as i expected, i definitely got many different view points. i appreciate everyones 2 cents and will definitely keep researching and reading before i make any choices...thanks again.
everyone is saying how prop. traders are barely making minimum wage and nowhere near 6figures. Is that really true ?!! Would you say the same about market makers at the investment banks (don't they get a salary?)
I've been at this for nearly 10 months (prop trade) I am just getting profitable. But that's only because we had a great July. Anyone can tell you that July was an easy month to trade. Read all the experiences of all the traders on this board. If you even have the slightest hesitation about doing this, then I suggest you don't. At least not yet. The markets have been extremely difficult to trade for the most part of this year. It COULD get better but this is hope. You just never know and that's the problem isn't it? Sure I know several traders that kept pulling money out of the markets the whole time but they are top tier traders. One will still pull out near 7 fig income and the others lower 6 figures. But that's not the norm, that's not even close. The norm, from the small sampling of traders that I know and their buddies at several different shops is at best break even to 35-40k. The rest all lost money. If you can stand not having income for months and then have a good month and maybe hope for better months ahead, which, obviously isn't guaranteed, and you REALLY, REALLY want to do this. Then by all means give it a shot. The key is "REALLY, REALLY," you have to be EXTREMELY hungry, to a point where you will do almost anything to make this work- even if the end reward is only $35-40k/year. Can it be a lot better? Of course. Does it mean that if you can make $35-40k a year you have a greater probability to sky rocket into the upper stratosphere. Yes. But still, it's not guaranteed. But then few things in life are. But to give up a solid day job in the current state of the job market? I would not recommend it. I know plenty of traders that are so sick of this gig that they are desperately looking for a job that would give them steady income. Does that mean that you can't pull money out of the market in any state? No. You might just have the right psychological make up to master this craft a lot faster and have the adaptability to quickly adjust to various market conditions, but for the rest of us? It just takes a long time and a lot of exposure and trial and error until we get it. What do we end up getting? A headache... just kidding. No, you end up realizing that once you pass the basics and stop turning over every stone to hunt down the perfect setup i.e. the "holy grail," trading success is a matter of recognizing who you are and assessing your strengths and weaknesses- enhancing one and minimizing the other. That is, what attracts people to this game isn't it? "It's all you." You are your own worst enemy and you are your greatest savior. And everything ($$'s) is measured in proportion. That's why you REALLY, REALLY must want it. Only you can keep pushing yourself to get to the end goal. IMHO, it would be a lot better if you weren't running away from a job but running to this one. Meaning, this is it, "this is all I ever wanted to do!" Perhaps not, but the attitude will help. Good luck!
Husky02, A lot of people have varying opinions on trading, but it is simply like everything else in life -- the more ambition and determination you exhibit, the better your chances of exceeding brilliantly. Who do you think would make a better trader in your opinion -- Albert Einstein or Sigmund Freud? I'll let you ponder that one, through all the TA bullcrap vs. the blaringly obvious. So long as any market is highly liquid with fear and greed, a good proficient trader can make anything he desires. I will repeat this once more -- "If you are a consistent trader that is profitable, you can make as much money as you desire." Some people are content with upper 5 figures and have no desire to move to the next level. Some people are content with 6 figures. However, a lot of people couldn't stomach moving such large positions -- others see it like a nintendo game. Trading is really not that difficult once you accept that the game should be removed from emotion and adjusted to the prevailing sentiment of the markets. If you find yourself sweating and hesitating before entering and getting excited when you take profits, you'll need to work on that aspect of your emotional control. The best traders don't get elated when they pull profits, because it is just one trade -- it is the longe time-frame that matters when dealing with consistent profitability. Go get a day-job and see if you can adjust your schedule to get off one day of the work week and use that time to start out trading. Nobody should ever just quit their dayjob, run out and buy 4 cool looking LCD panels, a DSL and esignal connection and expect to make a million in 18 months (unless they are trading futures and they are me). Good luck to you. aphie
Why Huskey02, didn't you know? This is the circus! Hey, how much do they pay anyway? Just kidding... You couldn't pull me away from those glittering lights for all the tea in China. I don't mean the circus I mean my quote board and PC.
