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

[EsKiller]

Yes. Multiple streams of income is for sure ideal.

I will consider ways to add at least some income. I could easily work 60-70 % of a full week and combine it with trading. It's the 100-150% weeks I find very hard to combine with trading. Or even impossible as I'm not home when the market is actually open/opening.

As mentioned earlier, I also have friends who have jobs offering full remote home-office solutions which is certainly something which would make it easier to combine a full time job with full time trading. But that's not going to happen with the job I have now, so I'm confident that I'm taking the right step in quitting.



Interesting! And thanks!

You're quitting when you're ahead for the month, but how about when you're ahead for the day? Do you operate with daily profit targets?

What I've been doing now that I have part time traded some (and grown my account doing so) is that I've secured a small profit on some size and then either scaled back to one contract only or traded the rest of the day in simulator mode.

Ultimately, I want to trade the entire day and take all my signals, but there's something about knocking out some consistency and protecting profits initially as I grow my confidence in executing live trades.

I do not operate based on daily targets, but I'll almost always walk away when I'm up around $3k. This number is usually hit when the opening hour provides a fairly obviouis mean reversion strategy or we have a strong trend day or b/o right at the open. Scalp for base hits in the opening hour, and catch bigger moves later in the afternoon to really move that month p/l number. For me, this is being highly selective on when to trade. You can REALLY overtrade in the eminis and I am not immune to this. Discipline is key but we are only human. Boredom sets in and u want to trade just to trade.

I dont like to do much trading on the days where the market is consolidating or in one of those waiting periods for big news (day before and day of FOMC or a slow news week on a volatilty crush week where we've seen a 10 day + uptrend). IMO, the eminis only have really good trading days twice a week on average. I'll stay up for an overnight session and trade if the charts are showing a nice potential overnight move or wake up at 3am ESt for the Euro open in ES and NQ.

I prefer to be done at noon. If I'm in positions after noon, they are based on the hourly charts, and I can monitor the positions from my phone.

 

[volente_00]

Well, in actuality, I have the equivalent of 6-7 monthly salaries at my current job saved up. So, in terms of living expenses, I might have more than 6 months saved up, but I like to be a bit conservative as unexpected things usually happen.

You left out the most important data


What is your monthly nut to pay all bills ?

$1,000?

$3,000 ?

$8,000 ?



You want to play conservative then figure on $250 a week consistent profit per contract on ES which is only 1 point a day
Currently 9% return on full notational value

Now figure out the size needed to reach your monthly nut based on that.


You also have to know your historical max drawdown in order to protect your trading capital.

I'm not saying you won't succeed but if your nut is $8,000 a month then odds are you will blow up a $15,000 account trying to hit that due to the leverage you will have to use.


Some of the best most simplistic advice I ever received on here many years ago when I first started trading index futures was that had a profound effect on expanding profitability


Up the contracts
Not the points


I can't tell you how many times I have seen people fail and or quit because they had a profitable strategy but it wasn't enough to cover their nut. So then they start tweaking and messing with a strategy that already has a proven positive expectancy in search of more points.

In the the end it simple math and probability yet is often overlooked in search of more profit

 

[Turveyd]

You left out the most important data


What is your monthly nut to pay all bills ?

$1,000?

$3,000 ?

$8,000 ?



You want to play conservative then figure on $250 a week consistent profit per contract on ES which is only 1 point a day

Now figure out the size needed to reach your monthly nut based on that.


You also have to know your historical max drawdown in order to protect your trading capital.

I'm not saying you won't succeed but if your nut is $8,000 a month then odds are you will blow up a $15,000 account trying to hit that due to the leverage you will have to use.

Yeah, Americans make and need $5000 per month I'd bet, where as Europeans likely $1500 per month which is what I need per month.

That's why there like, don't bother with anything less than 100K.

 

[raVar]

Thank you for your comment. You're lucky to have a very supportive wife who believed in you. Also, congratulations on making it as a trader!

This raises more questions on my end if I may:

1. How long did you trade while having your wife support you and build your track record? Because in your post you said you'd want to see a bare minimum of 3 years as a track record? Ideally 5 years?

You're more than welcome mate. I had a bit of a lucky break. Which, can happen. But it was still 3 years with me.

I was trading well, from 2001 forward (trading from 1996, but floundered, did well in 2000, but then a lapse in discipline destroyed me in 2001, so did well from 2001 to 2006), but it was on and off, and crazy multiple strats. But profitable. Then in 2006, I decided I would buckle down, and that trading would be my life-time career.

Three years later, we were on the other side of the '08 crisis, and I was profitable in '08. With that environment, in that time? That garnered A LOT of cool attention.

2. What did you trade?

Multi-strats, multiple markets. That also, garnered a lot of attention for those seeking beautiful risk adjusted performance (almost a necessity nowadays to big money).

3. What exactly does a track record consist of if I would want to 'sell myself' somewhere down the line? Is a broker statement sufficient or do I somehow need to document my trading results in more detail? If so - how?

Thanks in advance.

Howard

Again, you're more than welcome.

A simple tear sheet should suffice. A monthly grid ... with performance month by month, such as you find at https://www.coquesttradersresearch.com/

We do at our firm, but I did it before hand too. It's a shortcut guide to your performance. Takes like ... 3 minutes a month to do, once you have a spreadsheet spit the calcs out for you. 3 minutes ... max

In addition to that monthly grid? You'll want to know your annualized return (not average, but annualized) ... your max drawdown period, your max drawdown month. Then, in addition to that if you want to get fancy? You can calculate your Sharpe Ratio and Sortinio Ratio, and put that on there as well.

You do that?

Money will almost find you.

 

[lvp]

Thanks a lot, lvp. Nice to hear.

