I agree with you 100%, one must study ardously and apply oneself with great ardor to master this science/art form. I disagree with you 100%, you couldn't be further from the truth on this one. A trader must have other modes of income while he/she is getting their trading legs underneath them. If it means working during the day and trading at night ...do it. If it means trading during the day and working at night ... do it. If it means being supported by one's spouse ... do it. If it means being supported by one's family (parents, sibling) ... do it. Whater it takes do it. But use common sense. ... there is also EOD Swing Trading, and there are several options masters on the board as well. Best Regards, Jimmy Jam P.S. I work nights at a schlockey highly political job filled with in-fighting and backstabbing ... AND I LOVE IT, because it has allowed me the time I needed to become adept at this discipline (think: CHESS) and will allow me to pay-my-bills while I build-my-stash.
Disagree. No matter how hard people try, there are many people will fail. Some say 90% will fail. If they quit their job, what's going to happen if they fail? Not making a penny, or even losing money. To some extend, the market is like a zero sum game, if there are winners, there got be losers. If you have money to back you up for 6 months, and you decide to quit your job to do full time on trading. It is eactly the same idea as you put all you money in options that will expire in 6 month.s If your options don't turn positive, your entire account will be wiped out. Is this what you want to do? I am not going to quit my job until I can see I make profit every month in 3 years. I have a family to feed.
If you didnt have a family to feed, your mindset would be more gung-ho about it. Naturally, the best time to take the biggest risks is when you're still young, single, healthy, no kids, and no one else to screw over but yourself if things dont' turn out right.
http://elitetrader.com/vb/showthread.php?s=&threadid=77141 Just another reason why you should never stop working, and it just takes one person who decided to override their risk management. So it just does not matter whether or not you have saved enough, because the more you save the higher your risk appetite
By the time I have that kind of money to lose, I'm long gone sitting on a beach drinking margarita's.
You see that's the point, you won't be just sitting there, you'll be thinking about how to buy the beach, and make even more money.
By the way, to go back to elit's original post. Be aware you are most likely in for the most difficult journey of your life. I also got interested back in 2001, while working in IT. I spent a few years reading everything I could find and dabbling around with charts and making small stock trades. I'll share a bit of my journey from IT to trading with you. In 2004, I decided to pursue trading full time. So I wasnt just dont trading, I also enrolled in a masters program in "financial markets", so that I could learn more and meet folks in the industry. In mid-2006 I decided since I could not get into trading firms anywhere I would start doing simulated trading on my own. I'm now in my third month of simulated trading, and was finally fortunate enough to get picked up by a prop house who is letting me do my practice trading using their facilities now. My reflections are this is so much more difficult than IT its not even funny. I love it, but its grueling. In IT, no matter how you perform, you get a paycheck at the end of the week. In trading, not so. You keep what you kill so to speak, and if you end down, well, then your worse off than where you started. And no matter how good you are, you will go through losing periods that make you question what you are doing. After three months at this, I have not turned the corner towards profitability yet. You will likely go through this, and that makes you question your choice about trading even more. Getting profitable means trading every day, and taking detailed notes as to what worked and what didnt and eventually developing a system or a set of discretionary trading setups that have positive expectation in the long run. This takes time, and if you are not training under someone who has figured out a trick to being profitable can take very long, and will be impossible for a lot of people who try. The months/years you spend doing this, you will have no income coming in. In a "decent" IT job in the USA, you'll probably bring in $60,000-$120,000 / year depending on what you do. And good companies also will give you 5% of your salary into retirement, 401K matching, health care, and AD&D insurance. Compare this to trading. If you trade prop, they will put you on sims first, then let you trade real money, but just enough size to cover your business expenses plus a little more(You might bring in the equivalent of $15,000-$20,000 USD annually on your learners stake). Then, once you earn the right to trade large enough to make some decent money, you'll probably be bringing in what you made in IT, but get NO BENEFITS. This is IF you are one of the few who come around the corner and become profitable. Of course, if you are consistently profitable, you can do much, much better for yourself than you could in IT. If you are independent, you will build your account and if you are prop, you will get authorization to trade larger and larger size. So yes, the benefits are there, but just keep in mind what the heck you are getting yourself into. I'd be lying if at least once a week, the thought "what have I gone and done ?!?!?" doesnt echo in my head as I sit on the sims not making money when I used to make a good living in IT. To get to where I'm at, I had to quit my job, sell my house and eventually move in with family so that I could slash my expenses enough to give trading a real shot. So, I do not mean to discourage. In fact I'm happier now in my job than I have been in any IT role I've been on. But I just wanted to give you some insights from someone who's done what you're trying. Best of luck, -T
