I miss trading, which is why I probably lurk around here even though I've already moved onto another career. If you can succeed during these times, imagine how well you'll do when (or if) it becomes a better environment to trade. I traded for almost 8 years and did well for myself. I spent the last year and a half treading water and dipping into my savings. I didn't lose money, I just didn't make any, and lost the opportunity cost. I definitely miss the lifestyle, but FOR ME, I couldn't imagine continuing to live in a state of flux, not knowing whether or not I'd make or lose money in any given month, let alone any year. During my first few years trading, we traded in 1/8th's (NYSE equities). It was like printing money, it was so easy. Then when we switched to 1/16th's, all the old timers thought that it was the end of daytrading. Most people were able to adapt because it was the late 90's and the market was crazy. Then in 2000 we switched to decimal's and margins shrunk even more, but now instead of having the volatility of the 90's, reality was setting into the market and everything began slowing down. Nowaday's as soon as a news story comes out, every daytrader is in a mad rush to be the first one in, and it's basically survival of the quickest, and fittest. It's like a passerby tossing some crumbs to a large group of pigeon's. Not to say it can't be done anymore, but I think the odds are much more stacked against pursuing a successful career daytrading now, than at any point in history. Like I said earlier, there will always be people that could succeed in this environment, but unfortunately I wasn't one of them because I definitely do miss it.
Nice post. So what do you do now, if you don't mind me asking ? And if you don't miss the equity swings, what is it that you do miss ? Having had a fairly successful first year in full time trading, I am now finding things tougher with the result that I am having to use the excess profits from last year to stay afloat at the moment. Did you always have a cut-off point in mind when you made the decision to quit ? Did you tell yourself you had to be profitable in every consecutive year ? From being an order clerk on the floor of an exchange in my late teens, I have been simply passionate about markets ever since. I spent 10 years out of the financial business, but decided to return on my own account 2 years back when I realised that I love all things 'market'. But for my part, although I have this fascination for the job, I do think there are many unhealthy aspects to leading such a solitary, emotionally taxing lifestyle. I am trying to think of ways I could diversify in a way that would not only allow a different, more secure part-time income stream, but also more social contact with the outside world. Ideas ?
Social contact is a very important point. I'm sure that the "be your own boss" aspect of being a trader is a fantastic selling point, but one that needs to be counterbalanced against each individual's need to interact with other humans. I can't believe I'm going to give this endorsement, but perhaps you might consider taking your business to one of those insidious (j/k ) "professional firms" -- and thus be surrounded each day with like minded "professionals"?
Proptr8tr, before you quit did you ever consider doing other kinds of trading besides the stereotypical daytrading of quick ins and outs in stocks, ending each day in cash? Trading is trading and the more I read and learn, the more I realize that there are just so many ways to make money in the financial markets. People whose only idea of trading is scalping nyse and nasdaq stocks all day are looking at the markets with blinders on and missing out on a lot of opportunity. Of course pure stock daytrading is lucrative for some, I'm just saying that if that doesn't work for you, don't just throw in the towel on the trading business, but search out other ways to make a living at it. Different instruments, different markets, different timeframes, market making, arbitrage, etc. The financial markets are huge and listed stocks between 20 and 60 dollars doing over 1 million shares a day comprise only a small sliver of it, yet that's all anyone wants to trade then they complain about how competitive the market is and how there's no opportunity.
Years ago I started buying rental property. Mostly single family homes and small apartment buildings. At the same time I rehabbed some properties and resold them. The real estate to me was a business. When I first started I was just trying to create an income, I was not counting on appreciation in the real estate. As it happened, over the years, the real estate has appreciated more than I would have imagined, and the income has grown. It gives you various outside contact with tenants, contractors, suppliers, etc etc. Understand that it's a business. You can't buy just any property and make it work. And undoubtedly, it would depend on where you live. All areas are not the same. The real estate does not take all that much time...so it combines well with the markets. OldTrader
Well I have to really agree with this one, but perhaps your (Proptr8tr) perspective is also a good one. I have been trading, yes, professionally (I mean that in this context to say in a true proprietary sense) for most of my career. And most of that was with a small "boutique" firm. We had one (1) ONE strategy, and between the time that we had one approved strategy that began not to work and the time that it took to come up with other ones was a dark day for most of us financially. However, having past through that, I can say that I know it can be done, and now I have the confidence to do it next time. Perhaps Proptr8tr values certainty and security more than whatever it was that I valued, and I think in some respects, initially, it seems a very healthy way to go. I had a belief, which I still have, that basically says I will either find a way, or make one (credit Hannibal (the guy crossing the alps, not the beloved character from recent films)). This doesn't mean to say it was easy or without trepidation. I know sometimes it may have been easier on my family or friends if I choose other things at some point. However, I am also considering that in addition to having a currently appropriate strategy, how much of my evolution during that time was also what some would just call "self-discipline" and flexibility in my beliefs and expectations of the markets?
lescor... excellent post. As always, you are right on the money. Thanks. Btw, I now you are short 10K block at least in C from 3-5 days ago. Nice job!
Mr. Charts on this forum http://www.trade2win.co.uk/ posted his charts LIVE for a couple of months this year, making around $1000 USD a day... Have hope all Is not lost, your style maybe out of date, but others are winning !
Since I never daytraded while they were in use, what was the advantage of fractions? What made trading then "like printing money"?