Mind me asking briefly about your strategies? Day trading? Which markets?

Any other advice that can be useful beyond the actual trading part?

Best,

Howard

hi, I do a combination of daytrade/swing trade futures market. Spreads and a little outrights.

If you have been trading for 12 years and are at the point where you are developing your own proprietary tools, I don’t think you need anymore advice here.

Good luck!

 

[Snuskpelle]

I appreciate all comments, but won't spend any more time defending myself or my decision. I am taking a risk pursuing this, but it's a calculated risk with limited down side. At this point in time, I feel it's far more risky to continue dabbling instead of pursuing this with full focus and determination. Up until this point I've been working with programmers and crafting my trading model, so it hasn't made sense to quit, but now it does.

It's also clear to me that many of those responding simply don't have success/experience in day trading index futures or they utilize strategies which lacks precision and allow for huge drawdown (no thanks).

The type of advice I was interested in was more about how to proceed from here and if there's anything other independent traders feel have been important or crucial in a similar situation starting out on their own.

For example, I want to eventually start focusing on expanding my operations. But how? Adding a new market? Asian markets? European markets? Day trading or maybe something different?

Or stuff like having a business plan. Thanks for the reminder @speedo . I already have one and have trading rules for how to manage my operations. That's not to say it can't be refined even further.

Anyway, thanks to everyone who's taken the time to write and give me comments on this. It's appreciated.

Good luck, and I admire your guts. Sometimes, it's worth having a shot of doing what we dream about doing in spite of everyone saying it cannot be done. Only you know what you are capable of truly. Just make sure to reconsider if the heat gets too much - in my mind trading has enough pressure as it is without having to fight under-capitalization.

 

[themickey]

Good luck, and I admire your guts. Sometimes, it's worth having a shot of doing what we dream about doing in spite of everyone saying it cannot be done. Only you know what you are capable of truly. Just make sure to reconsider if the heat gets too much - in my mind trading has enough pressure as it is without having to fight under-capitalization.

Yup, if we could trade forever without making blunders. But making mistakes happens, more so when starting out, and therein is a major issue which is too often overlooked or swept under the carpet of trading reality world.

 

[Howard]

Good luck, and I admire your guts. Sometimes, it's worth having a shot of doing what we dream about doing in spite of everyone saying it cannot be done. Only you know what you are capable of truly. Just make sure to reconsider if the heat gets too much - in my mind trading has enough pressure as it is without having to fight under-capitalization.

Thank you! No guts, no glory, right? : )

Maybe I’m crazy, but I don’t really feel that that way as I leave my old job behind with job security, i.e., an offer to come back if I want to. What I’m risking is basically the alternative cost (and my savings).

I definitely felt the pressure you mention the last time I was at it full-time, but then I was trading a $5000 account and living on credit cards. I was not sufficiently prepared either.

When I picked up trading again (after embarking upon an education in a different field), I decided that I did not want to go back to trading again until I was fully prepared and had tied down all loose ends. It took me far longer than expected and I suppose I could still continue preparing and save up money, but time is finite in this lifetime (something I’m becoming increasingly aware of) and I feel it’s time.

The worst that happens is that I need to start working again in 6 months, but hopefully I’ve learned a ton, grown my account and can find a job that’s more compatible with trading on the side.

 

[Howard]

hi, I do a combination of daytrade/swing trade futures market. Spreads and a little outrights.

If you have been trading for 12 years and are at the point where you are developing your own proprietary tools, I don’t think you need anymore advice here.

Good luck!

Interesting. Seems like you’ve done exceptionally well. Since account size and returns seems to be a common worry in the thread – mind me asking what a typical return is for you and how much capital you employ for your operations?

If you don’t want to share that – I perfectly understand that as well.

As for proprietary tools, I feel that’s a must in this day and age. I also feel fairly confident in my trading methodology part. I do feel it's a professional approach. The advice I’m seeking is more related to the professional side of things and if there’s anything that would be smart to do that I may have overlooked. Common pitfalls, socialization/isolation, etc.

Thank you and regards!

Howard

 

[Howard]

Again, you're more than welcome.

A simple tear sheet should suffice. A monthly grid ... with performance month by month, such as you find at https://www.coquesttradersresearch.com/

We do at our firm, but I did it before hand too. It's a shortcut guide to your performance. Takes like ... 3 minutes a month to do, once you have a spreadsheet spit the calcs out for you. 3 minutes ... max

In addition to that monthly grid? You'll want to know your annualized return (not average, but annualized) ... your max drawdown period, your max drawdown month. Then, in addition to that if you want to get fancy? You can calculate your Sharpe Ratio and Sortinio Ratio, and put that on there as well.

You do that?

Money will almost find you.

Hi,

Thank you for your comment and congratulations on your success. I’m listening. : )

I also read your post in that other thread, but I still feel you’re comparing apples and oranges as you specifically mention people managing very large sums of money, i.e., fund managers. In my mind, that’s vastly different than day trading futures as an independent trader. With regards to scalability, unless you’re scalping ticks (any maybe even then), the ES is highly scaleable due to the sheer liquidity it offers during RTH. It’s not comparable to trading penny stocks as I believe is the methodology utilized by Timothy Sykes.

Should an individual find himself maxing out the liquidity of the ES – the other indices can be added as well using the same or a similar strategy as they typically correlate well.

I will definitely document my trading operations and track record moving forward.

I wonder if people on this thread thought I was planning on sustaining a living by withdrawing montly expenses on a $15 000 account? That’s certainly not the plan at all.

My plan is to compound/scale my account by adding contracts in line with capital growth. There will be no withdrawals in the first 5 months and I will have to evaluate what to do from there depending on where I am, how my progress have been and how I feel about all this.

Best regards.