I could absolutely do that and that was really the plan. After the unemployment ran out, I'll see where I'm at. If I am profitable and have grown my account past the 25k for pattern trader status, then all systems are go. If not, I would get a job to support it. Unless of course, I was totally blown out of the water by then. I like the attitude that anything is doable. That's how I feel and having odds stacked against me just makes me want it more.
Are you profitable in simulation? If not, do that for at least a month before attempting real money. I did the same as you 2 years ago and broke even (prop trading NYSE). The pressure of making money was too great and my emotions got involved. If you can't stop, sit down and patiently and *honestly* papertrade for a month or two to work out a profitable strategy first, you will likely not make it with real money on the line. After a month or two, armed with a good plan, you'll have 2 or 3 months to trade 1 contract/100 shares and work through the psychological issues of sticking to that plan. Hopefully in 5 or 6 months you can step up size a bit and starting bringing in income. I'm planning on doing the same thing again soon. This time I'm averaging 3+ ES pts/day in simulation (3-4 trades/day). I'm also adopting the rule: "If you lose two trades in a row, it's back to the simulator until you have two winners in a row." (paraphrased from Buffy at dacharts.com) Good luck.
I'm looking for a job filling orders at a brokerage while sharpening my skills as a trader. In the meantime, trying out my trading skills on a simulator sounds like a good idea. What are some good simulators to try out? Are they free to use or are there fees involved? (By the way, if anyone knows of any brokerages in Toronto that are hiring, let me know.)
Are you sure you're going to be able to collect unemployment? I also received a large severance but am not allowed to collect unemployment for over 1 year from the date of the severance!
I'll just say that trading for a living will be the toughest challenge that you will ever face... Being laid off is an emotional enough experience. Trading under the best of circumstances is a tough business. You will be challenged emotionally like never before. I was laid off from my job in January and started "trading for a losing..." Oops, was that subliminal? No it's fact. Trading is a tough game and you will be jumping in at the deep end. Unlike other ventures (sports) ... there are no minor leagues. You are swimming with sharks my friend and they show no mercy. You have to have capital to trade in additional to savings/income to live. If you are counting on paying bills from your trading account... you are done before you begin. Also, if you have a series 7... go prop. Better leverage. Good luck... I am in your shoes, laid off, family, bills, dreams... One more thing... make sure that your wife has a complete understanding of what you are prepared to risk. You don't want to lose all your money and your wife, do you? Have you considered Internet Poker?
Excellent post, Durango. New traders who are attempting to quickly earn a living are up against the strongest barrier of all, and that's their emotions. When you are attempting to support yourself - not to mention a wife and children - it is impossible to ignore the emotional impact on trading, and it is always to the negative. Bad decisions are made, leverage is overdone, trades are pulled too soon, etc. etc. Add to that a lack of capital and a ticking clock, and you have a recipe for disaster.
I realize that trading is a tough game and it's not to be taken lightly, but I don't think it's the same as gambling; especially not internet gambling. From what I'm told, if you prepare yourself extremely well, have an aptitude for trading, and have the discipline to remain focused, you'll do well as a trader.
I think it will be difficult. Depending on what you're trading (ES for example) be prepared to lose money for at least nine months. And be prepared to lose $10-$15,000 in trading tuition.
Like a good friend told me before I went out on a limb during the dotcom era: "You'll never know unless you try" I would, however, be cautious. You have until April, so if this were me <begin-opinion> I would gun the savings now. Start with the next paycheck. First, try to gun down your debts. Second, try to throw as MUCH into savings as possible</begin-opinion> Wish you the best of luck, and hope to see you post a journal once you begin trading if you choose to do so. -cj