Just thought I'd chime in on this thread try to offer my .02 to the O.P. Best advice on this thread thus far in my opinion: Trading is and should be approached as a BUSINESS. It is FULL TIME. PSYCHOLOGY plays much more of a role than any "system", DO IT when you're young and responsible mainly for yourself and don't have mouths to feed. DO NOT ENTER THE RAT RACE!!!!!!! In my opinion this is critical. You must be living within your means and not have any unreasonable outside pressures like huge house or car payments. You must have your SHIT TOGETHER and no addictions to feed. Complete individual responsibility for your own actions is a must and anything less is unacceptable. The worse mindset to get yourself caught up in is the one that has you going to the markets to make payments for living. Jesse Livermore addresses this issue in his book. Just read the section about the traders and the fur coat. The markets do not and should not be expected to FEED YOU. A trader FEEDS HIMSELF as a byproduct of his experience, efforts and labor (the same formula for feeding yourself in any "regular" career). Additionally I personally think that a passion for the markets is necessary for success. Immersion in the markets is a must. You will know VERY QUICKLY if you have what it takes to be a successful trader. Do not approach this pursuit lightly and simply as a way to riches. The road to bankruptcy is paved with individuals adhering to this mindset. I find it very interesting that the most successful people I have known have gotten there through their passions in life and not their desire for riches. I have also found that many traders define success in life very differently than the "Average Joe". Independence, autonomy and the opportunity to compete in an unrestrained manner to gain rewards that are not capped by anyone or anything other than one's own self seem to be the universally cherished ideas I have found in most that choose this way. As far as capitalization, much of this depends upon the vehicles you trade, but I will second the earlier poster that stated 50K is minimal and 100K or more is optimal. Can it be done with less? Of course it can and has, but 50-100K should be enough to get a serious effort off the ground. Lastly, if you REALLY WANT this and it's your TRUE passion, you can and will make it happen. Through trading you will find things out about yourself you never knew. If you are truly a student of the markets you will find your success and through that success you may just find yourself looking at the world from a VERY DIFFERENT perspective. Many of the honestly successful traders here will know what I am talking about. Good luck to you and your endeavors. All I can say is that the only person that really knows whether or not you can do this is you. Do you really have what it takes? Who knows, and probably not many here really care, but it's all up to you in the end.
I agree with the business part, but don't make him think that he's gotta sit in front of the computer all day watching every tick if he's not a true day trader. About 80% of my day is watching and waiting. Very few times do I pull the trigger, as most my time is spent looking through the scope .
First, before you even think of quitting your day job and starting to trade, you must read all you can and absorb. Here are a list of Basic Training books. At the end of each book there will be a list of other books for advanced concepts. Dont laugh at the titles. You dont have to buy these books, borrow them from the public library. Here is the list: - Reading Financial Reports for Dummies - Economics for Dummies - Exchange-Traded Funds For Dummies - Futures & Options for Dummies - Investing for Dummies - Stock Investing for Dummies - Stock Options for Dummies - Trading for Dummies - Technical Analysis for Dummies - The Complete MBA for Dummies These books are just the minimum. Make sure you choose a few more books in the list at the end of each of them. After you have finished the required reading, next you have to strategize and mock trade. Subscribe to a broker like interactive brokers and just sit there during a day mock-trading. Scope out an equity or commodity and mock trade. See if your strategies work out and what you would change. Then, when your ready, you should start out with small dollar account of about 25 grand. Start trading using small lots and do your trades that way. Make your mistakes with small trades. When you are done, then its time to move to the big stuff, but wait. I have left a lot out. Its not this simple or easy. You have to make yourself a sponge and absorb all the information you can. There are thousands of variables in the world of the market. So I suggest reading as much as you can at first, then mock trade to see if this is for you. This is a lot more then clicking a few keys on the computer I warn you. Let me put it this way. Go to a musical festival where people are playing instruments like the trumpet and trombone. Notice how easy they make it seem blowing into the horn. Sweet music comes out. Then when you pick it up, only ugly sounds come out and you make everyone cover their ears. I tell you that trading will be that way for you at first. You might lose thousands before you make anything at all. The only correct way to trade is the way you can generate a profit while minimizing losses. Pick up the newspaper and read about the hedge fund trader who lost 5 billion in a week. I tell you that in this profession you can lose more money then you have. Imagine saving all your life just to be wiped out in one day. In 1927, people were jumping out of windows when they got wiped out. Take it slowly and conservatively. I know, work sucks, but take it slow, plan and strategize. Ask lots of questions and only go through with this when you feel 100% comfortable. I hope this advice helps you.