The trading learning curve for most can be quite incompatable with the wife, 2.3 kids, house in the suburbs and golden retriever. If you want to learn to trade, I recommend you do it now before you get all tied up with the house etc. Take the advice of some of the wise people on this list and try out trading on 25+K. You don't risk all you've earned and you find out how it feels to lose money. Some handle it fine and some don't. JB
No need to trade 10 shares lots. That's silly. 50 or 100 shares is fine, 100 is less hassle, and easier to move in and out of. And be careful, you may not be able to exactly reproduce results at that level with 1000 share or more lots. Why? You are accessing prices at a very low liquidity level. Once you have to execute more shares, there will be slippage. Not much on high volume stocks, quite a bit on low volume, wide spread stocks.
topguntrader, You've got a lot of excellent advise here on this board. I have learnt a lot from these contributors myself. Here are just my thoughts. First off, I read that Jeff Cooper said somewhere that one shouldn't trade around life's major events. Buying a house, quitting a job, getting married, these are important events in your life. And I'm not sure it's a good idea to trade in the midst of all such (proposed) extensive changes in your life. The more I trade, the more I realize that my trading results are affected not only by these major events but also by whether I am leading a well-balanced life. For instance, my confidence in trading would suffer if I wasn't socially active for some time. My wife is working full time;I am working part-time and taking care of my kid part time. (My wife is open-minded.) I was not working this past summer and trading full-time, but the results were worse than they are now. Trading full-time often forces you to overtrade, which is one of the cardinal sins committed by a novice trader. In short, ask yourself: "Am I leading a balanced life?" If you aren't, your trading will suffer. Second, one book I read in March 2000 has completely changed my life, particularly the way I look at money. It's by Robert Kiyosaki entitled Rich Dad, Poor Dad. If you haven't read it, buy it and read it. It was on NY Times Bestseller list. It's not a book about hot tips on making money. It's about changing your mindset, the way you look at money. I believe you've been an employee all along your life, correct? As an employee, you look for security. But as a trader, you are running a business. Security is gone. There is more freedom for the trader, of course, but the price to pay is your security. Can you live with that? If you can't, you need to think twice about trading full-time for a living. In any event, read that book. Looking back, I'd say I'd be willing to pay 5 times the price of that book. Sincerely, stockoptionist
Topguntrader Thats one of the oldest tricks in the book during recession times at big companies. Instead of firing an employee, they try to frazzle your nerves so u quit, saving themselves big bucks on unemployment insurance. I've heard this same story from at least five people in the last month!! Quite possibly your the highest paid employee in your department. Especially in these times, if your the highest paid person in your dept. , they coouldnt find a better time to replace u with cheaper help. As for as trading goes, the stock market will be there tomorrow, it will be there next month and year after year. 80 k jobs are hard to find. The average person makes around 12 bucks an hour. I worked 14 years at jobs i hated. I started trading full time when i turned 36, that was 5 years ago, at the beginning of the bull market. Man it was ez back then!!! If i started today i dont think i could have made it. Sterling
There has already been a lot of great advice here on the trading and financial aspect of your decision, so I will leave that alone. I totally agree with the poster who recommended "Rich Dad, Poor Dad" by Robert Kiyosaki. That book was a life changer for me. In your initial post, you mentioned a serious girlfriend, and you mentioned marriage and a house. Are the marriage, mortgage and 2.5 kids likely to happen with this lady? Does she understand and support your dream to trade? In my opinion, that is the primary consideration. If she supports you, then you have tremendous flexibility in how you approach your new trading business. Financially and psychologically, there are countless advantages that you will get from a supportive spouse. On the flip side... If she does not understand what you are striving for, you will have a very, very tough time. My recommendation would be: 1) Keep your job as long as you can. Squeeze every last dollar out of them 2) Squeeze even tighter on your budget to put away the startup capital for your new business. As others have said, you have plenty to start trading. What you need now is the security that comes from having 12-24 months of expenses sitting in the bank. 3) Educate your girlfriend about what you want to do. Dont' blow sunshine up her butt. Give her the straight facts about the failure rate for traders, and the reward potential for those who "make it". After you read "Rich Dad, Poor Dad", have her read it also. 4) Investigate ways to supplement your income while you climb the learning curve. Even if you have plenty of ready cash, a reliable source of income helps greatly to offset the psychological blows that come from your learning-losing trades. Good luck. -Jeff
...have given you some of the best free advice you will find on the net. In addition you should read the huby's story on the thread 'my story' http://www.elitetrader.com/vb/showthread.php?s=&threadid=1670&highlight=my+story+15 You need to be prepared for the pain which goes with the pleasures of trading.
