Hello, I'm an average software engineer making average money (75K). I have been trading on and off in a retail/sem-daytrader capacity for 8 years or so. I hate my job and industry and even quit my job twice before to trade but was unsuccessful due to under-capitalization of my account (I was trying to make 50K a year on a 30K account - sounds stupid in retrospect) I really have a passion for trading and can't think of doing anything else with my life. I am thinking of going the proprietary trading route mainly due to the leverage it can offer me with the side benefit of training and mentorship. Questions I am hoping you'll can advice me on: 1. Which firms have the best training/mentorship program out there? (Will they really be willing to invest their time to mentor someone from whom they stand to gain nothing?) 2. What realistic expectations about proprietary trading shoud I have? (for e.g. how long would it take on average to be successful (assuming my definition of success is consistently making $4-5K per month)). Also, in the event that I make no or very little money for several months, when is it prudent to call it quits and realize that trading is not for me? - 6 months? 9 months? 1 year? Any opinions on this would be greatly appreciated - (My personality is such that I constantly create unrealistic expectations for myself and fail to meet them - that's why your responses to this question would greatly help me in setting realistic goals for myself). 3. I only have about $10K to spare currently. Is proprietary trading the right thing for me at this point in time, or should I work at a job for 1-2 years more (uugh!), save some money, and come back to this later after having $25-30K saved up? Thank you in advance for your help and opinions. - Umang
I feel your pain. Trading is not easy for anyone, but the key is to be in the right mindset. I traded most of my life,mainly for a big firm, then traded on my own for two years. I was very successful up until last year so I packed it in. You might say why? because you had one bad year. I felt my attitude toward trading had changed because my responsibility changed, (mortgage, kids etc). I started to trade scared which is one of the biggest mistakes a trader can make. This is an easy obstacle to overcome if you choose to. So, I ask you .What is your situation, can you afford to (mentally) quit a job you know well and give up that steady income and MEDICAL !!.(thats was a big one for me with a family). If you are dedicated and passionate about trading you can succeed. Good Luck.
I am tired of trading for a living and really want to get into practicing medicine. Is there a place I can spend $500 and be allowed to perform surgeries and treat real patients with major illnesses? I want to get paid really well each month even though I am a beginner and want to skip the big costs of medical school and really want to be a Doctor immediately. Not too different than what you are saying. Sounds ridiculous only because trading has no barrier to entry but it really is the same thing. Once you fix your perspective on reality, come down to earth and accept the fact that you have a steep learning curve, will lose money in your "education" and will have some good months and some bad months and need more capital, you will truly be in the right frame of mind to start the journey. The biggest reaons why people like you fail is false expectations and a lack of understanding of how difficult it is. If you want to avoid that path of failure as best as you can, slap yourself in the face with reality so it is perfectly clear and brutal and you can assess the situation from a risk manager point of view instead of only seeing the mirage of gold coins and jewels at the end of the rainbow. You need a strong foundation before you can pour the cement but you are already asking about the wood paneling in the penthouse. Start from the beginning and the bottom and give yourself 2 years.
You shouldn't trade at all period. You think grass is greener on the other side Your engineering job pays $75k relatively headache free, risk free, while you probably can't even muster up $10k in profits in trading with no guarantee of any paycheck. Grass is not greener on the other side. "Daytrading" profitably is a GRIND, its not a fun job.
Sounds like you tried to trade full time and took losses if you had 30k before and now only have 10k...?? It's a numbers game and you got to be honest with yourself and forget your expectations. If you tried daytrading and couldn't pull in enough to sustain your lifestyle what makes you think it'll work next time?? Listen you can blow out your account 10 times thinking you're smart enough to get it right next time... but by then it's a struggle to break even after months or years of losses. Folks think they can ease into daytrading like it's possible to take little or no risks and end up flat at first.. no way!!! especially if you're trying to double your account in the short term. When you take that loss it's time to reavaluate.
How long would you last also depends on your "Burn Rate". Let's calculate your burn rate... you are making $75K, right?... but only can spare $10K? Where did all the money go?
Consider the following: Move to silicon valley (if you're not already here). Get a software job - very easy today. Good SW engieers get $95k to $150k depending on skill and personality. Markets open at 6:30 so you can get at least 2 hours of trading in every day. Do this until consistently profitable or you cash out with stock options from your employment.
No need to continue "over-complicating" this whole trading business. Think of it as any other business...licenses required (as in the Physician analogy above), some education, good relationships with others who either are, or have been successful, dedication, and yes, Hard Work...(whoda thought that those who work harder seem to make more money trading, LOL). Barrier to entry,' if any, is studying for a couple of weeks to get licensed so that you can have access to the capital necessary to actually engage in the practices that work rather than catching the falling safes like so many of the masses tend to do. Do I seem bias, of course..but my family has worked on all sides of the business since the 1970's, and have tried to take the best parts of the business and put them to practice...and I honestly feel that our record speaks for itself. Our active traders numbers are higher than they've been for quite a while. Sometimes you gotta just go for it (after proper due diligence, etc. of course). All the best, Don