Yet another noob wants to trade thread...

Discussion in 'Professional Trading' started by BartS, Jun 25, 2009.

  1. BartS


    Here is my situation:

    29 not married, no kids, work from home.
    Currently selling my house, not upside down but may have to resort to a short sale (5% to realtor 10K taxes closing costs property value around 400K) to get out.My work slowed down greatly to the point my savings are pretty much done because I'm paying more in bills (mortgage taxes utilities 4K/month alone) than I can make at the moment.

    After moving out and going to rent for a while (I am one of those that believe we still have a leg down to go in real estate) my after tax disposable income (after living expenses and all bills) will be between $1500 - $2500.

    Trading style: I only trade very high probability setups with very tight stops and 60% of my trades are profitable...I may only trade 5 or 6 setups per day and usually can steal 50 to 300 ticks from the market (only equities).Losing days are usually small since I have predetermined daily stops, there are days I can't trade, because the market changed or behaves differently...Once I pull a few losers in a row (5 tick max drawdown - 10 for larger stocks such as AAPL RIMM POT or GS) I stop trading and watch the screen the rest of the day to figure out what isn't working and can usually readjust the next day...Most trades have an automated feel to them, all limit orders with stops, I only change stops to lock profits, never to allow a larger drawdown.I have found this system to be very profitable especially with ranging or high/low basing stocks...

    I also like trading options and have a good understanding on how they work, typically swing trading and daytrading expiration week...Ran a test account a few months back from 100 to 450K in about 1 month carefully picking trades...

    I know most will say that papertrading isn't the same, no emotions, better fills etc.The point is that I have the confidence that I can be profitable, and I play trades with no emotions, as they have predefined entry and exit levels.

    I also had a test of emotions trading an options account for a friend multiple times in real life and still came out ahead, including a few dandies but also a few losses...Learned to pick my entries real good, because daytrading options if you don't get your entry right you may as well stay home...But due to risk management I will put options (futures as well) aside for now - equities offer a much safer (albeit less exciting) vehicle.(Like trading 10 GS contracts expiration week and seeing live p/l ranging from -$1,200.00/+$1,800.00 and finally getting out with a $1,300.00 gain, all in about 30 minutes - was last year, just starting out and wouldn't even dream of doing it today lol)...

    I might add that I spend 10 to 12 hours a day studying the markets, love every minute of it...And working from home I had the luxury of being able to do this everyday since november.

    -I am considering trading remote for a prop firm.
    I did speak with three firms, CY, keystone and T3Live.
    T3 is too expensive to get in at the moment, but would love to trade with those guys - they are very very good.

    Have to dig a bit deeper on CY group - heard good things but have yet to ask details.5K gets you in.

    Keystone, watched two webinars and traded emails back and forth - the guys seem transparent and knowledgeable - low commish and $250.00 per month all in.5K to get in training program included - heard good things about Erik and Peter the partners, this would be my top pick for now unless I find out that CY has something better cooking....

    I know how prop firms are considered on this forum, there is a bit of a love/hate deal going on so please don't start flaming and if you know of any firms that accept remote traders or if you had an experience (good or bad) please let me know - pm is cool.

    My question is this:

    Considering all above, which path would you take?

    1.Go to a prop, take training and deal with not making much for a while (until share size goes up) while still maintaining the income from the work at home deal.

    2.Sit on my ass for another year or two and save enough to be able to fund a larger account (still going through prop for commish and leverage) with 25-30K and start trading then but with no training from someone that has been trading for years?
    (and still keep the gig at home, as it is low maintenance and a steady source of cash flow)...And take the chance of trading really on my own with no training....

    I feel that no matter how much i learn, and I learn every day, there is always plenty of details that make a difference, and those things can only be learned by watching the screen and being in trades...and getting shortcuts from successful traders.

    How did some of you guys start?Fail?Become successful?

    I'm not looking for all the answers on a silver platter, yet need help as I want to take this to the next level...I know this sounds like another noob looking to beat a long dead horse but everyone's situation is different...

    I like challenges, have run 3 companies in a high stress industry,run a profitable business from home for now almost 3 years, played tons of sports and have been up to the task in many things I've tried - I usually start out shy and get better quickly - I know trading is different but it is another challenge and's waiving at me...and quite frankly I could use additional income in the long run even if it's only $500-$1000/month...

