I don't plan on quitting my job for as long as it takes me to become proficient and profitable in trading. And yes, I guess you can call trading more of a hobby than a career (at this point). But once I learn the ropes, I'd like to turn this hobby into a career. As long as I don't quit my job, money won't be an issue.
Very few people give out money-making advice just for fun... especially to potential competitors. I highly doubt you'll find someone here willing (or perhaps even able) to do so. And I, personally, am highly, highly skeptical that the vast, vast majority of "books" out there has any real value. You can certainly read it in order to learn the terminology, and learn the thought process + toolkit others bring to the process... but no one is going to teach you how to actually be successful at this. I will say one thing... as an engineer, you should be well suited for thinking systematically. I'm biased here, but I think you should skip paper-trading and get a backtesting engine, and start playing with ideas. That will immediately give you an advantage over the thousands of other wanna-bes unable to do so. And always keep in mind that at the end of the day, even the best, professional fund managers who have devoted their careers to doing this each and every day average little more than 20%-40% in returns every year... and the great majority of fund managers will do far less than even that. So, for the sake of argument, let's say you are one of "the best" at this... now figure out whether 20%-40% of your risk capital (minus 39% in marginal tax payments) is really worth your effort, or whether there are more (financially) productive ways to spend your time.
I think Interactive Brokers is cheaper in commissions, I was going to go with them. Also, when you tell me to chart those items, do you mean chart the daily's by hand? Or do you mean the 30-min charts for all of them? Can't I just look at the history of the symbols and go through bar by bar? So your advice is: - learn markets that correlate with each other by charting them bar by bar - identify these correlation to predict future price movements Is that correct? I'm willing to put in the time and effort to do it if I understand you correctly.
Your post was like reality slapping me in the face. I'm gonna do my best and see how I fare in swing trading (while keeping my day job). If after a few years I fail...well I'll go back to being miserable.
You'll quickly become miserable, trading. Then you'll be like: "F... this. 40 hrs, a steady pay check... and not having to turn into a fat slob in front of my computer.... thank god I quit trading." It'll happen. Soon enough. Within 1 to 5 years.
Reality is always a good thing, for anyone. I'm not making *any* predictions about your ability to succeed or fail... just trying to lay the facts out there.
Trading is a negative sum game, and therefore the vast majority would in principle lose on average. Lack of knowlege may hurt, but knowing what is in books does not necessarily lead to profits and may even lead to losses. I would pay attention to this, because in any other field where you sell time/expertise, knowing more and working more would increase income. It is not the case in trading. A trader is paid by assuming a postion which is risky as viewed by the other side, and is profitable when viewed against the future facts. In essense, a trader is paid for risk that was assumed and that on average does not exist. Who is profitable/ who should you listen to: I would make a short list of members who make opinions about trading instruments on ET. I would analysis their records. I would short list the rare few (if any). I would then propose to make a deal so that they show me what they know. I believe that ET is a place of average joes, who may think that average joe is someone else. I would keep in mind that opinions should be judged with future price, and that only future price charts counts. There are those who post in according with hindisght, and if one does not pause and ask the question, they may pass as experts because what they say is in agreement with the past and with the reader might think at the moment of the reading. Since the posts are rarely tested against the future, the experts may pass for idiots and the idiots may pass for experts. PS: I did not have time to edit. I am in a hurry.
do the work mentioned on page 4 and listen to yourself and the market...thats the shortcut..going thru several vendors and gleaning 6 or 7 useful tidbits out of 20 or 30 books is the slow boat to china
You have basically stated that the reason you want to "try out" trading is because you don't like your engineering job. Well, that's perhaps as bad as those who chose trading because they want to "make a lot of money", both are very wrong reasons, and will lead to certain failure. If you then discovered you have better, the "true" reasons to want to become a successful trader, then you may make it, but with your current mindset, there is ZERO chance you will make it. Not trying to scare or to discourage you, but my opinion is based on my personal experience with my Wall Street careers and my personal trading experience, combined they are over 20 years. I don't want to say more about them, but it would be suffice to say that I was not a mediocre performer in my Wall Street careers. Trading is not for the most people, especially not for those who don't have a valid reason to want to be a trader. Keeping a day job while trying to become a professional trader, is like living in a big city and trying to become a professional cowboy by weekend cowboy schooling, he would never become one.
so what are some of the true reasons for becoming a trader? and you're telling me that no traders have ever been successful by starting out part time and then making the transition?