be home free in 10 years. There's plenty of challenges to correctly run that sort of trading operation. But the chances of making it work are MUCH greater, IMHO, than short term trading. Even after two blowups, what's the chance of your trading consistently making $150K without too much leverage (if your acount base is less than about $500K that is)? Small, I'd say. Good luck. C
If you are getting fired from your b2b job $150k , yes you can try out trading. If you are quiting from your $150k b2b job to trade, that would not be a wise choice. most traders have to give out their left nuts everyday to make $150k a year.
I'm going to offer my 2 cents, although I have a feeling some people are going to strongly disagree with me.... From what you've said I would honestly say don't worry about a prop firm. The few that I've worked at taught people to be mediocre traders at best, and one of them seriously ripped off most of their clients before they shut down. Obviously these were not the big, reputable ones. Most of these firms were latched on to stale trading strategies that could just eke out profits. Not to mention the environment SUCKS (everyone is constantly yelling at each other, blaming everyone but themselves and is FAR too stressful). It sounds more like you just need to re-examine your strategy. If you got the returns you say you did without putting any more money in the account, then all it is (to me) is a case of risk management and/or discipline. If you got the returns you did by adding money to your account from your job, then I would seriously consider doing the same thing with lower risk investments (bonds or something) and setting up only a small trading account. If that's a pure system that made that kind of money maybe you need to look into getting it black boxed. Profitability like that could get sold to someone, if you're lucky, but you'd have to prove it first. Anyways, my vote is that you simply re-examine that strategy and fill the holes, sounds like you've got a serious leak somewhere in an otherwise profitable strategy. If it's your discipline, then you've got to tattoo your rules to your forehead or whatever necessary to get the job done. I believe with discipline, no measure is too far if it gets the job done. Again, just my 2 cents.... -The New Guy
Seems like you have an itch in your ass and need the market to kick *hard* for you 1 more time. Guess you haven't learned shit yet. Stick to what you know.
Look at those years on a 10 yr chart of the index's There's no marketable system here.. just buying SPY calls with every penny in ones account would have made one a fortune very quickly - no edge/strategy/exits/stops/risk management required. Follwed by the inevitable blow-up... I have been there as well.. Until you ride that rollercoaster, it's hard to truely appreciate the discipline required to be continueosly profitable. I have a close friend that blew up his 20k account before he finaly began to appreciate all the "risk management" lecturing I kept warning him...
Sounds like you're in it just for the excitement and not for the money. I'm not sure if it's good for the motivation or not. Happy trading
It still takes a strategy, albiet even if it's a long only strategy at a very lucky time. I agree about risk management tho, I don't believe it's something you can truly teach/tell someone (well, MOST of the time), but it's definately something you can learn the hard way.... -The New Guy