Another aspect that may have been overlooked is "overhead"... From my experience and the experience of others it is very difficult to get ahead as a beginning trader if you are accustomed to material "trappings" such as one who receives a paycheck every week and has no fluctuation in their income or in the "timing" of receiving such income...This major "sacrifice" is something few aspiring traders are willing to make, presumably until it has been taken away from them and they realize just how much they love the "game" regardless of whether not they become as rich as they assumed they would prior to entering the trading arena... I find it is much easier to trade if you own most of what you would finance provided you had the steady income to justify the monthly payments...Best to pay off your car, eliminate credit card debts, pay off your home or rent something cheaper...That way you can have a modest living expenses as your core base and anything that you make above or beyond this amount can be set aside for some later date... Also, it is NEVER a good idea to think of what you could buy with your day's winnings...Because inevitably you will have drawdowns and give back exactly what you made and will feel quite defeated...It is best to simply determine a date to withdraw any excess capital and reward yourself, go back to the beginning equity amount and begin anew...Obviously, if the account is too small this is not a reality...But if you have a decent sized account it is a good idea... Basically, my main point is that you have to have all of your affairs in order PRIOR to entering the game...The fewer costs or overhead you have the better the chances of survival...It is next to impossible to try and pay the bills from your trading at the beginning and to consider this as your sole reason to begin trading is futile...Simply put: it will not happen, not in this environment...If you are constantly thinking about having to pay bills with your trading income, you will never take trades based on the action; you will take trades because you HAVE TO make x or y dollars...Ask any traders who started out and traded with big overhead and had to finance their lifestyle with trading profits; it is a tough and extremely stressful road...You will find yourself constantly reacting, second guessing, filled with hesistation...It is a brutal experience and I think everyone in the beginning stages goes thru it; maybe some are able to elimate these psychological demons, guys just out of college and accustomed to being poor...FOr someone in their 40's, very tough predicament I remember an experienced and veteran floor trader once telling me that alot of the guys on the floor who leased their seats did not exactly "blow out"; instead they just could not meet their overhead...At that time seats were leased at about $7,500 per month and alot of the traders were covering their lease payments but could not cover their living expenses...When you consider, it required over $90,000 per year just to "breakeven", it puts into perspective the advantages we have as electronic traders...Nevertheless, it does not mean that it is any easier to cover one's overhead in the beginning...
1: You are right...the contributions to THIS THREAD do demonstrate quite a bit of reality!! 2. You are absolutesy on the money (except for the uptick rule, which can be overcome several ways) about possible trouble for traders like me lately. Follow through has not been there. Momentum (relative strenght) has not worked recently. Fading the markets early moves has also not been particularly working as well except on the occasional big up or down opens (another of the firms strategies, though not one I myself employed as often as some). I think that really it is just a result of two things mostly. A non-trending market, and the fact that too many of us have been trading the same stocks the same way. In other words, we have been trading against ourselves. My solution is to trade for myself and trade completely differently. As I mentioned, I will be trading derivitives and using different strategies. I will not need the huge amount of buying power and my payout will be 100%....another factor in the "struggling".... a small payout...compensated by large buying power in the past....but lately reduced across the board. So I am hoping that I can do better with significanlty less buying power. I am accustomed to getting 40-50% but more of a factor (for me) will be the freedom to use other strategies ... most of which will eat up very little or NO buying power. (strategies....not so well known ....and rarely understood..a topic for another thread). When and if things get easier, I will go back to what I was doing. Nothing like the rush of making and losing big money in a day! (too bad they balanced out) For now, I will be happy just to be slow and steady.
Or going to school with a 30k tuition....it is the giving up of the career with a decent income that seems like a poor call. We don't know if the 30k is the guys life savings or just pocket change. Maybe he is ready to retire after 20 years, and is willing to pay the "tuition" before getting really serious. I don't think there is enough info to give an answer if he should do it or not....Just the part about a high 5 figure, low 6 figure income in a short time. There I have to agree with most that it is virtually an impossibility. Hey Darkhorse....hope you are doing well in this market...really mixed....and mixed up. I am on the sidelines
Can you tell me more about your experience regarding this? I have never done swing trading. I was a buy and hold investor and then changed to daytrading last summer. I had some losses and now I break even, mainly because I understood how important it is to cut losses soon. Ideally my losses are near that amount I pay IB for commissions. Maybe I am wrong with my understanding of swing trading, but I think you have to accept larger losses there than with daytrading? So from this point of view wouldn't it be more logical to skip swing trading and start with daytrading right away? THANKS!
your commitment and environment... if you fancy yourself and your opinions, then hope that there's a rising tide that floats all boats... if you are realistic and flexible to roll with the marketplace and avoid the Onsite Trading's/AB Watley's of the world, then you will succeed... if you study and apply what you learn, while being in an environment that's condusive to learning, then you will succeed. there never will be any guarantees, of course...
can't complain. not making a killing but not getting killed either. i've had a lot of sideline time also, my trading frequency has dropped significantly in recent weeks. Patience is critical in the slop, have to save your ammo for clear targets and resist garbage plays
these conditions are accurate for the current markets. on candlestick charts, these are represented by long tails, which also translates into high volitility, and narrow range trading... this also translates into, too tight a time frame to execute trades within... simply put, by the time you see your price, it has already left the building....
catcando, How much ? Not enough! It's very difficult and you will have to put in a very significant amount of time to hone your skills. That being said, if you can do without income for 6 to 12 months and have the right personality, the upside is virtually unlimited. Give it a try!