I was an engineer myself, and quit my job and have transitioned to full-time trader. However, the way I went about it was rough. I quit my job and just started living and breathing markets all day everyday including weekends. 12-15 hours a day. I was completely green when I started. It took me 2.5-3 years of mostly breakeven trading before things came together. During that time I wasnt trading with a lot of leverage, so I never blew out any accounts. I really wast even trying to make a living. I was living off my savings. I always thought I had the talent to become a great trader. I was a great chess player as a kid, and it wasnt because I worked hard at chess. And to some extent, I was correct. In my first month ever trading, I was up 25 grand on a 50 grand account. However, I thought it would go to the moon, and I ended taking about 5 grand for actual profit (in actuality the selloffs were corrective, but I got scared that I would take away nothing, so I took what I could, essentially at the bottom of the correction). And so began a cycle of solid analysis, but poor trading. The mental and emotional side were killing me. And to be honest I never really found a solution. But what happened over years was that I became so confident in what I was doing and the decisions I was making that emotions no longer ruled me. My system became simple and easy to execute. I just knew what I was doing. I also think the fact that I chose to study the techniques of Wyckoff/Livermore was key---because the principles they describe allows one to ascertain whether the smart money is buying or selling, but it took years to learn to identify the patterns that represent the principles they talk about. Overall, it was a long tough road, but it was worth it. I will never retire. I will trade until I die, because I love doing it!
hey ammo, i haven't done it yet but its definitely on my to-do list. i've been getting a ton of recommendations in many different directions about how to proceed including designing, developing, optimizing and backtesting different trading strategies. people have also recommended different books, websites, training videos, etc. right now i've been reading through alot of acrary's old threads and posts and learning his methods. also on my list is to read: http://www.amazon.com/Reading-Price-Charts-Bar-Technical/dp/0470443952 and http://www.amazon.com/New-Trading-S...=sr_1_1?s=books&ie=UTF8&qid=1307304154&sr=1-1 ammo - i don't know if asked you this but are you purely a discretionary trader, one that monitors the charts and enters and exits by hand. or do you incorporate mechanical trading systems & algorithms to automate your trades?
that's good to hear, it sounds like you've found your road to success. same question for you - are you a discretionary trader or mechanical trader (one who programs systems/algorithms)?
sorry didnt mean to go on and on about my story, but I wanted to convey that yes it is possible I am discretionary--which is the nature of the wyckoff method. I am fairly automated with my exiting and targets, not automated as in a program makes decisions for me; but automated in terms of how I make my own decisions (like if x happens, then I do y; those types of rules). The reason is that it keeps me from mismanaging my trade while in the trade; ie allowing greed or fear to play into my decisions.
You are an investor then, not a trader. You don't even know what trader is so forget about it, you are city sleeker claiming to be a cowboy, that's who you are, admit it and get over it! Traders don't measure their performance against the performance of S&P 500, only the money mangers and investors do.
I am not a day trader if that is what you are saying. I mostly do monthly options spreads with varying approaches for varying market conditions and underlying. I will never be a day trader, nor do I have any desire to be one. I prefer to sell you losing lottery tickets.
http://www.associatedcontent.com/article/2966586/professional_traits_that_can_hurt_you.html?cat=3 Engineers are often poor traders. Why? They want to measure and understand everything in precise terms. But stock trading is not a science; it does not lend itself to precise measurements. Trading is driven by human emotions. An engineer may develop a precise formula for valuing stocks or measuring charts only to see it shattered by market action because the market may view the exact same ratio, say p/e, as too high or too low, depending on the prevailing sentiment. As a result, engineers often argue with the market for no other reason than because their formula tells them a stock should be doing X while it is doing Y. I'm not agreeing w/ this statement entirely.... one thing I can say about engineers in general is due to their relatively high IQ they often have problems admiting when they are wrong(about most things in general) which obviously might affect holding onto a bad position too long. I've known people much smarter than I am that struggled with this particular issue.