Career Transition

I am writing this post to gather information about a career transition into trading. Some background info - I am young thirties with an MBA. I am a small business owner – and the salary that I will generate for myself this year from the business will be above 80K. (The business is an education based business and is open during the week starting at 3pm in the afternoon – I have my mornings and early afternoons free. We are also open on Saturday.)

Over the last two years I developed an interest in Trading, (through reading and research) and I feel it is turning into a passion. As far as the big firms I know that opportunity has sailed due to my age and lack of trading experience. I am trying to find a way to incorporate trading into my life via a Prop Firm and wonder if there is anyone out there who has had success in a similar situation. I understand that it could take a significant amount of time trading before I see a dollar so I don’t want to jump ship from my current financial situation. But I feel like if I don’t try my hand at educating myself and pursuing trading I might grow to regret it – and I feel I have enough free time and drive to pursue this as a possible career.

I have met with a few firms, and one actually said that they would allow me to trade on my schedule. But at the end of the day if I burn out it is my $5,000 and commissions that will be lost. I live outside of NYC and wondering are there any Prop firms that trade the European Markets either in NY or NJ? If it is a company that trades the NYSE - is training remotely a valid option – or does that further magnify the chance of not succeeding? Also if anyone has any advice or input to add regarding this situation it would be greatly appreciated. Thanks

 

I am not sure how much you want to trade with but, if you have a good amount, then I would try trading on your own. But, if you want some coaching and guidance and if you need more $ to trade with then a prop firm would probably be good.
I was actually doing a little research on prop firms because I was considering trading for one for the experience so that this way I can more comfortable with other strategies besides scalping. The only one I know of in the city is SMB Capital but I don't think that they trade the European markets so...

 

Can someone tell me what the hell a prop firm is. Why on Earth would you want to start a trading business any way except on your own?

 

I've been working on changing my career to trading. I'd say read as many books as you can, fundamental analysis can be good to know but I'd say focus on technicals, more important for a trader IMHO. I hear that prop firms teach you some BS scalping technique using just Level II, which is useless...candlesticks charts please, thanks.

Trade on a simulator first and make a journal with all trading details with reasons for winning and even more importantly, losing.

Prestige Capital, LLC has a great simulator of their Blackwood Pro software. They are a prop firm that also offers remote trading and 20-1 margin and a 5k minimum opening deposit. Honestly I would use cash only until you get experience...the cool thing is, you get around the BS pattern daytrading rule with prop firms, I wish I started out that way...or maybe not I probably would have maxed out my margin...and losses. I did try the Blackwood simulator though, really liked it.

I just opened an E-mini futures account with Global Futures after sim trading their GS Trader software. They have really low intraday margins, you can start out with almost nothing and make decent money if you play it right.

I believe that the E-mini S & P is much better than equities for daytrading, it has so many advantages over equity trading, especially for someone who is undercapitalized like myself. No pattern daytrading rule, no uptick shorting rule, low initial margin, no need for scanning etc. Just have to watch out for the occasional spikey, nasty days that are hard to trade.

Trading is one of, if not THE hardest endeavors of my life. I've lost some money, but gained so much valuable knowledge and experience in these last 8 months and I will never give up, I know that if trading came easy, it wouldn't be worthwhile and as hard as it's been I love it and thrive on it, I think that's important, have to love what you're doing. I know the reasons for my mistakes, mainly overtrading, trading too large of size, undercapitalization, getting overconfident after a strong winning streak, and money/trade management.

Now my plan is to trade 1 contract per trade of the ES and as I build capital, trade using 1/3 of my margin. Margin = 500./contract so $1500. to trade 1 contract, $3000. to trade 2, etc. There's alot more to my plan but that's just part of the money/trade management, I think it should work pretty well to build capital. Then I'll use equities to swing and position trade later.

Just thought I'd give you my 2 cents being that we're in a similar boat, looking to fulfill the dream of leaving our jobs and trading for a living, good luck to you!

 

http://www.elitetrader.com/vb/search.php?s=

There use the search button on ET before posting shit that's been asked millions of times.

 

trading looks easy; you just sit there, watch a monitor and occassionally push a button, but the fact is you can feel like taking a nap after the market closes. with all the research and study, set-ups, trading and running your biz, you run the risk of getting really burnt out.

 

Thanks for the initial responses – I appreciate it.

A few valid points and concerns were brought up by different individuals, which I would like to discuss.

MTI_44 – Thanks for the post. Is SMB Capital a firm that you are possibly considering? I have visited their site it is informative. Do they have a different approach than most other Prop firms?

Trade Warrior310 – Like yourself I have purchased and read a great deal on trading, technical analysis, history of Wall Street and speculation etc. I do not know much about Prestige LLC? Do you feel that they are a strong firm to possibly enter into a relationship with? Any info on the firm would be greatly appreciated.

QQQBall – The Burn out portion of trading and running a business at the same time is definitely a concern. The good thing is that my business currently provides for my mortgage, car, retirement etc…and I have a wife but no kids – so I do not have the added pressure of being a breadwinner for a large family. Do you think it is possible to trade the market from 9:30am-1:30pm on a daily basis. With out any changes to my current work schedule I would only be able to trade the close initially only two days a week. This would obviously change as things progressed – but have you had any experience with traders who started trading the market short hours each week (like9:30am-1:30pm) just not the entire day.

I appreciated everyone’s initial responses and I look forward to any additional posts.

Thanks

 

i think swing trading SMALL positions isnt a bad way to start, you get all the trading issues, but in kinda slow motion, and you can still work FT. the market isnt moving as fast as it has in the past, but in like 2000, the market could really zoom intraday & i think thats a tough way to learn. you could maybe trade opening range methodology, like a mark fisher ACD method. whatever you trade is gonna be a based upon who you are, what you see and how you develop an edge. the Qs dont move all that fast, no uptick, liquid, you wont get ruined overnight, etc., that might b a good place to look?

whatever suits your trading style. i doubt that wherever you start out for is where you will end up.

 

You are where I was 2 years ago. We almost have the same background personally and professionally. My advice to you is that if you are serious about trading as a career, it is something that you have to do full-time - not part-tme. Trading for a living is not easy and takes a lot of hard work in the beginning to become successful. You will have to dedicate at least 9 hrs a day to trading and research. But if you becomes successful the upside is unlimited.

rjv27

 

QQQBall - Thanks for the reply. I have been meaning to pick up the Mark Fisher book "The Logical Trader" - so after your recommendation and how yo presented it I ordered a copy from Amazon. I look forward to receiving it.

RJV27 - Is was nice to hear of someone who has a similar background and experiences. When you started trading to you leave a business or employment and go full time? And if you did how long did you prepare for this transition (training, developing a system etc..)
Also did you go Prop or do you trade for yourself and after two years how is it going? Thanks again for responding.