leaving a paying job to day trade-experienced day traders please help

Discussion in 'Professional Trading' started by xdiesel123x, Aug 14, 2009.

  1. I have been studying technicals and the markets for 6 years. I have paid for my school of trading.

    I have worked at a major financial institution where the minimum comission is 100 for 4 years and so swing trading and trading in general is a waste of time unless you are trading for more than 20,000 and I do not unless for clients.

    I have been practicing paper trading intra day and am very confident I can make a living.

    I usually practice trading while in the middle of talking to clients or doing something and I have 1 question on that. So I am thinking I will actually do better with my only focus on trading when the time comes?

    I can use the chart and the bid ask spread and action to kind of get a guage for the stocks direction

    Also I have three strategies that work for me and I have been paper trading them along with postion size strategies and averaging in and out of trades. I started scalping for 10 cents and thats it but as I got comfortable I have been letting trades ride for longer .25 or .5 cents. I am also pretty good at taking losses (mostly because where I trade if the stock trades much further below or above it generally means the trade is not going to work so I look to exit immediately)

    My question is that armed with a strategy and having spent time keeping records of my paper trades including commissions and having positive numbers(legit) is it possible to make decent money the first year out?

    I hear about people coming out of college or with no experience losing their shirt. I just cant see this happening to me...especially because I have traded stock in my own account and others and know how to emotionally lose money...


    If you've only paper traded then I think you'll be in for a rude awakening when you start trading with real money. With $$$$ on the line suddenly your emotions become a part of the trade, from euphoria where you have a winning trade to anguish and panic if a trade is going against you. In time, if you survive you'll be able to manage your emotions and whether a trade is going for you or against you'll you'll remain relative calm and composed. I started trading full time almost 14 years ago. Before I left my job I traded real money for 2 years, in part to insure I could make (real) money and to make sure I'd enjoy it. So I'd highly recommend that you do some trading with a funded account before leaving a salaried position for full time trading.
  3. Thanks for the imput. Unfortunatley it will be impossible for me to day trade with real money. I can only swing trade for real money and I am good at that. The only reason why I dont make real money doing it is that the fees are 100 dollars or so each way to trade and I simply cant buy enough shares with my bp for it to make sense.(that doesnt even figure in for the restrictions) For my clients; I make them money on 70% of the trades and know when to take losses.

    How long did it take you trading full time to know whether or not you could make money?

    I will have 6 months of living expenses, trading capital and will use my credit cards for the second 6 months if I have to...I can get a part time job if I need to at nights to help pay the bills

    is that enough? What do you recommend

    any other help would be appreciated
  4. 6 months is too little.. you might wind up in a car accident or something.. save up at least 1-2 years, 3 years would be best

    another way if you cut down your expenses in half you now have 12 months worth of expenses. be creative but never dumb. smart money cleanses dumb money every day.
  5. xdiesel123x trading full-time and with real money is a very different thing than what you have been doing. I would advise you to make sure you have 1 to 2 years of cash put away to maintain your lifestyle, prior to leaving your job. Maybe opening an online trading account and funding it with real money and growing it to an appropriate level, that you could live off of it for at least a year or more, is a good place to start. You can do this while keeping your current job.

    Most importantly do not expect to make significant money during your first year, unless you can find a successful trader to mentor you. You might end up being one of the exceptional people who make money right away, day trading full time, but it would be unwise to plan around that unlikely outcome. Your odds of success increase dramatically if you can spend your first year learning to trade real money successfully, by developing the necessary strategies and discipline, rather than trying to make enough to pay your bills.

    I have worked as a prop trader in the past, and lack of sufficent savings really, really worked against me.

