I've read many of the threads on here for the past few weeks and thought I'd ask for some advice. I'm a 26 year old Equity Research Compliance Officer, and fed up with working the 9-5 (more like 730-530) corporate job. I have thought about giving it up and trading full time for the past year now. I even had 2-3 phone conversations with a guy from SMB last year about trading with them, but it just wasn't the right time. Now, I have gotten married and have a little more capital under my belt. My wife makes decent money ($75k-$80k), and I have about $20k in capital to put up to trade. I also have the Series 7 (and 9/10, 24, 63, 87 and CMT levels I and II) and have been practicing day trading on a simulator that uses real past data feeds (I know it's not the same, but that's the best option I have at the moment). Unfortunately, with working for a full service FINRA broker/dealer and being in equity research Compliance, my personal trading is very restricted. Commissions are $34.95 each way and I have to hold most stocks for 30+ days. This has not allowed me to practice my preferred intraday strategy with real money, but I do well with what I can do. I am strictly a technical trader and have done a lot of self-study over the past 4 years. I do not consider myself a novice. My question for you all is this, with my background and situation, do you think I should put up my $20k with some prop firm that will leverage me up 5-10 times or wait until I can raise some more capital and just do retail at Interactive Brokers with PTD 4:1 leverage? I am not really interested in these training firms that charge thousands for a course and then may give you firm capital to trade with. I just want to trade. If I do it for a year or two with my wife helping to support us and lose it all, well then I am confident I can go back into Compliance with my licenses still not expired and resume my depressing, boring career. I am very entrepreneurial and want to control my life, not have it controlled by some company. Is it crazy to think a person can make $40-50k a year starting out with $20k capital? With $100k in BP, making 1% a week doesn't seem unreasonable, but I know 40%-50% annual returns take some serious skill. Any help you can give me to help make this a reality will be greatly appreciated.
you are thinking of depositing $20k capital and you have never traded live? are you nuts? how about deposit $3k with a prop firm, negotiate $3 per 1000 commissions and start trading 100 share lots. try and find a prop firm that has trader interaction where you can learn from the long term profitable traders. learn to walk before you can run. my 2c.
Assuming you have placed a reasonable number of trades -- say 100 -- and overcome the punitive $35 commission rate you are paying what you are suggesting is aggressive but not insane. if it has almost all been trading on paper with only a handful of live trades then you are pushing the envelope a few steps too far. Good luck. You sound like you are willing to do the work and do not think you will be overnight rich and that gives you a small (but real) advantage over most that start out.
At the age of 26, you'll give up a stable job in a stable field to gamble away your life savings? Odds are you will fail, be out $20,000 and jobless (in this economy). If you really want to enter the trading world, try to get a junior research analyst job within the group you are auditing. After three years of hard work you will learn how to value companies and can get a job at real firm trading other people's money. Over time you can become a PM at a real firm. All the while you will be enhancing your skills, becoming more valuable, and generating real and stable income. The prop shop door will always be open to you if you have a few thousand dollars to put up.
you are no fun. the guy is 26, I say save up a bit more money and then try out trading for 1 year. give yourself a chance, start small find and work with profitable traders, even better if you live near a large US city find a prop office to work from. If it doesn't work out just get back into the job market, tell your new employer you went traveling for a year.
Thanks for the responses so far. I should probably explain a little more about my trading history. I do have 4 years of equity trading experience with live money. It's just been more of a swing trading strategy due to my full time job and trading restrictions. I have also traded Forex for 4 years on a shorter time frame (1-5 day holding time usually). I'm not going into this never having traded at all. A large part of this is also wanting to just trade and not be working for some company. Yes, I could try to become a junior fundamental analyst at some point and work my way up to being a PM at some firm, but that's not what I want at this point. I want the freedom that daytrading your own account brings. I'm not a naive, novice that has placed a few trades. I have 4 years of successful trading history, and now I want to transition that into trading on a much shorter timeframe. If I fail, I'd rather do it now at 26 with no kids and a wife with a good job that can help support us. I also don't think I'd have any trouble getting another job at my current firm in a years time if I needed to. I would have the licenses, experience, and connections.
u are a former compliance officer and u don't know if u should put up $20K. What kind of a compliance officer are u?
It's also less of a question of "should I do this" as it is "how should I do this." I'm really looking more for the advantages/disadvantages of prop versus retail. The secure job I have may seem like a good deal, but I hate it and the two hours a day commute it requires. I'm occupied from 630 in the morning until 630 at night in a job I have no passion for. I am going to quit at some point and trade. That has been a given for about two years now. The question is the timing and "the how."