    So thanks to those who can throw in some insightful ideas or comments and if you have something negative to say go ahead just try to be intelligent and constructive about it!!
  2. Props dont always have your best interests in mind. But I guess you know that already.
  3. BartS


    This is how I see it:

    The prop is a business and the trader is a paying customer via commies, profit splits and risk deposit (call it tuition fee or whatever else it may be presented as).

    Hard for the prop to lose, but again I would not blame a business for making money.One of the props I mentioned had a good review : "you will make money if you follow their mentoring".
    He did not seem able to do that but agreed that they had something that worked - that alone is worth 5K I think...

    I guess there are no guarantees, just odds: odds of a 9 month old papertrader to make it (make it in my book = being consistent and being green) without training are lesser than making it with proper education - unless props just create their course out of thin air and expect you to churn commissions or lose to have to buy more courses, programs etc...

    Hence the question - are all props bad for the new trader or do they really bring something valuable to the table besides cheaper commies and leverage?
  4. Good luck to you
  5. drase


    Exactly, great question. This is what I'm debating. I have been swing trading out of my ROTH IRA because thats the only capital I have. (I contribute to my co's 401k, which is separate.) I have no way of coming up with 100k to start on my own. But a prop I talked to would give me 50k buying power.

    With their training and capital deposit it is $7500. Desk fees $250 per month. They seemed knowledgable and have a couple traders I can learn from. Of course, the other question is if I could take $7500 and go on my own with no training and see what would occur?

    Either way I have to wait till the wife is trained in her job so we have guaranteed income coming in.
  6. BartS


    I guess it's hard to play with $7,500.00
    You could make money trading $7500 how much can you make?
    A 100% gain is only $7500.00, which won't cover much in expenses, and that's assuming that you can actually get that much of a return.

    From what I've gathered talking to one of the firms, they increase your buying power as you grow profitable, with the ability to trade as much as 5000 shares.

    Assuming you can get be net positive 100 ticks a week you should be able to have a substantial addition to your income, If I could get an extra $1,000.00 per week trading, I'd be very happy, and I know there are peeps on this board that can do this in a day...

    But starting undercapitalized is a recipe for disaster imo...
  7. There's places where you can train with no financial risk. Of course payout will be low.

    Otherwise you can try to look into the more complex strategies firms (mainly in Chicago) that market-make in options, do all types of arbitrage, etc. They teach you how to trade their methodology (if computer can't do it alone)... here you get a salary and % of profits. Unfortunately you may need a quant finance/computer programming/physics/mathematics type degree.. if not MBA.
  8. Redneck


    Here’s some free advice (from a redneck no less:) )

    #2 … There is no substitute for having a well financed trading account – it’ll give you enough room to screw up and recover – because you will screw up (we all have)

    Also by developing the discipline to save enough money up – that skill will transfer to trading – and it is an invaluable skill to have Sir

    How I started – I kinda knew where wall street was located, and I “thought” I knew how the market worked – and decided I wanted to be a trader so I could become financially self sufficient

    So I took some formal trading education which taught me how to trade (woo-pity do)… but never once gave me any insight as how to think and act like a trader

    Then I spent 18 months in hell – finally figuring out nothing is as I thought… and nothing I was taught, or thought - mattered

    Finally, and once I got out of my own way – I learned how to be and think like a trader, and trade.

    Now life is good

    You have any questions – please ask – there are some very knowledgeable and helpful folks here

    And as personally I don’t believe in luck Sir – I’ll wish you a very successful Journey instead...

    Just be prepared to work hard, and never give up (if it is what you truly want)

  9. common misconception is that prop will teach you to trade

    they will only teach you basics like how to do orders, what is limit, what is stop, what does DOM mean etc

    prop firm will not ,

    wait let me repeat in a way that is more memorable

    prop firm WILL NOT teach you a successful strategy for trading, they will try to make it seem like they are teaching you.

    They will say things like, Cut your loss, let your winner run etc, but they definitely won't show you a working strategy that will give you an edge

    sorry but unless you have a trader father brother mother to teach you, you will have to learn on your own

    but you are a smart guy it seems, so within 3 years you could do it.
  10. drase


    RedneckTrader, did you trade by yourself at first and if so how much capital did you have to start off with?

    Apparently, the only way I can get a well financed account would be thru a prop firm. I know I would have to work very hard to be profitable but that is fine with me. I think, follow, and read about the markets everyday. It really is all I want to do.

    I figure I will be trading for the rest of my life, I might as well make it my vocation, not a hobby.
    #10     Jun 30, 2009