So, you also quit your job to pursue (day) trading? What was the outcome...?
If you read the OP and my other posts, it should be obvious that I'm well prepared and have been at this for a long time now.
Any advice for a soon to be full-time trader?
- Thread starter Howard
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So, you also quit your job to pursue (day) trading? What was the outcome...?
If you read the OP and my other posts, it should be obvious that I'm well prepared and have been at this for a long time now.
Well summed up, imjohn.
I've made sufficient preparations over the last two years, both trading wise (learning and developing trading tools) and in saving up money, but I feel my progression has come to a slow grind now and that if I am to have a chance at this at all, I need to give it my full focus over a period of time.
Worst case scenario for me is that I go back to my old job with 6 months of living expenses gone. I'm not worried about blowing my account or losing money in my day trading account.
Best case scenario is that I'm actually successful doing this.
A scenario in between these two is that I need to return to the 9-5, but am able to find a job with more flexibility and better pay that I can combine with day trading assuming I want to keep pursuing that. My current job seems like a dead end anyway, so I feel I've made the right choice.
Not being critical, but unless you are trading outside the square, that is a radically different style / unconventionally, my guess is you will not make it as a day trader with $15k capital.
You might be well prepared but it doesn't look like you know what you are doing. In the OP you mention you went full time before twice and slowly bled to death. What is going to be different this time? Is there a statistical change? Do you have numbers/statistics that show you can be successful this time?
Yes i did quit my job and i have been trading some different markets since then, i do make a living out of it but i am not killing it either. Now i am making a switch to swing trading stocks since this system shows the most potential, is very scalable and doesn't require me to be behind my desk up to 10 hours a day. However i never started any trading journey without knowing i had a statistical edge ...
I'm glad to hear you say this. In that you've got a back-up plan, if things don't work out.
Let me add, that when you run into issues? Don't get disheartened. I've been trading for 23 years now, and there was a time about 20 years ago, I tried what you are trying. The results of that attempt, caused me to walk away from active trading for a time.
So you have a fall-back. Good. In that arena, I like the way you're thinking. It shows you think about risk.
Let me just talk about some things ... and to show you due respect? Maybe you have considered these things. But if you were trading my firms capital (I'm not talking about you trading OPM, I'm talking about a scenario so you can consider some factors), what my questions would be. That way, if you have to fall back to your worse-case scenario? It'll give you some things to think about as well.
Is it single strat? If the answer is Yes? Then that's going to be a negative. Not a game killer. But negative. I might wince on hearing that. That's a pretty big deal. As one of my partners likes to say ... " ... as we call it, but it is critical not to confuse good discipline with poor adaptation skills. Rigid rule based trading is certainly valid, but in our quantitative pursuits we've never seen a single strategy applied to a single market with a single mechanical risk/reward scheme that made money consistently for twenty years, or even five years for that matter. Of course the internet is filled with websites claiming they have such systems but when you look under the hood you always find the same things. A year or two of hypothetical testing (if that) which is heavily optimized (curve fit) to those specific historic conditions".
Single-strat's put you under more pressure. Especially, if it's intra-day.
Do some trade single-strats and 'make it'? Yes. Do they make it from tradin But I've personally never understood why anyone trades single-strat, when they don't have to ... they can lessen the psychological burden on themselves by trading multi-strat, lessen the psychological burdens you feel when one program goes into DD, have better risk adjusted performance, by simply trading multi-strat?
What is the testing regime like? Again, to the above point? How long has your process been tested. I think someone earlier in the thread say that they had tested their strat for 2 years? Or sent it through 2 years of testing? Something like that?
I have to be honest. That's no real measure of any process. Not at all. Not even close. One simple, what we refer to as "regime change" (and there may be one approaching) and it will wreck any process that attempts to trade off of two or three, or even five years of data. There's a real reason that Quants, or firms that have Quantitative Research done ... will test their processes for at least TWENTY years of in-sample data.
And even that's not enough.
You need at least TWENTY years of in-sample data, and three years of out-of-sample data to move forward with a process.
With two or three years of testing? By definition, it's curve fit to that time frame.