    I currently work at an online brokerage firm and deal with lots of retail day traders on a daily basis. The retail traders often begin their day trading careers by funding their account with $50k to $200k and get intra day buying power of 4 times their equity. The problem is that on day one they begin buying 3000 shares of RIMM or something, when they should be buying 100 shares. They are trying to make good money immediately... using strategies that seemed to work when they were paper trading. Within 2 weeks to a month they are usually having PDT violations because their accounts have fallen below the $25k minimum equity requirement for pattern day traders. Now obviously prop traders do not have to worrry about PDT violations, but they can fall victim to blowing their prop accounts out if they trade too large a size before they learn to become good traders.

    Once you begin trading full-time you will likely change the stocks that you follow and your strategies several times over and while you are going thru this refining process it will be beneficial if you can still afford to have a life.
  6. maxpi


    Have you learned programming? Chart packages like Ninjatrader, Sierracharts, Tradestation, Multicharts, etc. can all be customized by somebody with a modicum of programming ability.. people that can write their own indicators are sometimes pulling ahead of the pack and you can fully automate a strategy with all of those...
  7. Good stuff...I appreciate the imput.

    Let me tell you about my strategies and how they have progressed....maybe you guys can tell me how far along I am in the training process.

    my bp will be 250,000 to start

    using candles ohlc moving averages and round numbers macd and bollinger bands

    my goal is to make 500-750 a day...(goals started much higher)
    lose 200-400 per day...

    my win rate is about 6-7 out of 10 days and sometimes even 8 or 9 days out of 10.

    I began with only a moving average strategy. Where I would wait for stocks to come back to their 20, 50, 200 ma 50 ema and try to scalp for .1 on a 4000 shares essentially using all of my bp.

    I tried this for about a month and would make winning trades more times that losing but lost more $ than made.

    I learned that; that was retarted. That using all of my bp on low risk high probability low pay out trade was just stupid.

    I continue to use the strategy of moving averages but also started to incorporate another....the punch out trade and started to learn how to manage my position sizes.

    on moving average trades I woud only enter 25% of my ulitmate position all at once. and my trade size is not to get higher than about 20% of my bp.

    on punch out trades they are not to get over 25% of overall bp

    Ill use amzn as i trade it frequently for an example of punch out. on friday 8/14/09 at 11:30 amzn broke a low for the day(or punch out) normally I would short the first rally but this time it had a round number below it and when it respected the round number i stayed away from the short. I waited and around 12pm it broke under 83 and so on the first rally i shorted it around 83.15 1k shares i would look to exit immediately if the stock got to 83.28 so my loss was defined at about 130. the trade went in my favor and so i covered at 500 83.05 for .1 cents and another 500 at 83.88... normally i would have been looking to cover at 83 the whole number but the bid ask pushed right thru 83 so i was confident there was more in the trade. The stock subsequently went lower than its low for the day again so I thought it may go even lower so I shorted the first bounce and did so at 83.9 but i did not want to risk a lot so I only did 500 shares. i wanted to test the water. The trade went against me but i knew that if the stock went above 83.19 i would exit. and my loss would be about 130 or so and so i left the trade on. when the stock held 83.19 i decided to average in at 83.15. so my average cost was around 83.02. the trade went in my favor but i did not cover the first time i watched the trade go all the way back to 83.19 and i would have covered if it printed 83.2 but it did not...this time i covered 500 at 83. for a small profict and the other 500 at 82.80 and 100$....

    I have one other strategy that focuses on support areas like a recent take of or break down on the chart or even gaps- but I think you get the point. I try to buy in areas and size where my loss potential is clearly defined around 100 and my profits will be 100 or greater.

    any additional imputs on my defined loss size and potential profit would be helpful.

    considering my amzn trade and what is going on in my head before during and after the trade...how far along am I?
  8. no but i will look into it...what do you recommend from your trials?
  9. Arnie


    Whatever you do....DO NOT QUIT YOUR JOB.
  10. +1. Poster needs to learn the vast difference between "confident" and "I have a serious edge that will last for years, top money management skills, an and a very large bankroll." Most traders do not know the difference between this, and the 95+% who fail.

    Idea for him, 100% of newer traders are convinced they will be in the 1+% of truly successful traders.
    #10     Aug 15, 2009