The lower your salary, the more sense it makes to take the risk since the opportunity cost is low. What's a $45-$50k job in these times in terms of the lifestyle you'd have? However, if you were already into six figures then you might want to consider trading the system part time, or trade it EOD, as this is easier to manage while at work. Additionally, you could have a broker execute the trades for you. Once you've created the trading system why would you want to stare at a PC screen all day? BTW, who came up with a 1:3 R/R ratio? I thought most (90%+) blow out after their first year. I look at trading really as a diversification move for me. I already have exposure to real estate and the stock and bond markets through my 401k, IRA...all on a buy-and-hold basis via mutual funds. By adding a trading system approach I add a non buy-and-hold approach to my portfolio so that my overall returns are (hopefully) smoothed out over time.
<I would expect a decent prop trader to make $200K+. > hey fast trader .... what percent of traders do you know who are decent traders making 200 K ? I do not think that the percent of Decent prop traders is quite high these days
Considering our young hero's situation, I recommend we look at some very important aspects to this decision: 1. Motive Are you interested in trading because you think you can make a lot of money ( primarily dollar-motivated ), or are you also a real trader who enjoys the challenge, is committed, will research new ideas passionately, persistently, will do the work required no matter what, can be consistent, able to learn from others, stays up until 3 in the morning occasionally due to pursuing ideas, is thoroughly interested in learning everything you can about trading, etc. If your motive is money, what will you do for motivation during the learning phase where you may not be making any yet? Have you always loved reading about trading, learning about trading, doing actual trades, etc. ? Or is this just another cool idea for a way to make big money? 2. Timeframe to Succeed How long do you have to succeed at this venture? Are you willing to put in 5-10 years to see if you can make a go of it, or is this just a quick see-if-I-can-get-rich thing? A serious commitment here is a must. The prop firm could let you go without warning as well. So, you must be able to tolerate this uncertainty. Remember, if you meet a special woman in the middle of this process and decide to get married, buy a house, and have kids this could throw a huge wrench into your trading career unless you are consistently successful by then. On the flip side, this is a strong reason to do this now, or face the very real possibility that you won't ever be able to try it at this manageable level of risk again. In other words, you could lose a marriage and family by waiting until later, trying and failing, whereas now you lose only time and some minor money. 3. Are You a Trader? The summation of this question is, "Are You a Trader or Not?" If you are a trader, you will do anything and everything to succeed, failure is not an option, and you WILL make it if you stay with it. If you are not this committed, you will probably fail unless you get mentorship from a REAL trader and do everything he says until you become a real trader. Best Regards, Mike
Mike, Good point. A mentor would be realy helpfull for me. Where can I find a good (online) mentor to coach me in the learning period? Hendrik
It's up to you. If you want to take the chance then do it. You seem to have at least done some of your homework. Can it be done yes. However, I traded partime for 3 years before I quit my job and traded full time. It's totally your call. At this point I'm glad I took that leap and I haven't looked back since.
Sometimes, today's dream is key Don't sell your soul for a retirement nest egg By Paul B. Farrell, CBS.MarketWatch.com Last Update: 7:48 PM ET May 27, 2004 ARROYO GRANDE, Calif. (CBS.MW) --?Retirement planning may be your best friend in the distant future. But at a great cost, because retirement planning may also be your worst enemy today, even killing your soul. Everyone has a dream. And once in your life you'll get at least one opportunity, one challenge to throw caution to the wind, take the big risk, break free and follow your dream. Or you can play it safe, anchored with your feet on the ground, doing all the right things, yet living a life of "quiet desperation," wondering if maybe you gave up the only thing that really matters. Sound familiar? I'll bet this agonizing dialogue has run through your head sometime in your life: Should you follow your bliss now? Or play it safe, build a long-term nest egg, in hopes of a comfortable retirement? I've been down this road a few times. I also know from researching the midlife crisis -- the topic of my doctoral dissertation in psychology -- and from my work as career counselor that this is a decision most people face at some point, some even agonizing over it throughout their lives. Unfortunately, conventional retirement-planning wisdom is likely to be your worst enemy in making these kinds of decisions. The mantra: Wait until retirement; then you'll be free Instead of offering you freedom today, the high priests of the retirement gods represent a way of life and a mindset that actually traps us into the safe path. They'll act like scolding parents wagging their bony fingers at us if we ever hint at failing to plan for the future. So today I'm questioning that assumption and challenging America's obsession with retirement and planning for the