Fail in this arena? It will simply kill any trader. Without mercy. I know, it happened to me in 1998. And I've seen it happen to ... oh ... maybe around 5,000 people who've attempted it that I've encountered.
What is the Capital Being Used? I know you've heard this before. And you probably don't want to hear it. But I'll just say ... well .... ... let me put it this way.
Have I ever heard of someone starting out with $15,000 and eventually making it to full-time trading.
Absolutely.
The industry is filled with them. Because they took that $15,000, took a monthly draw from something else like spousal income, grinded for about 6 years, got it to a respectable amount, while they added capital, and THEN they went pro.
Have I ever heard of someone starting out with $15,000 and jumping right into trading being their sole vocation and making it?
No. Not once. And there have been papers written on this phenomenon ... by like ... Stanford University on the phenomenon.
On $15,000, the problem is not living cheaply. It's the math that a monthly draw, magnify's DD's ... making even the most basic of DD's absolutely catastrophic.
And so putting it all together? Even if one lives MORE cheaply than they have figured? It still cannot work. It simply can't. It's just math. Because it's requiring a process to give linear returns.
Which have never ... ever ... in the history of trading ... ever happened.
There is a firm out there that annualizes so high, they're not open to outside investment. They are so good, they are closed. They have had TWO losing months, in like a decade.
So even the best of the best on this entire planet? THEY haven't done it.
And they trade multi-strat.
No one has EVER done it ... trading single-strat. Especially if it's mechanical.
I don't say that to dishearten you.
I realize you're going to do what you're going to do.
Just know it's been tried by others, tens of thousands of times, and it just doesn't work.
If anything, I'm heartened to hear you have a back-up plan. Because although there are always statistical outliers? If you have a back-up plan, it means you have a way to learn from your experience ... and move forward.
My best learning experiences, were always from things that didn't work out the way I wanted them to
I realize you're going to do what you're going to do.
Just know it's been tried by others, tens of thousands of times, and it just doesn't work.
If anything, I'm heartened to hear you have a back-up plan. Because although there are always statistical outliers? If you have a back-up plan, it means you have a way to learn from your experience ... and move forward.
My best learning experiences, were always from things that didn't work out the way I wanted them to
If you genuinely care, you can read the other comments I've made in this thread. I already answered.
I'm not sure. It depends on how you define 'strategy'. I can trade both breakouts (buy high and sell higher) and I can trade mean reversion, i.e., fade highs and lows. Without telling any secrets, I buy/sell based on historical scenarios/patterns and targets are adjusted accordingly. And yes, in that sense, it's a quantitative system.
The system requires discretion on the execution part, so a challenge for me would be to actually trade only high probability outcomes.
But at the end of the day I directionally day trade ES, so in a broader sense, I suppose I'm trading only one strategy, although you could say that my entire methodology is composed of multiple strategies as I attempt to adapt to current (and changing) market conditions.
Well, I respectfully disagree. 20 years ago HFT didn't exist. It's a different market. My focus is always on the most present. I currently use the last 10 years of data as a maximum in my historical database. That covers pretty much everything for intraday trading. At least for my purposes.
Don't worry about disheartening me. I can tell that you're an honest, kind and well meaning guy that's certainly worth listening to. And I value your comments on this board and in this thread.
Best regards.
Howard
Most things i have read is that you believe you are ready, you feel you have something now. However feelings and believes are no statistical edge.
I also saw you will aim for a certain amount of ES points each day, so let me refrase the question. You know you have an X point target per day, week or month, in the past 6 months, how often did you reach your target, what was the highes draw down and what is the overal return?
Even if you could not trade the past 6 months it should be possible to go back in time and review every day and make some calculations for a period of time. If you are a discretionary trader then i would highly suggest trading demo at least 1 month to see if your system actually works instead of just assuming that it is working and maybe piss your money away.
I honestly do wish you the very best, i just think you should know your odds of being successful before you start. If the odds are low you wait longer/work longer, if the odds are high then you are ready.
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Exactly; on a 5 minute chart.
On a 50 day or 5 year charts, with dividends,much better
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