For you guys that got a job for the security but never gave up trading, has your trading improved? Yes it requires a lot of time/money to know what all the pitfalls and mistakes in trading are (so you don't repeat them) - but when you get to that level: often your risk capital isn't enough to trade the kind of size you need to make a decent living and you realize that you'll always have to face risk and uncertainty on every single trade (there is no sure thing in trading). At that point a low stress job maybe appealing as: it gets you away from thinking about money, you get healthcare, you get paid vacations, you get away from intra day noise and chop. I think trading fulltime is only worth it if you can make 2-3 times what you can make at a job (while you're working at the job) and do it with consistency (monthly profitability - 98%).
Its funny most of the threads created in this section are created by guys that want to leave their jobs to get into trading - if they only know what they're getting into (a lot less than they bargained for). I think you have to have a big bankroll to make it without leverage - like 500,000. With leverage it can be less but the leverage will kill you if the consistency isn't there.
For me, taking couple of months off from work was the logical choice trying to go at trades full time. So far I think I would need about 80 to 100K to be able supplement my regular income. With my trade setups I don't feel any pressure at all; I worked couple hours a day checking up on the news, do searches, set stops, and then do errands; lots of free times it gets to be very boring. On the plus side I can go any where, the laptop is all I need. If you can set up your strategy properly I think it's not that hard to trade; with a lot of patients and observation I think anyone can at the least become a successful part time trader.
Why would one need to make 2-3 times their salary? Greed? If one trades remote then they have no commute, no expenses on business attire, no lunches out at restaurants, etc. That savings alone could likely pay for health insurance premiums. Paid vacations at a job? No big deal ... a trader can take off any time they desire and don't have to check with a boss. And $500K? Hello? I started with $90K in my trading account back in 1996 and made enough that first year to pay all the bills etc. And since then it's not all that different. Each year I typically start with $100K to $150K after withdrawing previous years profits and investing them in a longer term account. Making a decent living on the above amounts isn't all that tough.
My rationale for needing 2-3x salary to go it alone is to make up for hard costs of benefits and insurance, but the majority of the markup is to make up for the opportunity cost of leaving a stable job. Traveler
"Has getting a job improved your trading? " Absolutely no! I worked at a "real" job for 3 month. Though my boss allowed me to watch at the markets temporary, i lost my whole intuition and had the worst drawdown since 1997.
From 1996 to 1999, it was a dream to trade as the markets did nothing but go up. Buy a stock, any stock and sell it higher. Oh what a dream. Then there came that day when the market tanked and then there was a recession. Uh-oh. Now there is a bull market again where we buy something and then sell it higher. Oh what a dream again. I think some of you guys will change your tune if low and behold an ugly recession rears its head. You will be smacking yourself trying to get a real job. I remember that fateful day in January 2001 when Greenspan held an emergency meeting and lowered rates by 0.5. Then he kept lowering the rates all year round. It was an uncontrollable recession. There were many people out of work and wishing they had jobs. Does anyone remember that day or do we all have a case of selective memory? I remember the Excite building. All shiny new. Parking lot full of cars one day. On another day, the "for lease" sign was put up outside. The male thinking is not logical. They see someone else making cash and not seeming to do a lot of work and then try to do it themselves. You see, though, there is an old saying which states "What the wise man did in the beginning, the fool did in the end." The wise man started trading all pro in 1996 and then slipped away in 1999. The wise man started trading pro in 2003 and then who knows when he will slip away next. Hello. This is 2006 now, time to wakeup. Do not quit your job right now. Wait and see what happens in the new year. . . Do not think of what everyone else is doing today. Think about what tommorrow will bring instead. You should buy a house when the market is in total chaos and tanked? Agreed? You should start trading when the market tanks and hits a bottom. Look at what the wise men are doing right now. Look at the ETFs. Large cap value seems to be on a tear and why isnt small cap growth on a similiar tear? Are these money managers simply playing musical chairs? No, they are seeing something that you are not. Large cap value is bought when someone believes the times ahead are going to get rough.
With all due respect your post shows a lot of naive thinking and/or a lack of understanding of the markets. You seemingly assume that traders only make money in bull markets from your citing 1996-1999 and post 2003. Most any trader who does this for a living plays both ways, long and short. There's plenty of money to be made on the short side, and opportunities for shorting exist every day. Then you imply that trading is "not a lot of work". Again, you don't apparently understand that traders, who trade for a living, do in fact, put in a lot of time and effort. Next, your reference to the "wise man" as related to 1996-1999 again misses out on what the real wise man was doing in 1999 and early 2000 ... and that's going short. For example, in Feb. 2000 I shorted VTSS at $100. It climbed higher but I held on. It's now trading at $1.07. Point? Smart traders make money both shorting and going long. Last, you suggest one should start trading when the market hits a bottom. I've been at this full time for over 10 years and I have no clue as to when the market is at a top or bottom. All I care about is enough volatility in enough stocks to provide opportunities for making money.
Well actually they are. You're giving them too much credit. The smart ones simply see the scam, that's why the join PE firms and start doing LBOs. But I still like your post.