What would you do?

Discussion in 'Professional Trading' started by Gratitude, May 18, 2008.

  1. Gratitude


    For the past 7 years, I have been wanting to learn how to trade. I have read 100's of books and gone through the usual cycle of trying a near infinite number of indicators. However, I have been doing this only in my free time as I've had a full time career and a family.

    I have come to realize that most books out there are of "limited" use, as are most indicators. Over the past year or so I have been increasingly focused on learning price action and have focused on actual price behavior to frame trading opportunities.

    However, given my career + family commitments, I am only able to focus on learning price action during the limited amount of free time that I have. I feel that this is very ineffective - as I will often start to get a feel for something only to have a surge in activity at work and have to break the momentum. Additionally, I can usually look at charts only after hours or on weekends.

    I want to decide if I should quit my career / take a leave of absence and focus on trading full time.

    Just thought I would get guidance from others in the community who have been there, done that!

    Some additional background to frame the decsision:
    - Currently 34, married, 3 kids
    - Both my wife and I have make a very good living
    - House and kids education paid for
    - Retimrement mostly taken care of (depends on your definition of retirement)
    - Could support current standard of living for ~5-8 years without any income just based on savings (if both my wife and I quit today and had 0% return on our portfolio)
    - If I continue at my current career, income in next 5-6 years will reach $1-2M/year; doing very well in terms of trajectory
    - Currently working 70-80 hrs / week with significant amounts of travel
    - Have MBA from top 10 school
    - have ~$0 debt

    Of course, I've tried to tell myself that I should just focus on my career but I just can't seem to get the trading bug out of my system. Luckily, I've done a lot of testing to already know that indicators etc don't work without losing any significant amount of $. Also, feel like we've gotten ourselves to a low risk situation where my wife can continue to work and we have no debt.

    Would be helpful to hear from others to see how you think about such decisions.

    PS: I've read ET forums. Recognize that similar questions have been asked before but think that each situation is unique. Also, would likely learn a lot from engaging in live discussion vs. just reading historical posts.
  2. PCC75


    i'm in a similiar situation: have a good career going/trajectory is solid, have been contemplating about switching careers to trading for years now, have tried trading on the side but it's not effective... in my opinion, given your scenario and obvious desire/interest in trading i say give it a shot... what kept me on the fence for a while is the fact that my career was going well and i didnt want to throw away/lose the dividends for the years of work ive put into it... obviously your situation has more factors withthe kids, but you're current financially sound and your wife works so it doenst seem ilke there'd be any problem feeding, clothing, etc... a few months back i decided that since i know all i want to do is trade (and it sounds like you do too) i will go for it while leaving myself some outs/career alternatives down the road in case it doesnt work... but outs or not, if you have the desire and ability (your career details imply you have a good head on your shoulders) you should be successful... not sure if you were just going to go at it on your own or try joining a house... i personally prefer joining a house cause i'd rather work with people, but the hard part i find is getting into one... anyway, whatever your preference i say go for it and good luck
  3. ElCubano


    Dude....litsen to me and litsen good....dont make a fucking move.... you are in a sweet spot; dont turn it upside down...peace and have a great day...
  4. I tend to agree wtih El. People have a way of sabotaging their own success.

    Obviously you have the necessary ingredients from your first post to make this happen, but you really need to think through the second part and that is if you are cut out for the solitary existence trading will require.

    You'll lose your networking, making social contacts, who will you discuss the days business with? Posters on a message board? You'll probably lose patience for small talk. No one will know what mood you'll be in when you walk out of your trading "closet" at the end of the day. You may be at a loss at how to explain your moods or the fact no one will even care. There's much more, maybe other would chime in on the solitary "existence".
  5. Allen3


    Really, really, really, don't, don't, don't do it. If you've got the $ and it sound like you do. Put a couple hundred grand in an account. Trade monthly, weekly, daily charts and swing trade. Much less time commitment, better chance for success, and you won't through away a career. Look at B1S2 and the ES journal. That's your spot. With your money from job backing you you could be a big account in a couple years.

    I think I probably speak for a lot of others here, who for one reason or another have gotten involved in trading. It's hard, personally destructive in some ways, and we would probably all trade positions with you. We would work on building wealth trading longer term if we had a couple million and a million coming in every year. Step back look at what some swing traders are doing, get involved in that first. If you blow a 100 grand or 2 and still have your job it won't hurt you to bad and may cure your trading fixation. If your successful swing trading. You may be able to retire sooner rather than later but with a huge amount of money backing you up.
    I hope this helps. Take it for what it's worth, you don't know who I am and I don't know the type of person you are. I could be telling the next Michelangelo to not sculpt and stay with the porta potty business:D .

  6. I agree with what others have said. Never give up a guaranteed paycheck for the CHANCE to get another paycheck.

    Here is my sugestion:
    1. Learn to swing trade 1 to 4 week long trades. The only things you need to look at are support/resistance, trends in the stock, sector and broad markets, and volume. THATS IT don't look at any of the other trash "indicators".

    2. Learn to never lose BIG. In any given trade there are 5 possible outcomes. A big win, a small win, break even, a small loss, and a big loss. Break evens don't really count and small losses will off set small wins. If you can just learn to never let yourself lose big you will be left with just your big wins. You can be profitable by only being right 1/3 of the time if you do this.

    3. Once you feel comfortable trading stocks, start learning about options. They are a lot more powerful, and provide for ways to even make money in a stagnant (not moving) market.

    4. Quit your day job when you are CONSISTANTLY making enough money in the market to replace your day jobs paycheck, replace your job provided benefits (insurance), AND still let your trading account keep growing.
  7. alkamyst


    Thanks for the feedback.

    A lot of what people have said about not messing with a good thing definitely resonates.

    What makes the decision tough is that I believe I can be a great trader - I guess all of us do.

    I like the guidance about trading longer term - however I feel that it wont suit my personality...

    ...However, may be that in itself should be a concern - am I looking to be successful as a trader or am I looking for something else (e.g. thrills, escape from current job...)

    Sounds like I have further reflection ahead of me and perhaps then focus on a longer time frame.
  8. balda


    Price action doesn't mean 1 or 5 min charts. You can learn price action on a daily charts.
    Some traders hold positions for weeks or months.

    Pure price action without any indicators or other BS based on daily scans.

    A lot of traders talk about price action but do not know what it is.

    1 Number of new highs compared to number of new lows (price action)
    2 Number of stocks closed today higher than 10 days ago (price action)
    3 % of stocks closed above or below 50 day MA (price action)
    4 closed above predetermined MA (price action)


    Do not quit your job.
  9. I'm going to go against the crowd here and tell you to go for it IF you don't like what you're doing currently and think you have a genuine passion for trading.

    Sounds like you're in a consulting industry, considering how many hours your work and frequent traveling schedule.

    If your wife can continue to work, then you don't have to worry about health care benefits.

    You don't have any debt and have savings that can last at least 5 years, so it's a great situation actually for you.

    Of course, you will most likely end up making more money for the next 10 years or so if you stay at your current job and get the salary you project.

    But the freedom you get when you "make" it as a trader can't be underestimated at all.

    No more working 70-80 hours per week and more time for your family and your hobbies/interests/traveling/etc.
  10. Dobbes


    What he says.

    #10     May 19, 2008