It's all about EMPATHY and financial responsibility. Sounds like you (learninglisted) and your father in law have a good enough relationship to be able to muster up that empathy now if you're plan is realistic. If not, then maybe the time is wrong for you right now. Family first. Always. Timing is everything. The market will always be here. Remember that. Good luck with everything. Having a baby will be the greatest experience of your life. Whether you are trading or not. Keep it all in perspective. Don't live for your father in law, but don't live just for yourself either. (Don't be selfish). It is more important how your wife feels about it, and if you have the resources to provide what you must as a new dad if you can't do it with profits from trading. The "undercapitalized" issue is very important. Here I can see your FIL's point of view if he is right about this crucial concern. Mid thirties probably seems old to you now. It isn't. I was in exactly your position at the same age. I had sold my business, and my wife got pregnant. First (and ultimately only child). I wanted to trade (had been "investing" very actively for years). I needed a job and became a broker. I hated it more than you would believe. Worst "job" I ever had to endure. But it lead to the opportunity to trade, because that was the course I had plotted. Sometimes you have to pay some dues before you can fulfill your dream. I know I had to. That 3 years of being a retail broker was absolute torture to me. But I knew it was the path to what I wanted to do, and I never took my eye off the "prize". Of course, this was before the technology existed to be a "remote" trader. And prop firms didn't exist yet either. So maybe if this had happened now rather than then, I would have been less patient. More impulsive. And I did have some money from selling my business. But I also knew I needed an income. Be very realistic about your chances to be successful enough to provide for your family's needs. You really do have a lot to lose. Is it worth it? Is this really the right time for you to do this? I know the reality hasn't set in for you yet. You are going to be a father, but you aren't one yet. Your father in law is. Make sure you look at this from his point of view. And make clear your point of view to him. (EMPATHY!). With great emphasis on how you will deal with your obligations if the trading doesn't work out quickly enough. Peace, and good luck, and congratulations on your soon to be fatherhood, RS
Mr. Error, thank you for your advice. You bring up and reinforce good points brought up by others here. My FIL is an egotistical, micro-managing, right-about-everything, thinks-he-knows-it-all SOB at times, and that's difficult for me to handle sometimes. But I utterly respect him and understand his point of view in this matter. Your story is similar to mine in that I used to be a broker as well, and while I was doing it always had my eye on trading for myself instead of for others and dealing with all the headaches. Also, I am capitalized well enough through the prop firm; I just haven't taken advantage of that leverage yet as I'm trading small while testing out my strategies. I wish all ET-ers an outstanding Labor Day Weekend.
Exactly how will you determine this? I think in your situation its important but is this the best thing for your trading or your development as a trader? If the question is whether or not it works out quickly enough, I think the answer is pretty clear, you should probably not trade under these deadlines or times in your life when you "need" it to work out in a specified period of time. If you are in a position to judge it, then perhaps the pressure of a timeframe can work to your advantage. Or if you are thinking of it in terms of definining how much time you can afford before you need to get a typical job. But consider the idea of how will you judge what timeframe for learning is appropriate for you. Most traders UNDERestimate the amount of time and real work it takes to become consistently profitable. If you are a superlearner, not just in informational terms, but in your flexibility of adapting your beliefs, then you may be faster than average. But I would consider this quesiton carefully, because it represents much of the true risk in this decision. Trading IS different from other careers, in that the best traders think in fundamentally different ways. I know its this way in many careers, but it is especially true of trading. Its not a questionof time necessarily, meaning that time spent is necessary but not sufficient to make this one's career. Id say if you have the external timeframe pressures, you may be shortcutting steps in your development, so its better to trade with as few restrictions there as possible, therefore trade when you have few restrictions. Perhaps trade a simple system where you learn to execute rules flawlessly, for this you can use a small amount of capital and end of day data. This is pretty much your first step as a trader anyway, and with your family's support you can do it right now, without risking the other things that can induce more pressure. I think Don Bright's example of the $5.00 betting in blackjack is appropriate for you. I am not sure the other details surrouding his (brother Bob's) progression, but my point is you can work on the most important aspects of trading (wait - NECESSARY aspects) without putting much else at risk. If you can't execute your trades pretty much without hesitation, then you will remain stuck there. Its best if you get through this stage with as much of your life intact as you can, and in my opinion that is in a low perceived pressure situation. I know its not as glamourous sounding as full time trading, but I would make sure I covered that step under the best possible conditions. Just remember you are learning skills. I think the pressure can be a motivator as long as the stress level is not to the point of affecting learning. It sounds like if you have to give a timeline to your support system, you need to make sure that its adequate for YOU. And again most underestimate this amount of time.
