Someone asked the question yesterday about making a good living daytrading. I found the responses varied and facinating, however one persons idea of a good living may be completelty different than anothers. Let me put it more directly. I am considering going full time with 30K and plan to make a high 5, low 6 figure income after the first several months of trial and error. Is this realistic? Are you doing it and willing to share that knowledge? Are you doing it with much more/less capital than the 30K I propose? Give as much detail as you can regarding the amount of capital you employ and the actual income you have consistently produced. Your candor could help me make a life changing decision to leave an almost 20 year career with a good company making decent income, so please be realistic. I really appreciate your responses, even if they are not what I want to hear! I am talking about daytrading stocks only. thanks
You must understand that the probability of you making even 1$ is not very high... IMO if you are getting into the game soley for the money you are much better off finding an easier vocation...
oh man do you have a lot to learn.stay where you are and swing trade at night or something.the odds are so far against you even lasting a few months.
It took me 20 months to go flat in my account. Now, after 3 years of trading full time at a prop firm, Im making a decent living and paying my bills. At worst, I was - $150,000 ito my firm's money. That's not to say that I'm the standard to which you should measure the success rate of daytraders. I have seen one guy who made $50,000 after 3 months....and $250,000 after 6 months. He was incredible. I dont know if he had any experience. I didn't have any previous trading experience. If you're making high 5-figure and up in your current job, I would stay there. The odds of you making the same amount of money as a daytrader is very very slim...especially if you have bills to pay and family to support. If you do decide to go at it anyway, just make sure you have at least 12 months of reserve in your bank...you wont make anything first 12 months. If after 12 months you are at least flat or just slightly negative, I think you might have a chance. Finally, I can say this: I really had nothing else to fall back on when I did this. It was make it as a daytrader or work at McDonalds. That kind of choice gives you a huge incentive. Do you have that incentive?
Ways to increase your chance of success: 1] Capital (between $25,000-$50,000 is bandied about) 2] Trading plan 3] Coaching from other successful traders 4] A plan for contingencies (power outage, etc.) 5] Money management and discipline to stick to it 6] Surperior mental state (positive, disciplined, confident....) 7] Best tools you can find (computer, EDAT broker, ISP, etc.) Have I missed anything?
I don't know what your backround is. I was a stockbroker for a few years as were a lot of daytraders. Whether this was an advantage or disadvantage can be argued. Then I was an on the floor market maker for several years. Again, I don't know if this was a help or hinderance. I went to work as a daytrader for a trading firm in 1996. I started with 125k (of their money). I held my own, and was raised to 250k in a short time. My income for that first year (which was really 9 months, was 16k. My next year (a full year) was better, but still less than 30k. My best years my average got up to about 300k+. But by this time I had a lot more buying power, and a cooperative market. In 2001, I had an ok first half, and a losing second half. My total income was less than 100k So I believe there is potential, but is it realistic to make the kind of money you are talking about in the first several months of "trial and error"? I truly doubt it. Now there are people that make posts on this site (Treykool comes to mind)....that are super stars right away. I work in a firm with over 1000 traders. I know the stats. More people than not don't make anything their first year, and their first two in many cases. And they are trained. And they have way more than 30k to work with. They learn from their mistakes. They have rules to follow (which IMHO are imposed not so much to help them make money, but to help them from losing). Now I consider myself a better than average trader. But in this market, I am still struggling. I am just getting by, and the stats say I am in the top 20% of my firm. I will in all likelihood be going to another firm very soon in which I will be able to trade different styles and fall back on what I know from my days as a Market Maker. My wins will be smaller (% wise), but my success rate should be much greater. But this will involve some very sophisticated strategies, which cannot be implemented without being a BD or MM. I could not do this from home without a HUGE amount of money, and even then, because different rules apply, I doubt the strategies would pay off after requirements (margin) and commisions. I don't want to discourage you. I think trading is the greatest way to earn a living. I just think you need to be realistic. You need to understand the learning curve can be long and not particularly steep. Plan on not making a lot of money for a while. Don't get into financial straights. Be patient and your time will come. I know you will hear different. I know from reading posts here than just about everyone but me makes a ton of money right away. I just wonder if this is a site that attracts only the born to win trading geniuses. Hope you are one of them. I was not, am not, and yet am at the top of my firm, which is well capitalized and staffed with well trained traders. Many of which have been around for 15 years or so. I wish you all the best of luck. I hope that the 30k is not your life savings. In any event, go slow, learn from your mistakes, and take your losers quickly. Better to lose a little on what later turns out to be a winning trade than to get into the wish and hope and pray mode. You can always get back into at trade. There is always another trade. Don't stay married to the losers!
in my opinion, is probably "How much do you actually lose daytrading?" Of course, most of the people who might have answered "everything" or "my entire account" or "too much" would be unlikely to be reading this thread. Many of the very best traders ever busted out once or twice or three times. Some busted out a few times to start out - then a couple more times years later after they were supposed to be past all that... Maybe, if you want to more optimistic about things, you could ask, "How much are you likely to lose while learning to day-trade?" In short: A lot. Just starting out, trying to support yourself on 30k, the odds of your lasting more than a couple of months are minuscule. If you try it, I earnestly hope you fool us all, and tell us all about it. I suddenly realized the Catch-22 of day-trading: If you're crazy enough to be a day-trader, then you're probably too crazy to be a day-trader.
Better keep your day job and the money it provides For seed to plant into your new venture Make your trading prove itself first!!