Hey everyone. I love your forum here. Tons of great info and insights. I'm new to this so I'm going to say things that don't make sense. That's what new guys are for; It's our job and we're damn good at it. And pardon the long windedness. Currently I'm reading a bunch of books, talking on forums and I want to develop great skill at swing trading and day trading. An aspiring trader needs time and money. Time to study, to learn, and money to cover expenses. Like equipment, rookie loosing streaks, research costs, normal living costs, etc. So, how do you maximize both at the same time? I'm sure other traders have figured out this problem better than I have, but here are the solutions I see so far. 1) I doubt this one will work. Hypothetically, it would be great to work for some company that is involved in trading, or maybe in the ball park. Meet knowledgeable people, learn a lot, broaden horizons etc. However, I have no back ground in finance or investing. My resume doesn’t looks appealing; my only strength is learning fast and being extremely motivated to understand the job well; learn everything possible about this topic. If i am wrong about this, if there are in deed such options, such jobs, please tell me. Until someone suggests otherwise, I'm considering this option a no go. 2) I expect this next option won't work, either. Work 3rd shift at a job you can study. Like a security guard. Eventually, start trading during day time. But, how long before you save up a trading account of 20k? Probably a long damn time. Some say accounts of 5k and below are pointless. Perhaps that is not fully true, perhaps there is some "angle" to trading which can squeak you by, generate a modest profit out of a 5k account, continue to work a full time job. Continue educating yourself about trading, save up, eventually accumulate a large enough savings to trade full time. Again, I doubt this 5k account "angle" exists, and if it does I don't know what it is. Do you? 3) This may sound odd but it's doable. Semi trucks. 35k to 50k your first year. There is a lot of down time where you are not driving. While driving, truckers wait for traffic to clear up, then listen to audio recordings. Truckers get degrees for online colleges this way or learn foreign languages. Save save save, learn learn learn. Make trades during down time. Eventually, stop being a driver; trade full time. 4) Maybe some combination. Such as first #2, then #3. Figure out what the whole strategy should be while working nights, (although I'm sure the plan will change) after that, if I'm 10K or 15K short of start up capital, go drive a truck until I save the rest. Again, I'm new, and am sure other traders have confronted this issue, have thought up better ways to handle the first two years than I have. Any suggestions? Anything important I don't know about, that would change everything I've said here? Thanks a million
Jake - This type of question comes up very regularly. You can probably find some good advice if you search the archives. If it were me in your position: - Read all you can. Many books and advice can be found on the internet for free. - Start trading as soon as you can and try to find your style. This can take years. I never wanted to be stuck in front of a screen all day so go for a longer time period than day trading. - Use small money at first whilst you learn. You will probably lose most of it. - Save money from your job and put the real effort in when you have a decent amount to trade with e.g. >50,000 USD. Trading with small amounts is not worth the effort and hourly rate IMHO. Try to get a decent amount as quickly as possible. - Dont quit your job until you have large amount and plenty of history. - If you are trading longer timeframes make sure you know what part of the economic cycle we are in and dont fight the flow.
unfortunately its not just a year or two it will take many years to develop a working method, if u will ever be able to develop it (most, if not all, are unsuccessful in their attempts) so realistically speaking u need someone or something that will support you (or at least allow you to fallback) during those many years (may be your whole life) it may be rich dad, sugar mama, trust fund, loving wife with a good job, fat pension, absentee business that you have, etc, etc... if u do not have something like that - move on... its not money that people need to develop a working method (in addition to extraordinary talent, dedication and luck) its time that they need first of all u do not have time
This is only a suggestion, probably not for everyone, so take it or leave it. It's hard to make a living trading when you have little capital to put in and you are likely going to lose some of it anyway. I agree with the person who said to go ahead and start, but start small. However, it may be best if you also learn to do something lucrative in the real world. Don't want to do the education route? That's ok. Making money does not have to be complicated. There are lots of people around my neighborhood cleaning houses or windows or doing yard work for $40 to $50 per hour. There is a guy who paints numbers on curbs for $25 and it takes him less than 5 minutes. There is someone who picks up dry cleaning and returns it at hours specified by the customer. There's a guy who comes to get your car, gets it washed, puts gas in it if you want, and returns it. And a company that picks up food from restaurants that don't usually deliver food and delivers it to homes. And so on: you can probably think of other stuff you could do. The point is, successful people are busy and don't want to do all that mundane crap and they don't mind paying for someone else to do it. However, they do expect first-rate, reliable service. If you hustle to get customers (the hard part), do an excellent job (also hard), and treat the good ones like royalty (not so hard), you should be able to make 6 figures within a year or two. You will not make that driving a truck, at least not as a beginner. Put on some nice clothes and a big smile, go to the richest neighborhood in your town (start with the multimillion dollar homes and work your way down--don't be afraid--they pull down their pants and shit once a day just like you), and start knocking on doors and explaining what you do. Smile a lot and be very upbeat and very humble. Offer to give references about your work and character--you may have to get your friends or family to be fake references for a little while. Tell them what you'll do with the money you earn and why you are working so hard: save for college or to pay off your college loans, save to get married to your sweetie, take care of your sick grandpa, whatever story you think you can say convincingly (definitely not swing trading!). As far as times of day, developing my trading was easy for me because I live on the west coast. When I was working, I did all my trades between 6:30 and 7:30 in the morning. If you trade the futures, you could also trade at night. In general, it's best not to trade when you are tired because you make mistakes.
Whatever you do, don't listen to these guys and wait to save up 50k before you trade. You will likely blow up your first account, don't let that be a 50k account. Make it a 2 or 3k account. You can afford to blow out a few small accounts. You only need a few k to cover day trading margins.
If he chooses to daytrade equities, he needs at least 25k to cover PDT. Drawdowns do happen, if he has some sort of a trading plan, that 2-3k won't last for long and he would have to quit at the first drawdown. He needs to have sufficient capital, just not too much at first. My advice would be to borrow money from either good friends or family AND be prepared to work to pay it back if you lose it all. But do this only when you have a potentially profitable trading plan. You shouldn't really simply jump in and figure it out, you'll lose a lot doing it this way.
just find a job you like and that's realistic to pursue based on your education. be happy doing something you like. trade a bit in your free time, come up with something that suits you and if you ever become so succesful, you can always quit the day-job, but apparently chances are a lot bigger you will never be that succesful. so don't look for a job for the sake of becoming a trader that you'll likely never become, just find something you actually enjoy doing.
OP's story is not unique and anyone who has spent any reasonable time on this board will know how it will end. Question is will he ruin his lifetime earnings potential in the process by forgoing a true career when the timing is right for his age.
As is obvious to most, above, 'option' means a potential strategy. Below, 'option' means calls and puts. Which I don't know much about. In terms of swing or position trading, I’m wondering if options can lower the barrier to entry. Suppose a trader is well educated, great judgment, has a nice track record. They don’t let their greed or fear cause them to do something stupid. But they have an account of 5k or less. The fact that options grant you access to more shares than you have the money to buy, but, if it fails, you only loose the cost of the option, means smaller accounts could earn higher profits. Am I understanding this correctly?