My expenses were about $15K. I had no debt - no mortgage, no car payment, etc. Just day to day living expenses. You can't make this all about $$$. Who has a better life? A professional making $250K and working 10-12 hours per day or someone (like a trader) who makes $80 to $90K and works when they want to? Point is you can't put a dollar value on freedom. I never trade 8 hours per day - US market is open 9:30 to 4:00, or 6 1/2 hours. I may eat breakfast at my computer between 9:15 and the open watching pre-market but it's not 'work'. Living frugal to become a trader is a 'failed strategy'? LOL I'm really glad I failed. Clearly you don't 'get it' Most anyone starting up a venture - whether a restaurant, retail store, etc. watches their living expenses very closely as the business attempts top get off the ground. What you don't get is that some people have entrepreneurial goals - they don't want to be a working stiff for corporate America for 40 years. And last, I can live anywhere I desire. Anyone with a job at a given location doesn't have that either. There are many intangibles as a trader you can't measure in $$$.
Trading is not freedom. Money is freedom. With daytrading you are occupied 6 market hours and at least 2 analysis hours a working day. You are talking about something different than I am. I am saying that living frugal to add capital to trading is totally stupid idea. Most people who go into daytrading quit their job to daytrade. The examples in this thread are like that. People first quit their job, then live frugal so that they have more money to trade with, then trade for living or create strategies for several months and then trade. This is very very wrong on so many levels. First of all why quit your job then live frugal to preserve capital. This makes no sense whatsoever. If you wanted to preserve capital then keep your job, live frugal is a much better way to preserve capital for a trading venture. Not only does that preserve capital. It ADDS capital, so you're no longer undercapitalized. If you have to live frugal then whats the point? You have to start a trading venture only if everythings in your favor, and living frugal should only be the last resort.
Guys, this is life, and survival is an art. Knowing your capabilities v. believing you're capable is a very slippery slope. The art of living free and comfortable is possible. It just takes a well thought plan.
This is wrong on so many levels. I will explain. Without having done the intellectual work on yourself you are not free, you are subject to various mental restrictions, some of which you will not even be aware of. The truly successful traders have done this work on themselves to achieve heightened awareness and also an acceptance of self. Consistently successful trading requires an intimate awareness of what makes you tick. Money in itself is not freedom. If you are not equal to wealth and yet acquire it, it will destroy you. As an example I give you those who have inherited great wealth and failed miserably. There are books written about the difficulties involved in this very issue. Exhibit B: lottery winners. Money represents an ability to engage in trade. It is a tool, nothing more. Saying money makes you free is like saying education makes you wise or possessing a gun makes you strong. If you are not as complete control of your life as possible then you are not free. It is impossible for an employee to be truly free, as they are the subject of an obligation. I have occupied myself for longer than 8 hours per market day since I first started out on my journey. All of this has been through choice. I can also take tomorrow off if I wish. I can shut up shop for a month if I wish. In a few years if I decide I want to leave trading I can do this also. I have immensely enjoyed the intellectual challenge of figuring all of this out and I now have the freedom to choose when I trade, for how long, what markets, etc. If I wanted to trade 2 hours a week I could, and I'd still make a living. (I'd need to carefully choose which two hours, but it is possible). Nonsense. You cannot fully commit yourself to this profession when you are subject to an obligation and working for someone else. In order to transition sooner or later you are going to need to give it your full attention. When you do so, assuming you have no passive income sufficient to support yourself, you will start to eat into savings. The more frugal you are, the longer these savings will last. You should make them last as long as possible, as you never know how long it will take before you can do what you need to do. It took me several years. Had I lived more extravagantly I would have run out of funds much sooner, and may never had the opportunity to fund a decent sized account and be successful. You need to quit the job at some stage. Every month you are still an employee is another month your are not developing what is required. You do not leave until you can afford to. However you can do so sooner if you are prepared to make sacrifices. If you are married to some notion that you cannot ever reduce your living expenses, then it will take you all the longer to put yourself in a position where you can leave your job. I do not think this is a very good attitude. As for everything in your favour - that will never happen. You have to choose the point where you have put the odds in your favour as much as possible and have a realistic chance of success. Working another two years because you don't want to reduce your expenditure by 20% is stupid.
Thank God somebody "gets it"!! failed-trader obviously doesn't get what the journey entails nor the joy that success brings. Nor does he comprehend the end result -- and the freedom one has. If one offered to triple my yearly trading profits and go back to a corporate job I'd say "no" in a heartbeat.
Trading part-time is much worse than trading full-time. Even where it is possible to do it profitably, you learn much slower and generally make a lot less money. So whilst it provides an income stream and capital, it also makes it very hard to achieve trading success. And don't forget, the upside of most jobs is limited. Trading well makes money, hence trading is freedom. Trading is also pleasurable for many traders, whereas most good traders hate normal jobs. Many trading strategies don't require constant focus during market hours e.g. long-term trading, automated trading, investing. The reason to preserve capital is that without it you can't trade. Since capital = initial account size plus P&L minus expenses, keeping expenses low clearly benefits. Many trading strategies also scale, so the income and wealth gets bigger as you get more capital. A guy spending 10k a year vs 60k a year will be $150k better off in 3 years, assuming no investment or trading gains on that extra capital. If he can make a decent return, he'll be 200k, 250k, 300k+ better off. That's a huge difference in just 3 years. Living frugally gives you much better odds of success, and means you are richer in future than if you spend lots early on. You said to only start trading if everything is in your favour - well, low expenses is a huge item in your favour, so why are you recommended putting odds against you by spending lots? In any case, there is never a perfect time to start. There are always downsides. Those that can do, do; those that can't, talk about it.
I wonder how much crack these guys are smoking. Geez, 80% return a year, every year, no problem............. If one was making 20% a quarter on a regular basis, a big trading house would pick them up and they'd make $30 Million a year, without any risk. I strongly suspect the author doesn't have a clue.
Not so fast N'Jeff . . . making $80k/year with the backing of a $100k account is what successful daytraders do . . . Most probably make a higher % return since they don't have $100k in play. They exist here and elsewhere, believe it. (Crap, this isn't big money we're talking about). Of course, that's the top 1% with that type of profile. Frankly, those aren't good numbers that would motivate anybody with common sense to trade. If you've traded for any length of time, you realize very quickly that what you do to make ~$80k does not translate into a hedge-fund strategy that makes you worth $30mil. That's like comparing apples to orange boobies. . . both delicious, but not the same at all. Keep trading. JScott