It's hard to say what to do without knowing more about your situation. How's your financial status? Could you take $25K, give it to someone else and not think about it? Then could you quit your job for a year and live a lifestyle that would be acceptable to you without income? Then financially, you may be ready. You may need to do this. You may catch on quickly and not need to. How's your family support? If your girlfriend (wife-to-be?) on board with you taking this risky path? If not, and if she won't be ok with the financial situation above, you'll have a tougher road. If you don't get the support you need at home, it could be the thing that could prevent you from being a successful trader. About that house. Again, how much do you have? Can you put up the $25K, a year's living expenses and then some, and have enough left over for a down payment and closing costs on a house? Then, most experts say owning is better than renting and you should get it now while you can qualify for a loan (and rates are still pretty low). You may not be able to afford that "perfect" house/neighborhood yet, but you can get that later when you're successful as a trader. If you don't become successful as a trader, you'll have bought the house already which is good because you won't be able to qualify for a loan at that time. Where do you live? If you're on the west coast, I know a number of people that got their start trading the open before work and the close during lunch until they were able to go out on their own. I started on the east coast that way with a flexible schedule. This could allow you to "ease" into it. Just make sure you take as many weeks off as you can to get some focused training before you start in. A key thing is the mental aspect of your money situation. If you're going to worry about every losing trade, then you're facing a serious uphill battle. At age 21, it's not a big deal as you have a lot of life to make up for it, but at 31, you start thinking about things like a home, family, etc. and the idea of losing and starting again doesn't play favorably in your mind and therefore affects your trading.
If you donât take risks you wonât have anything in your life. I strongly believe that there is nothing better than working for yourself and trading is the best way to achive this aim. Reread Market Wizzards. Tom Baldwin is an excellent example of someone who made it with $25,000 in hands a pregnant wife and no knowledge of the markets. This guy is great he believed in himself worked hard and made 1 million dollar in his first year of trading. If you read the amazing life of Jesse Livermore, there is a guy that was a great speculator at that time named Cutten. This guy made some money and learned as much as he can about trading in 5 years. One day he went to his boss office and told him he wanted to trade for himself. Hi boss said to him : youâre a fool. Avoid the market avoid trading and you will thank me for it later. Nevertheless, Cutten came back and resigned. He said to his boss, âI expect I will never work for another man for the rest of my life.â 12 years later, at 37, he was one of the most powerful financier in WS. Those guys are no different from the rest of us. They believed in themselves and took the risks. You have enough money and if your girl friend loves you she will understand. But one thing is sure nothing is easy and there is no free lunch. If you want to make it, you have all what it takes the capital, todayâs technology is great and you just need the courage to do it and work hard. If you do not have the required qualities the worst that may happen to you is to work again for another firm. I am sure that within 1 to 2 years America will be back on track. Think of the first immigrants in the US, think about poverty in third world countries, think about all those guys that have no degrees, that are sick etcâ¦. Certainly this is your choice, but donât find excuses. If you really want to make it, you will make it. You have all what is needed to make it and if you loose everything, so what⦠this is not the end of the world. Good luck
I just read hitman story http://www.elitetrader.com/vb/showthread.php?s=&threadid=1670&perpage=6&pagenumber=3. This is a great story. It was real hard for him in the beginning but he kept doing it and even if he is not millionnaire, making 40k since the beginning of the year for somebody that is just starting is not that bad... « The key to succcessful trading is to feel like a winner even though you may be temporarily losing, representing the loss as part of an overall process of confidence and competence. » Robert Koppel, The innnergame of trading.
topguntrader, maybe it's time to figure out if she is "the one''. If she is, she will work and support you while you learn. If she isn't - she won't. My wife fully understands that switching to a trading career is a longer term proposisiton and that the rewards won't be visible for a few years. Her support has been extremely important to me. Maybe it's time to shake the tree and see if the apple falls off or hangs on