I am a part term trader. Well.. a little more than part- time as I always manage some time when I am doing my day to watch the marktet. You know... that does not mean I don't have the right temperament to become full time trader! But it's the lack of ability and courage that is pushing me behind like most of other part timers. You will find no part-time trader out there who doesn’t have a desire for becoming a full time Forex trader. Everyone trading part time right now has a dream to reach the point where he or she can leave the current day job and start trading for a living. Of course, it is a legitimate fantasy that a few traders will eventually achieve but others will probably never find such opportunity. Answer honestly! Right now, how much fund do you have in your Forex account? $ 500? $ 1,000? 2000? Can you add more to it? Remember, pips don’t equal much when converted into cash and not even leveraging with that amount of money is going to make you self-sufficient any time soon. Brokers don’t leverage more than what you have on hand to lose. Look! If you still love to go on with small Forex account, don’t have confidence enough to quit your day job. You can focus on slowly building that amount up by managing your risks. No need to try trading hard to become full time trader. Trader like us should be happy if we can earn a little from Forex. I mean, who wouldn't love to earn something extra with what he is earning? For us, this is what we should call professional!
I imagine the large draw to forex is the leverage. Trying to over compensate for a small trading account with leverage is the road to ruin. Its better to learn to trade without any leverage, unless the trader is into casin mode gambling. Contrary to the fx delusion that a $2,000 can enable you to quit your job, it still takes money to make money. It would be challenging to carve out a living trading forex with a $500,000 account - on $2,000 deam on.
I started out in long term stocks long ago, no PCs or internet which I see now was an advantage as internet burns out accounts more than anything as you can go in and out so fast. But what gave me worst decrease in increasing my accounts was over 7 years of flopping around trying to learn how to trade commodities both in day trading and long term trading as it IS much different than stocks. I worked nights back then which allowed me to lose during the day whereas trading stocks were easy as USA was in bull market. To this day, long term make more money than day trading for me, and hedging anything I buy/sell for anything over 59 minutes, gives me little insurance. There are many things in my life I wish I could have never done, but financially should have just stayed with stocks as I figured out several years ago I have several times more accumulated. I did finally get profitable in commodities and made up all the losses in first year and have done nicely past 25 years, but those lost seven years took a huge toll of not making and my quality of life was so much better than as well. People don't talk much about quality of life, but to become a full time trader, you lose much of your life to the game instead of spending it with the family. Time lost from family you will never get back, and money you have in accounts, they don't really care about. Ask Buffet if he day trades, he doesn't, he does best in options market dancing around positions in his long stocks. Buy stocks and sell Premium in options. The staying in longer, staying in for the gaps you never get in day trading, and much much less fees you have to pay. If it wasn't for me eventually getting automation, I be stopping day trading, it getting harder for me to do manually as I approach sixty, I seem to be like one second slower so am working on systems where I don't need as much speed so once in awhile I can day trade if I like.
[QUOTE="..... People don't talk much about quality of life, but to become a full time trader, you lose much of your life to the game instead of spending it with the family. Time lost from family you will never get back, and money you have in accounts, they don't really care about.[/QUOTE] I totally agree with you. Most wannabe full-time traders have no idea how hard it is to walk down this road. All they did were dreaming about trading on a yacht with company from some victoria models. Imagine what wall street will be like if too many full-time retail traders get rich from trading.
my understanding is that all he does is sell naked way out of the money puts. if it is exercised he buysthe stock at a price he really wants to hold it. if not he collects the option premium as option expires worthless.
I have a buddy who does this, and like 11 months of the year he does consistent profits, but it is that 1 month of the year that he gives back but he ends up with 10-20% each year. Black Swan month. Must work well as Buffet been still doing it long time. But I hear he also buys much stocks or maybe it is Commodities that he buys than stocks, perhaps a bit of both, think he likes the dividends in stocks. Few old time option traders use to tell me there were consistent plays when dividends where paid, but I never seem to see this. Do you know much about dividends plays and options?
the difference between your buddy and Buffet is the strategy. Buffet is looking to lower his cost on a long term basis. he is looking to buy if a negative black swan event occurs. if the put is exercised, he is willing to hold the position for the long term. your buddy is looking for a trading profit. he is acting like an under capitalized under hedged insurance co.
zilch, although I had an acquaintance who use to do it. likely he was exploiting some market inefficiency.
Yeah, I hear ya. In similar boat. I daytraded full-time 2001-2003. Then 2004 to present I am back to Corporate America with jobs that pay progressively better. Very satisfied with my career path and job. So, I've been daytrading part-time on/off since 2004. There were long periods that I didn't daytrade at all. But it wasn't until 2015 that I became net positive in one of my account. But that was for a swing trading account. One of my other accounts that I daytrade I'm also net positive for the year. Beating the market. But some of my other daytrade account faced huge losses. I have multiple accounts. 2016 is rough and trying to build back up. Luckily, I have a FT job. I sometimes fantasize about trading FT. Nah... It's not realistic. There are days when I make more than my monthly income or most people's. But then I'm rudely reminded there are days when I lose a lot too! Or even for the month(s). I'll gradually improve my skills slowly... And build a nice side nest egg with trading. About stocks, I should have just buy and hold and regularly invest monthly or weekly. This daytrading futures and stocks is really tough. Very difficult to catch all those fluctuations all the time. Yeah, there are periods where I outperform the market and did really well. But there are periods of near catastrophic losses as well. So net net the results are mixed. IF since 2001 had I just regularly invest every month and bough the Vanguard index fund, then I would have a much BIGGER investment portfolio and assets! With much lower stress cuz I wouldn't be glue to the screen. That's the big lesson boys and girls! Yeah, I feel I've made a lot of progress in those years. My edge gets better, but I still have poor risk management. Cutting losses short would have made me hugely net positive in all instances and accounts. So still a long way to making a great living from it. But the underlying signals are there.. trader99