Hi there - long time reader but first time poster. I am looking to get into day trading and learn it over time while keeping my day job, with the hope to switch to retirement at some point and trade as a hobby with $$ benefits too. I would be interested in getting your view in how to best get started - here’s a bit about myself. I am a 38 y/o married man. Both my wife and I are in very secured and fairly low stress executive level jobs, with combined income of $600-750k/yr depending on companies’ perf. We have managed to save enough over the past 10years to be financially independent in the next 3yrs and live off of our invested portfolio (producing 6fig income already). We are planning to retire by 2022 to spend more time with our young children while they are still small. I have - however - always had a passion for the market. I have studied banking and international finance during my undergrad, but ended up doing an MBA straight after college, which got me into a fortune 100 comp in a completely different field. Although I had been trading and investing personally every since I was 19, using both TA and fundamental analysis, I have never made a living from it; only investing my savings and growing a portfolio overtime. Having that passion for the market, I have read dozens and dozens on trading books (inc risk management, psychology etc...) and also developed a (untested) trading system... i also compulsively read CNBC, Bloomberg, FT etc... everyday I am under no illusion that day trading is difficult and will take time to develop the right psyche and method to allow me to hold my own - but I am hoping that not being financially dependent on my trading results to make a good living either now or post retirement, will play to my advantage, as I have no problems only risking 1% of my capital on each position and taking time to enter on the right (to me) set-up. I can also be very robotic and very disciplined when it comes to managing money and business things in general (was a big help in my career). Finally, I have also lost family money in the market in my late teen years, as a result of being reckless and undisciplined with my decisions and investment. This has left a deep scar in me and taught me a deep humbling lesson early on in my life. Mostly importantly, i am super passionate about trading, and will be in no rush to cut corner when it comes to learning. I am thinking of starting with paper trading on IB to get familiar with the TWS station, and start testing my method, with the thought of starting DT with real money on a small account 10k or so - after a while. Eventually I want to fund my trading account with 100k... it should represent only 2% of our total NW, which should have no bearing on our lifestyle should I blow the account over time. My question to you is when will I know when i am ready to switch from paper to the 10k account, and then to my final 100k account. What advice would you have for me to get started in the best possible way? Anybody out there getting to day trading at a later stage of their life? How was it / any key learnings? Thank you in advance
My question to you is are you willing to work? I mean really work. Trading is a like a business. It is not a 9-5 jobs where you are guarantee an income. Sometime you put in all these works and even lose money. Are you ok with that? How long are you willing work instead of spending time with your family, going on vacation, watching tv etc. If you are not willing to put the hours, don’t bother. Just put all your money in a s&p 500 index fund and forget it.
Please don’t say trade. It’s too much work and it’s a job. It’s much better in my opinion to trade a longer time frame. I utilize options on futures. You sound like you are truly willing to learn. I would be willing to help you with your development. Keep an open mind and be willing to learn.
Do yourself a huge favor, do NOT daytrade. I traded for almost 10 years and lost everything. Some people on this board know my story and i shared it honestly with many traders. Just because i lost it all doesnt mean you will but i traded with some smart guys who made a lot only to also lose it all. I know of 2 people who committed suicide because of it. In fact a few guys on this board know these guys as well. Do not do it, its gambling.
Hello and welcome. I am not sure why you chose day trading. I think day trading is best for consistent(relative to other strategies) monthly income, but it's very time consuming. It also attactive to people with relatively small account who are looking for leverage from broker or prop firm. I would think that swing trading would be a better fit for your goals. Another option is Options.
I'm not quite sure how you put it, but I don't think you have any idea how hard it really is. I mean, not everybody makes 6 figure incomes, so you probably must have done something right and work ethic is always part of it...but I can tell you that you have not done anything in your entire life that is so difficult. To put you in perspective: In terms of energy consumption, short term trading is right after professional sports. You work every day 10-14 hours, also weekends and you have to reinvent yourself all the time because nothing lasts forever. It will likely take you 3 years of daily grinding to become profitable and after 5 years you can make meaningful cash. When you're 35+ you're considered too old for many prop shops to even get into trading because it's more or less a 24/7 venture. When you've found an edge you can be happy to last 2+ years untill you throw everything over board and start from zero. Thinking about "retiring" to spend more time with the kids and daytrading is a pipe dream, really. What you are doing now is retirement, the work starts when trading comes into your life. I've done it long enough to come out on the other side of the valley of tears but if you asked me to do it all over again, I'd say no. It's in no way worth the effort untill you're really a freak about it. Your back gets sore, your eyes will suffer, your stomach will go bad from the permanent stress and when it's time for friends and family you have to say No, because you will be sitting in your office to either prepare the next day or review the current day. When you're successfully managing your long term portfolio stick to it. I promise there is much more to enjoy in life than being glued to the screen for min 10 hours per day. You're not experienced, so you're allowed to be naive. But from my perspective your interpretation and evaluation of the job is either hubris or effrontery. Do.Not.Do.It.
I would suggest a mentoring service to learn to day trade future. I can’t recommend one but there are a few in Chicago. Happy to talk directly if you want to discuss either stocks or futures. We offer both but not long term paper trading. My contact info below.
It all depends on how talented or how lucky you are, a few millions, can be profited or lost in a matter of a few months or even weeks, day trade or swing trade.
The quote comes to mind, "He that rides his hobby gently must always give way to him that rides his hobby hard." I think you're ready to switch from paper to 10k when you have a plan that has defined signals, which you are able to clearly recognize, and a method for recording/tracking your strategy results. Of course those results should show a positive expectancy (profitable) over a statistically significant series of trades and series of days. Then, if you decide to start with a 10k account, I would suggest trading 1 ES contract (ES). With a single ES contract, your 10K will basically give you 800 ticks ($12.50/tick) to work with before blowing out. (I'm using ES as the example because it's what I currently trade.) Perhaps set a goal to capture 800 ticks, at which point your 10K will grow to 20k, and then you trade 2 contracts, doing the exact same things you did when trading 1 contract. Capture another 800 ticks and your 20K will be 40K. Now trade 4 contracts (again, using the same method as when you were trading 1 contract).. Repeat this process again and again until you have your 100k. I think if you go this route, IF you ever finally arrive at the 100K level, then you'll be ready to trade that amount. Along the way, you will have survived hot streaks and cold streaks. It's important that you learn to avoid overconfidence or despondency during such periods. Doing it this way will of course take a lot longer than just dumping 100k into a trading account and come out swinging several contracts.. but the learning process will be less expensive, and you'll experience the rough patches without losing any significant capital. Also, You will probably sleep better. Who knows how long it will take you to reach 100k, or if you'll ever get there. Im hesitant to say whether it's the hardest thing you'll ever do, as I don't know you personally, or your inherent levels of discipline / focus.