Two points to consider : location and globalization Unlike most jobs, trading does not link one to a specific location. Any safe place with a reliable 56k internet access will do. So, if one makes 100k$ a year and is just at breakeven compared to his lifestyle in California, he saves 97k$ a year if he is living in Russia, and this figure accounts for a lifestyle twice as high as the average Russian executive. Wealth creation is saving + compounding. Offshoring oneself can be the road to financial freedom. An average trader going offshore for 8 years at 22 can get back as a millionaire. How possible is this for a 30 y/o corporate executive ? Then comes in play the globalization trend. Work is a commodity. The demand might increase but what if the supply is growing ten times faster ? This will probably be the case in the next phase of economic growth. The national job markets are protected everywhere by labor laws. It worked until the internet. The past two years have seen the completion of data networks in less developed countries. Outsourcing is now institutionalised. So, how competitive is an American engineer when his Indian/Russian/Polish counterpart will be willing to work for 30 to 150 times less money ? Just like production jobs were delocalized a while ago, IT jobs, consulting jobs, accounting and so on will be delocalized. Massive supply will seriously hurt the standards of living of a lot of people. In trading, one does not have to fear the arrival of new participants. Some of them might take some money out of the market, probably 10% of them But the 100% will bring some money on the table. So, traders wont suffer from globalization. So, in my humble opinion, I think being a trader is not to be disregarded as an opportunity. You can get financial freedom out of trading. You can be there for the long term(if need be). I say this after having experimented the other side (ie highly paying job in a top 50 worldwide company) OHLC
Starting traders should not overlook leasing a seat on an agrcultural commodity pit and trading on the floor. Very cheap. A little money goes a long way. Good opportunities on market making in options there as well.
OHLC, That's what's pundits and forecasters been saying for the last 20 yrs. But it wasn't until the advent of the internet that enabled this to really happen... The push for broadband GLOBALLY(which will happen in our lifetime maybe in 10-20yrs when the entire globe is connected with high speed internet speed - 1.5Mbps or 100Mbps!) then we'll see a DRASTIC change in the entire economic landscape. Talented people worldwide will be competing for lucrative jobs either it be engineering, software dev, consulting, writing, design, etc. In all areas of life, things are getting systemized , studied, research, refined, and done to the Nth degree! Look at manufacturing. It used to be anyone can assemble a car. Now it takes an assembly line full of robots controlled by high precision computers. And the design of new cars runs on supercomputers even! The value-added of "unskilled" labor dropped dramatically. People are used to just put doors or seltbelts on. The same is going on with software outsourcing to India and Russia where Phds in compsci only make like $30K a year! No wonder Microsoft, IBM, Sun all have software research centers in India and Russia. But I wouldn't totally agree that trading wouldn't be affected. I think the same will happen to trading... The data is there and can be available cheaply. With enough powerful software, computing power, broadband connection, very smart physicists/mathematicians/quants from Russia, China, India they will find exploitable patterns to trade off and execute it through real-time order entry faster than you can say "Buy on the Bid"! And not only that, they can probably compete with the big institutions here in the U.S.! Instead of going to work on Wall St at GS or something they can band together and compete directly with enough financial backing(that's the key). Then skills will matter even more. The world will never be the same again.. Competition always drives innovations and changes in society... trader99
That actaully was a very realistic piture you have painted. I was in St.Petersburg (Russia, not Florida ) last May and really enjoyed trading from there (besides the usual cost of living factors and how beautiful the city is to live in, the time difference was awsome too. The US mkt opens in the states when it's about 3:30pm there and closes at midnight their time - given that I only trade about 20 minutes before the close and 20 minutes after the open, it was truely something...). 56K with a plain phone line was good enough with Tradestation. It's only a matter of time before the things you have described materialize, in my opinion. And the broadband connectivity is already there. You only have to invest in a dish connection, which is relatively affordable.