Good points. I started trading again two months ago and feel I need an additional 10 months to know whether or not I can do this as my sole source of income. Prior to this go around I traded part-time a few years ago but couldn't handle both trading and working a regular full-time job, which I'm still doing now anyways but with more flexible hours. I'm curious what you and others think is the necessary amount of time the average daytrader needs before he/she knows they're cut out for this business or not....hmm, may be a good topic for a new thread.
Let's see. You: 1 Think that "having access to leverage" is equivalent to "being capitalized". 2 Are giving yourself "10 more months to see if I can [day]trade for a living as my soul source of income". 3 Are "very pissed off" and "VERY motivated to prove him wrong". Prognosis: you're doomed. Advice: start practising your very best, "gee dad, I guess you were right", right now; you'll be needing it later. (hint: 1 is not true, 2 is not long enough, 3 will prove itself positively ruinous) It's my opinion that you have almost as little idea about trading as your FIL does. But anyway, I'm sure you could reel off fourty quickfire replies to rebut me on that and that you'll thus go ahead with this endeavor, thank you very much. In that case, how about a frank admission to your FIL that, yes, the odds are very much against you, and that, yes, failure is a very likely outcome. Given that, here's the worst that can happen and here's what I'll do if it does happen and that in the mean time I'd really appreciate your support. If he's any kind of a man himself he'll understand such a forthright response and understand the right that each man has to determine his fate. If he doesn't, such a man isn't worthy of the honor and esteem you hold him in.
I know the type...my first wife died very young, and a few years ago I got remarried. My new wife's dad is like that. Very high powered and successful and "always right" type. Not to mention he is a pretty tough and scary kind of guy when he wants to be intimidating. He got freaked that she was marrying me because he considered trading "gambling". So that made me a gambler, and not a "worker". Believe me, I felt pretty intimidated the whole time I was with my wife until the wedding was a done deal. Then I was finally "family", and he resigned himself to it all. And really, I love the guy now. But I was truly uncomfortable around him for the 2 years before we got married. He treated my little boy better than anyone. But as for me.....not so great. Good thing my mother in law always loved me. Kept me alive The irony was that when he was young, he was a true degenerate gambler. Cards, sports, everything. He had inherited something like $2 million when he was 19 which was really a TON of money back then...like 1950 or so. After he lost it all (as sport gamblers all eventually must), he went into the gaming business. Became extraordinarily successful. Never gambled at all for the past 40+ years or so, but made all his income from gamblers. He was well connected because of his own experience and parlayed the connections into a great career. After we got married, he saw I was doing ok..not that long after, he took a retirement deal when his company (Mirage) was sold to MGM. He then decided if I could do it, he could. He considered himself a savvy guy with an "edge". Sat home all day and watched CNBC and talked to his brokers and pals a lot. Thought that was "trading". Never had a quote machine, never had anything but his network of "good old boys" and their tips. He was "in the loop". Or thought he was. I thought he was too. I was with Schonfeld then, and it saved me big time that I could not hold positions more than a day. I was very tempted lots of times to buy and hold stuff my father in law would tout to me. Fortunately, I wasn't allowed to. Not my money, Schonfeld made the rules. Then he suffered through watching all his AOL, WCOM, LU, NT, etc. go down every day. He has since realized that trading truly is a "real job". 'Cause I was able to make money when he was frozen watching his "investments" (his "trades" became "investments"...classic wrong side mistake) turn to shit. This a guy that knew very well when to throw in a bad hand at a poker table. Somehow he looked at the stock market differently (although he did finally sell before they really became worthless, which is better than what a lot of people did). I am almost old enough now (hard to believe) to become a grandfather myself. Got a stepdaughter 20. Anything is possible. She isn't married. Just a college student. But I wouldn't be thrilled if she announced she was going to marry a day trader. And I REALLY wouldn't be thrilled if she were married and pregnant and her husband wanted to START daytrading under those circumstances. Her real father, who I know quite well would freak out big time, and my father in law; her grandfather, would probably have the guy killed (I only survived because I had $ in the bank, and a lot of experience, but