Any advice for a soon to be full-time trader?

[tiddlywinks]

So many grannys in the audience! WOW!

100K+ accounts with 100K+ backstops plus another 500K+ elsewhere.
Sounds closer to a retirement plan than prep for a full time gig.
A franchise with a proven model would not be good enough.

Y'all need a dose of aim small, miss small.
Get some faith in your own capabilities.

Good luck on your journeys... fwiw, the sausage at McD's doesn't repeat and the wifi is free.

 

[interdim]

Howard there is so much critical information missing here. Let's start with how much are you going to risk per trade on a 15K account?

 

[Howard]

''

Similar (I quit FT job to pursue trading FT). Now, still trading. Though I started with a larger capital base (amount I was comfortable to try with).

Nicely done! Are you day trading also?

''That's not a recommendation, just one example of a way to scale up (assuming your plan is net profitable)... You'll have to develop a scaling strategy that is suitable for your trade plan and temperament. (Note: my example is simplistic. Obviously withdrawals will need to be made along the way for financial obligations, taxes, etc.)

That's my basic scaling strategy already. Thanks.

But I suppose what I was asking beyond this is if there'd be a way for me to scale my account otherwise, i.e., access more capital. I've heard some mention of Fundseeder. Not sure if it's something that's worth looking into.

 

[Howard]

You seem well-spoken & intelligent from your posts. What's your background, & who's your broker?

Thanks.

As mentioned already - I've been exposed to the market on/off for around 12 years now in various ways. Started swing trading along a full time job and did reasonably well. Decided to pursue day trading (may have been a bad idea). Started day trading the ES for the first time just around 2010.

Somewhere along the way I decided to get an education in case this trading gig should fail and became an engineer. That's been my full-time occupation for the last 2 years now, but I've spent all available time studying/trading the markets. Most of the last 2 years have gone into development of my trading model though.

Current broker is NT/Dorman.

Howard,

I admire your decision to trade full time. It does not seem like this is your first rodeo. I hope that this restart will last a little longer than your last try at it. I have started and restarted several times in my life and I am now starting again also.

Have you looked at the Index Future Micros?

Anyways...Good Luck to us.

ES

Hi, ES,

Nicely put and thanks. It's indeed not my first rodeo.

The new micros are indeed a nice alternative, but I feel I can handle a full sized contract (or 3) at this equity level.

Good luck to you as well!

Best regards,

Howard

 

[Howard]

Good for you for saving 6 months of living expenses - but 15k is far to little trade into a position where you can live off of your gains. Consider the following:

You didnt mention where you live so I will assume US - adjust accordingly.

I live in Norway. Taxation is approximately 30 % on capital gains.

While I have 6 months of living expenses, there might be ways for me to go on longer before taking money out of account, so I'm not worried about that. I have stuff to sell, I can take on some additional part time work or even take up a loan if I remain confident in what I'm doing.

 

[gaussian]

I live in Norway. Taxation is approximately 30 % on capital gains.

While I have 6 months of living expenses, there might be ways for me to go on longer before taking money out of account, so I'm not worried about that. I have stuff to sell, I can take on some additional part time work or even take up a loan if I remain confident in what I'm doing.

Here is my personal recommendation to you. Take it or leave it -

If you haven't put in your required exit time (here in the states referred to as your two weeks) don't yet. You have plenty of passion to pursue this - and that is great. But you need to setup some infrastructure and life stuff first.

Keep sacking away money - try to live on what you'd expect to live as a trader. 2% per month is around 70% per year before taxes (compounding) and a very reasonable goal for an aspiring trader. Crack open an excel sheet and figure out what kind of draw you'd need per month to live. From now until your account is large enough attempt to LIVE off that amount while trading in off hours, at night, or whatever you can. Every dollar you save doing this goes into 3 accounts - a tax deferred retirement for your future, your emergency funds, and FINALLY your trading account.

If you are profitable great, if not you are living well below your means and can keep up with margin calls and other things.

In the mean time:

1. Determine the amount you need to draw each month and factor in your historical drawdown
2. Determine your optimal account size starting - factor in keeping around 40% of your account in cash at any time and your draw from (1) with some extra leeway to account for total AUM growth.
3. Call tax attorneys in your area specializing in finance and figure out how to incorporate in order to avoid extra taxes
4. Talk this through with your girlfriend so she understand what you are getting her into.

I'm not talking out of my ass here. I have sketched up a plan in my trading journal for my switch to day trading when I can do it. This is more-or-less what I'd do (excluding some complications being an American has...)

 

[imjohn]

Nicely done! Are you day trading also?

That's my basic scaling strategy already. Thanks.

But I suppose what I was asking beyond this is if there'd be a way for me to scale my account otherwise, i.e., access more capital. I've heard some mention of Fundseeder. Not sure if it's something that's worth looking into.

Yes. DT Equity Index futures.

I have no personal experience securing outside funding/backing, so no comments there.

 

[gaussian]

even take up a loan

I want to add to what I said above and make this very clear. Do not EVER take out a loan to trade.

In Las Vegas the casinos will offer you a loan so you can gamble because they know you are going to lose. A profitable trader (...really no different than a profitable poker player) will not over-leverage themselves to the point they need a loan.

NEVER take a loan.

NEVER take a loan.

 

[Howard]

Here is my personal recommendation to you. Take it or leave it -

If you haven't put in your required exit time (here in the states referred to as your two weeks) don't yet. You have plenty of passion to pursue this - and that is great. But you need to setup some infrastructure and life stuff first.

Thanks, but I do not feel there's anything to stop me from leaving my current job now.

I may however consider other ways of income moving forward, i.e., part time work.

Maybe I will have to get a full time job again in 6 months, but that's the time to make proper arrangements and make sure I get a job that's compatible with full time day trading. I have friends who's getting paid decent salaries (and more than me) who are bored out of their mind at work, can leave early most days, never work extra hours and can work from home. For me, it's the other way around and it's even hard to work less than 40 hours per week due to the workload and deadlines (consulting business). This week for example, I'm looking at a 60 hour week in order to accomplish what I am to deliver for my clients.

 

[emojitrading]

If you are good and disciplined you have a chance with your $15k account IF YOU MANAGE RISK AND PROTECT YOUR EQUITY.

If you never risk more than 2% of your equity you are looking at $300 daily risk. This is fine, in fact too high. You can trade ES with a daily loss limit of $200 risking <$100 per trade. If you don't know how to trade using a 2 point or lower stop on ES, don't start this venture. To reduce your risk further, trade MES.

It's realistic trading 1 lot of ES with $200 daily loss limit to make $200-$400 per day across a low number of trades. If you are able to do this consistently and don't need to make significant withdrawals from your account in the early stages of building equity, you have a chance. You will face a psychological challenge that this is your 'living' and this can lead to overtrading, FOMO, etc., which has potential to kill your equity. Concentrate on trading as infrequently as possible - study a small number of reliable setups and get good and disciplined at executing them and work to a strict daily loss limit and daily profit target. If you reach your daily profit target, seriously consider stopping for the day - don't allow greed to get in the way. If you do trade beyond your target, your target is your new stop level. Always end the day with positive P&L against your budget.