Gonna jump; need advice

I’m gonna take the plunge from the warm (in)security of an 8-6 job into the cold waters of trading. I’d appreciate all your questions, answers and comments.

A little background. I’m not a complete newbie – I’ve been in involved with the trading business for almost 20 yrs. I now work for a major hedge fund in risk management for a salary well into six figures, so there’s some opportunity cost involved. I have a good academic background with an Ivy League MBA (not saying that’ll help with trading).

I traded for myself at a day trading firm in ’98 for about 4 months (Cybertrader platform) before being lured away by a job offer I couldn’t turn down. Now I can. I plan to initially trade 1-3 markets/equities with accounts funded with $100-$200K probably using TS6, IB, FfastTrade or other alternatives.

I’d like to find out more about the following:

- should I consider a prop firm first?
- does anyone use two machines with software from a single vendor on both as a backup. And DSL as a backup to cable?
- how are fills in other relatively liquid ETFs other than QQQs (e.g. SMH)

That’s all for now – I’m sure I’ll have more later.

Thanks for your replies.

 

"I now work for a major hedge fund in risk management for a salary well into six figures, so there’s some opportunity cost involved. I have a good academic background with an Ivy League MBA (not saying that’ll help with trading). "
a guy would have to be nuts to give up 6 figure job for trading unless you already have enough to live on.the odds are against you in this market.
another idea.keep job trade longer term or other markets.you can trade futures almost 24 hours now you know.

 

you'd be crazy to give up a six figure job... if you're so smart you should design systems that could trade stocks/futures WHILE you earn those six figures.

just my $.02

 

Make sure you really want it. The last time I checked the failure rate was about 95%. Know that before you start.

Remember, you can still trade and keep your job if you do swing or position trades. Actually I think that type of trading is better in this market because many stocks make an intial move early in the day and then just chop.

All in all I would say this is a difficult environment to learn in.

Well, whatever you decide good luck!

 

I agree. Why give up your job when you can have the best of both worlds.
You can start out swing or intermediate term trading.
You could trade LEAPS and manage those and write front month calls against them for an income.
Good luck anyway.
Cheers

Disclosure: I sold covered calls on Leaps and got a big stain on my pants.

 

I’d like to find out more about the following:

- should I consider a prop firm first?
- does anyone use two machines with software from a single vendor on both as a backup. And DSL as a backup to cable?
- how are fills in other relatively liquid ETFs other than QQQs (e.g. SMH)

That’s all for now – I’m sure I’ll have more later.

Thanks for your replies. [/QUOTE]

Working at a hedge fund, you probably know more about this than any of us. Since you asked however, I'll take a stab at your questions.

1. Prop v. retail. Lots of posts elsewhere on this. Basically a question of the environment you want (office versus at home), need for leverage and trading vehicle. Most prop firms only do stocks, no futures, FX etc.

2.Backups. Yes, I did both of these, redundant s/w and internet connections. Finally tossed DSL after major hassles getting it back up after a move. Cable works fine for me. You can probably call broker and exit trades while you're firing up the backup.

3. Fills on ETF's. Depends on your volume obviously, but shouldn't be a problem for the account size you mention.

Good luck.

 

*No reason for a prop firm. You already get 4 to 1 leverage on day trades for stocks and miniSP and miniNasdaq futures have the leverage as well.(ie. 1 NQ contract = 800 QQQ and with only $1000 intraday margin requirement). THATS WAY TOO MUCH LEVERAGE ALREADY!

If you decide to trade futures heres my little tip for you: "a stop is not a stop until you place it in the market, any mental stops are not relevant".....

Good Luck!

 

I'm not telling you what I pay, but I fail to see how commissions could be any cheaper than what I pay at the prop firm I'm with, considering my size (average).

Not all prop firms are overnite wonders. The one I'm with has been around a long time. And it has roots on The Street that go way back. I'm not touting, I'm saying it because I looked at a few key firms and all I came away with was the impression of young, arrogant blood. I wouldn't stake my fortune in such a place. I haven't bothered to count how many are out of existence. I guess I'll wait till this round passes.

I will say this. I'd trade places with you in a heartbeat, though probably not indefinitely. The market is not being generous. In fact, it's being stingy and more unkind than usual -- and by that I don't mean that it's not going up. depth is limited. Momentum is a rare phenomenon. It's frustrating.
This to my mind. Maybe someone who's been around as long as you have, or someone like Seanote, will find opportunities for great trades abounding or even somewhat plentiful. I don't.

anyway, my .02

 

No its not!

 

I can tell by your questions you shouldn't be doing this.