future. That obsession should never substitute for living your dreams today. Never! Let me be more specific: Every broker and financial planner on Wall Street, all mutual fund companies and indeed the entire $12 trillion financial services industry are your biggest enemy when you're finally faced with the big decision. They are too myopic, too obsessively focused on that distant thing called "the future" and greedily having clients piling up assets In other words, if you stop saving for tomorrow and start living off your assets today in order to follow your dreams, you won't be able pay their high fees and commissions. Harvard lawyer waiting table in paradise The dilemma came into sharp focus this past weekend while relaxing in Carmel, Calif., one of my favorite weekend retreats. We were browsing in the Pilgrim Bookstore when my wife handed me a book, casually noting that it reminded her of a major life change I went through. A chapter on investing stood out: "Should I tuck $2,000 away in my IRA as I had done in my responsible and respectable past that would make my banker proud?" asked Tama Kieves, a Harvard lawyer who quit her job with one of Denver's top law firms and waits tables at the Paradise Cafe. "Or should I strut out on the edge and wing that money into the promise and the pandemonium of my freedom?" she added. Money was tight. Kieves was preparing her first income tax return after leaving a high-paid position that had given her status, material luxuries, and the promise of a secure retirement in the distant future: "The IRA decision raised a question I would have to answer again and again on this path: My future or now?" Virginia lawyer leaves Morgan Stanley for Hollywood My wife was right, reading Tama Kieves' book "This Time I Dance" did remind me of a similar decision I made. After five long years of agonizing about it I left a guaranteed lifetime position with Morgan Stanley, the world's top investment banking firm and headed for Hollywood. I had no job prospects, nothing but a vague dream of making it in film. Yes, I was following my bliss. That had become my sustaining mantra for those five years after taking a Joseph Campbell seminar on "Mythical Meditation." Campbell's the guy George Lucas credited with his inspiration for "Star Wars" and the guy Bill Moyers memorialized in his PBS series, "The Power of Myth." Then, after three years in Hollywood, I was still chasing my bliss -- broke, unemployed and without a film deal, but no thoughts of going back to Morgan Stanley and Wall Street. Eventually things turned around. However, I'd be a liar if I denied there wasn't a lot of doubts and fears along the way, even panic and moments of desperation when my little nest egg was finally gone and I was living on credit cards. But I've never regretted the decision to "follow my bliss," as corny as that sounds. And today I even thank God that everything happened exactly the way it happened, even though it was a very costly decision for many years. Listen only to your inner voice Kieves reminded me of this fundamental decision I believe we all face at some point ... one so fundamental that most financial professionals are more likely to talk you out of, if they'll advise you at all: When do you risk all on a spin of the roulette wheel of life? When do you risk your retirement savings now to chase a dream? Anyone who's had this experience knows exactly what I am talking about. But folks, you're on your own. Trust the still small voice within. And when the doubts overwhelm you, remember Campbell's gentle message: "If you follow your bliss, you will always have your bliss, money or not. If you follow money, you may lose it, and you will have nothing."
In the beginning was the question if it is worth while to became a trader and giving up a job with an ok monthly salary. I had a job (in finance), became a local, stopped it (stupidly!), got back as a chief trader in a major utility (with a very sound salary), stopped it again and will start to trade for myself or in a "propshop" again. Everybody wants to make/have as much money as possible. It looks very easy just "to sit in front of a computer", hit some keys and get the big cash. I think you cannot b e c o m e a trader. Either you are a trader or not. Approaching the topic on how many tics per lot you have to make is - in my opinion - completely wrong. If you really want to trade, you should not think about how to survive for the starting phase. Nearly "every pain" is bearable if you are getting to the top. Dont think about how much you could earn. Just be sure if you make it, money is not a matter for you anymore. I know a few guys... (Hi "Flipper" !!!) Can you bear heavy (I mean heavy) ups and downs ? Can I by more smart or quicker than all the others ? (If there is a winner there must be a looser) Can I organize myself ? (e.g. without the existens of a boss who makes you appear in the office - even if you dont like to) Can I handle my inner temptation ? (To make a few tics here and there is quite easy - to avoid the losses is the key) Do you know already that you dont start to moan that you have givin up your old job - in the case you are not successful ? If you can answer all the questions positively you shoud go for it. ... being aware that if you are "hooked" once, it will be very hard to get back as "a clerk into any office" - even if you can get back to your old job.... If you have seen and felt the possibilities of being a trader it will be very hard to do some"stupid paperwork" - for a living and to feed your boss. profit !