Need Advice on career change into trading

I am currently exploring the possibilities of leaving my current career and “trading for a living”. I am looking for a change in my life and I have always had a passion for the markets and the idea of proprietary trading.

I have been trading “here and there” for the last three years (mostly equities and options/spreads). I have taken several courses and read more books than I can remember. I use Metastock but I never really get a chance to dig in like I’d want to because I have a full time job that requires a significant amount of time and responsibility. So I have not really developed the plan, system, and edge I need in order to start making serious money through trading.

Here is my background in a nutshell so you understand where I am coming from:

A. I am a successful entrepreneur and CEO of a mid-size professional services firm in New York City and my compensation (which is significant by most people’s standards) is not something that I can walk away form easily.

B. My goal in trading would be to “eventually” earn in the healthy 7 figures. I realize this can take time (years) and I also realize that it may not happen at all. But let’s face it, while most people never reach these goals, there are a few that do - and that’s what motivates me.

C. I am in my mid 40’s, married, with 4 teenage/elementary school age children. (nuff said there?)

D. My formal education is electrical engineering. My jobs have included 3 years as an electronics engineer, 2 years as a technical sales rep, 5 years as a stockbroker (major brokerage firms, training programs, diversified product experience), 16 years of executive recruiting (specializing in financial services). I started and built the company I have today which is considered a leader in its field.

So here are my questions:

1. How many months/years of living expenses does one typically need before they are consistently profitable and able to sustain themselves by only trading for a living? I know it varies but let’s work with averages.

2. If I were to “walk away” from my current career (sell my stake in my firm) and take on a job in trading, what kind of firm might be interested in me, if any? (As a recruiter – I am well aware of the fact that major investment banks and hedge funds will not hire people at my age). I see many people on this forum taking pot shots at prop trading firms. I’m sure many are well-deserved but my feeling is that they are in business to make money – just like I am and just like Goldman Sachs is. The real question is - are there individuals at some of these firms who have come in with no formal trading experience and are now making millions?

3. Am I better off just trading on my own? part-time (while I keep my current well-paid job), until I feel comfortable with what I can do? This just seems like a daunting task, given the competitive nature of the markets. My feeling is that trading part-time is like fighting with one hand tied behind your back. Am I wrong?

4. I know several people who are traders and who are very wealthy. All of these people either started on the floor of an exchange when they were younger, or have come up through the ranks of a trading career at major Wall Street firms. I don’t know anyone who just started trading from home, on his or her own, and became wealthy. Do you? I don’t know any middle age guys who quit their jobs and became wealthy traders. Do you? I’d like to hear that other people have done it and where/how. I’d like to hear that this is possible!

To be candid, I am less interested in a position in which a black box or model tells me when to push a buy or sell button and, while I do have very quick reflexes, I am not interested in working in an environment where split second actions and being a video game champion are the keys to being a successful trader.

I would prefer working with people who value analytical skills, strategic thinking, discipline, decisiveness, and business (P/L) experience.

Ok – so I don’t expect you to answer all the questions - there’s a lot there. Any tidbits of advice from your experience would be helpful.

Thanks,
Venturerider2

 

Do a search, this question seems to be asked every day lately. Just another sign of an oversaturated, played out industry.

Anything is possible, like winning the big jackpot in NY lotto. Reality is that you have expectations that have a very very low chance of being fulfilled. Like you yourself mentioned, all the successful middle aged guys you know started out on the floor or in an I-bank. Those are humongous advantages and provide a huge edge to those who do not have a chance behind the screen. Floors are obsolete models that are slowly being phased out and those easy execution sales trade jobs at the I-banks have been and are still being replaced by computers. Check for a recent article posted in the Wall Street news forum. Hedge funds want trading records or quants (aka volatility killers). I-bank cushy sales trading jobs are near impossible to get without connections. Your choice is pretty much being a retail or prop trader, a very oversaturated industry.

Stick with your successful career and if you want to trade, throw some cash on the side into a retail account and try some swing trading. I would advise against getting into US markets as a full time trader unless you have a serious passion that just cannot be satisfied (kinda like being an artist). I'll tell you this much, even though I made a decent living for 2 years, I now regret getting into the business and wish I never turned profitable. No, I did not blow out, far from it, if you want more details just PM me.

 

man.... if this aint a TRADING BUBBLE

I don't know what this is.... damn!!



this is 100x worse than 1999..


this market seriously needs a power plunge ..amazing

 

i agree that your aiming too high thinking your going to make millions but i make a decent living and theres nothing else id rather be doing then trading

 

you are late to the party where traders made millions ... that ended a few yrs ago or at best the percentage of people who walk in with say 50-100K and walk out with millions is much lower
I even think in Real Estate you would be late to the party same with those crazy poker tourneys
on TV

good luck to you ... hope your have whats more important in life ... a way to be happy and healthy and way to give back to society if possible

- The real question is - are there individuals at some of these firms who have come in with no formal trading experience and are now making millions?-

 

venturerider,

don't think about trading, think about investing, and you can make your millions

but to know how to invest, one must know how to trade.

 

It's really not about aiming too high. It's about aiming at a level that would exceed what I have already accomplished from a compensation perspective. I'm OK with taking a pay cut for a year or two (i.e. making nothing). But I would not be OK with not reaching my full earning potential.

If several of you are saying that nobody earns 7 figures, and if that seems to be the overriding view, then I would most likely not enter the field.

As I said, I know several people who are in this earnings category but they have come from more traditional Wall Street career paths. If the prop trading firms are not producing any traders in this earnings category, that would be interesting to hear.

Thanks.

 

Of course 7 figures is possible, we are talking about an arena of endless possibilities. Is it common in the prop world, no it is not. But that doesnt mean you cant reach that goal. Six figure earnings after your first two years is a start though...

 

hi cool web i know how to trade how do i make the transition to longer term holding or investing im ready to make millions

 

Your full earning potential depends on how you approach your markets,

Just like in business, you know the idiots approach the markets like a mom and pop store.

The ones who make the money approach it with a very innovative method/product/marketing delivery.

You can not expect to drink chicken soup while boiling water.

To make chicken soup, you need to have your special ingredients.