edit- self-employment tax applies only if you choose to create a legal entity for your trading, like a corp or LLC
Health insurance is a definite issue. Let's see how Obamacare really works. No need for a 401k. Almost the same as a Traditional IRA. Roth IRA usually better anyhow. Only negative is no employer contribution. Yeah, like there was one anyways. Self-employment/carrying forward losses. I vaguely remember a talk once where someone made the case not just for creating a trading business, but for actually creating a new one each year. Something about that being a good setup to deal with the impossibility of getting your estimated withholding correct. You are only paying capped 15% FICA on the part that you pay yourself/take-out. If one is trading fairly large, I would expect the ability to treat positions as inventory, carry losses, and estimate your take-home rather than your profits, would outweigh the capped FICA. My 2 cents.
Hello everyone, I`m very grateful for all the good advice that most of you bring to the table based on your own blood, sweat and tears Adding swing trading to my strategy is something that I already had planned to do in the future, but you guys might have accelerated the process. Diversifying with swing trades may keep me occupied and also reduce the pressure to day trade, especially on those days when nothing happens and it is easy to start initiating low probability trades. I have now decided that 2011 is the year that I will take the leap and make it as a full-time trader. My current situation is not sustainable like I mentioned in the original post. I see three things happening and all involves change in my job situation: 1) Work full-time and continue like now until end of March, quit my job and then start trading full-time. I will have savings for 2-4 months. 2) Reduce my working days by two or three, giving me two or three days for full-time trading. Would allow me to sustain a living for quite a while, since I would almost make it on my salary alone. Some savings will help the ends meet. 3) Work 5 days a week, but only 6,5 hours per day, allowing me to start trading (although a little rushed and not allowing to much preparation) 30 minutes after the open. This will give the highest income, but it will still be pretty stressful. If I do fail miserably and lose 50% (my cut-off point), I will humbly resign for now, knowing that I gave it my best. Knowing myself, I will probably not give up completely on the dream, but I will change focus on my career and find something else that I love doing and which pays. It might even involve going back to school this fall. Trading would then be a part-time commitment that will add to my lifestyle and not take from it. I`m just not going to spend more years like I`ve spent my past three years chasing a dream, sitting home on countless weekends reading and studying all weekend, working intense hours, rejecting girlfriends, neglecting family, social life, etc, just to find out 5 years down the road that that I missed out on life. In my opinion, the stake is not very high for me. Low risk and high reward. That`s the trades we`re supposed to go for, yes? If not, I will cut my losses and look for opportunity elsewhere. Thanks for reading! Best regards, Laissez Faire
Never quit a job because you hope you can make money trading. Only quit a job because you *know* you will make money trading - based on either proven success and skill, or an opportunity too obvious and great to pass up. So far you have 2 months, making you a total novice, and you are down $3k, making you a losing trader. You are proposing to trade one of the most competitive, efficient markets in the world, ES futures intraday. Bear in mind that 99%+ of profitable traders and hedge funds cannot get an edge daytrading ES futures, and yet we are supposed to believe that a 2 month piker with a net loss is going to do it month in, month out? In short, you would be nuts to do this. Trade part-time, get more experience, and don't even think of going full-time until you have 6 months of significant and consistent profitability.
Er, what does this have to do with anything? Congrats, you made 6k in a week and a bit (assuming it's a genuine blotter). That isn't going to make a blind bit of difference to the fortunes of our thread starter here.