still he isn't thrilled with my profession). I love the guy, and if he doesn't love me, he sure puts on a great act. But I know he wishes I had a different profession. No doubt in my mind about that. And he hasn't said a word about it in years. But still, I know. Tough call my friend. I can only stress to you again that the market will always be there for you. And hopefully it will become more "trader friendly". Right now, I myself am making a few trades a week. Sometimes none. Whereas my average over the past 8 or so years was hundreds a day. I am taking care of some old business, and going to the orient next week to look into some new possibilities. My plan (and I have pretty much stuck to it) was not to trade July and August at all. (I just need my "fix" once in a while). I had lost enough the last few years during the summer to make me ill to think about it. Will get back into it when I return the end of Sept. But even with all my experience, I still know that when I return, I need to trade lightly until the volume picks up and the economy picks up too. Much easier in a good market than not. I know plenty here will say otherwise. They are all better traders than me. I know I suck compared to what I read about on ET. The world's greatest traders are all right here. I am lucky I am allowed to even log on to ET. But the reality is, it isn't just about ability. The market really does matter. Look what has happened to the value of seats on the exchanges. I was paying over $7k a month for a seat lease on the CBOE in the late 80's and early 90's (including through a recession). Now they are pretty much free. Now is a great time to learn. But not a great time to count on having a strong and consistent income from trading. If you realize that, and still are willing and feel like you are not being selfish, then absolutely go for it. If you have doubts, it won't cost you to wait. BTW, the leverage you mentioned is only a good thing when you are right. When you are wrong, it's a lot worse than worthless. I don't know anything about you other than what you have written in this thread. But I know that guys like "Gordon Gekko" and "Aphie" and other really young guys with a burning desire to become traders will eventually become very successful. But they have time on their side. They can "afford to be poor". It's different when you have a family to support. Peace, RS
of all the post in this thread, I'd re read alfonso's reply. His analysis is blunt and to the point; I fully agree with what he is saying. While points #1 and #2 on alfonso's reply will not stop you from going ahead, point #3 will show itself from the get go; actually, it will show itself when you make your first loss and point 1 will make your attendance at Trader's University a short one. Trading is a psychologically challenging game, it's all in your head, it's you vs.... you. Conquering yourself is the most challenging endeavor you will encounter, and 1 year won't do. Best of luck.
Thanks for your honesty. A couple of things, though, for your edification: Most importantly, I think you misunderstand my emotions in all this. I was pissed off when he told me, a natural enough reaction when someone who is unknowledgeable on the topic at hand states that you will fail at something. And I am motivated to prove him wrong by being successful at this. HOWEVER, as I mentioned earlier, I am NOT going to allow those feelings affect my trading, i.e. by taking risks I normally wouldn't or going into every day with an "I'll show him" attitude. To do so would be lunacy. If a year is not adequate time, in your opinion, all I can say is that many ETers on this board have stated in other posts that that was the length of their learning curve. It also comes down to what amount of money you're talking about - if your lifestyle demands half a million dollars a year in income, then no, I don't think I can do that within ten months. If I can make it to next June with more money than I started with and am trading between 500-1000 shares per trade using my strategies, I will consider the situation worth it to pursue for another year. As for the capitalization, if I hardly tap into the leverage or am extremely cautious when I do, and make small but steady gains that increase my capital contribution amount which leads to proportionally greater buying power, what's wrong with that? Isn't this what the prop trading model is all about?
Remember, whether people perceive you as a) A financial genius or.. b) An irresponsible gambler is based on only one thing.. Your success in trading. All else is just a bunch of talk. Show him your P&Ls. If you have made money, you have proven him wrong. If you have lost money, he may have a point. There is no answer to the question "Is trading gambling?". Some traders are sensible and talented, some traders are irresponsible gambling addicts. The proof is in their P&L statements.
One year learning curve? My hats off to those you are referring to, and to yourself should you achieve success in that time frame.