I myself am going to get a low cost MBA, because I think that will serve two purposes. First, it will help me get a job in trading. Second, even if I don't have any luck with that, I'll have a systematized way of learning what I need to know and that will always help with trading. Plus its a great way to a backup career if you totally bomb as a trader
well, we had a good run. figured people were far too civilized in this thread than ET in general. Okay ModhSalleh, given what you said - what in hell are you doing in a trading forum? don't you have a revolution to conduct somewhere?
Agreed. Diversification of skills, like revenues, like assets, is key. But it's easier said than done. Diversification is also very very costly. A world class options dealer, for example, probably will have a very tough time retooling into a macro manager; We all take on systematic risk. By virtual of being alive, we are massively long beta.
I want to also add one more point that I forgot to mention. My opinion is that with trading, the potential upside is probably greater than in many other businesses. For example, if you open up a grocery store, you may eventually be able to start a franchise and get big like Gristedes. But you're going to have to involve a lot of people and manage them. You'll have to get investors, marketing people, managers, etc. If you like doing that kind of work and get a thrill out of such a challenge, you'll be able to do well if luck is also on your side. Now, if you're good at trading, and you like what you do, you can turn relatively small sums into very large sums. Of course at a certain point, you will have a problem trading without moving the market, so new challenges come into play (just as with starting a grocery franchise you might say, versus a corner store). Just as with other entrepreneurs, you have to risk and take chances, hold through bad periods, etc. But you can get to that point on your own potentially. You don't need to get partners or investors or anything like that. I would argue that with trading, the potential for upside is greater than in a lot of businesses as far as what one single person can do. Then again, a fair counterargument is that just as few grocery store owners have the vision, energy, patience, and skills to turn a grocery store into a national franchise, few traders have what it takes to be the next Richard Dennis. Its hard to argue with statistics either way, but in the end it comes down to doing what you can do best to make money. If you're good at trading, its better for you to make your money doing that than trying to start a grocery franchise, and vice versa.
You make a few valid points here, but I can't see the relevance to the OP's original question, you did a nice job making it about YOUR career and your views! Yes this is a rare civilized thread, so pardon me for ruining the vibe.:eek:
If I may substitute the word "finance" for "trading", I agree with you in general. I'm in this business for the money. But, it's one thing to look at the magnitude of success. But it's also important to look at the probability of success. Can't have expectation without both, right? My point for this entire thread (probably the most civilization thread, as others have pointed out, given the subject matter, in awhile) is that the probability part for "individual trader" is too low. So, net net, I believe the expectation for an individual trading his own account full time doesn't justify the risk being taken. The risk of going at your own on your own account is naturally much higher than a career. That being said - if you are absolutely intent on "trading" as a career and don't have the background or ability to get into the institutional side of things - then trading your retail account is the only thing open to you. But by then, you aren't making a business choice, you are making an emotional one. Which is fine - but just be sure you know why you made your decision.
I guess we can describe it thusly... Institutional trader's plusses * Has the backup and support of a team. * Has access to the best fundamental research and is able to pick up the beat on the street. * Has an opportunity to learn from people experienced in the business. * Takes home some kind of paycheck that is correlated to performance, but still has a base. * Doesn't have to worry about medical insurance. Neutrals * Has a lot of OPM to trade. Reason? Only gets a small percentage of OPM for themselves, after everyone else's share. Can get fired from the job and therefore lose access to OPM. Larger sums are harder to trade. Disadvantages: * Has to deal with office politics. * Can't trade exactly how they want. * Has to commute to work every morning, be clean shaven, buy and maintain expensive suits. * In some cases cannot trade for their private account due to conflicts of interest. * Can get fired because the boss's secretary thinks they're hotter than the boss. * Gets suckered into going drinking and partying with everyone after work and spending what they've earned. * Have the same problem that retail traders do if they want to make the switch: developing the entrepreneurial mentality, the self discipline, living below your means, and the stomach for taking risk with their own money. How does that sound?
I think the last post by sjfan summarized this thread pretty well. My original goal very early on was to "make it" as an individual trader. As I learn more and more about what it truly takes to be independently successful as a trader, I realized that the "expectancy" of retail traders is quite low. However, in the process of studying "trading," I came to learn other aspects of "finance" that became really interesting to me, which motivated me to switch career entirely, monetary issues aside.