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Best route for a newbie with limited capital?
- Thread starter Persepolis
- Start date
I don't think that capital or working in the financial industry has much of anything to do with being a successful trader.
First off, if you want to be a trader, Futures not stocks or options, make the most sense. Why? 1. Much better tax treatment. 2. No pattern day trading rules.
Second, to be successful, you only need three things : a trading strategy which over the long run is profitable, the discipline to actually implement that strategy, and last, just enough capital to survive a drawdown.
Do you have a strategy? Get to work. Pick a futures contract (TF is my suggestion). Then consider what trading strategy would like should be profitable. For example, research for example the 5/20 moving crossover system. In other words, when the 5 bar average crosses over the 20 bar average you buy, and vice versa. Take a look at how this would have performed, and what parameters you would use to trade it.
Got a fully developed system? Great, live sim test it to see if 1. it works, and more importantly, if 2. you can follow it.
Then figure out what you think your maximum drawdown would be, multiply that times 3, and begin live trading with just one contract.
None of this is capital intensive, and none of this has anything to do with a job in finance. Good luck!
First off, if you want to be a trader, Futures not stocks or options, make the most sense. Why? 1. Much better tax treatment. 2. No pattern day trading rules.
Second, to be successful, you only need three things : a trading strategy which over the long run is profitable, the discipline to actually implement that strategy, and last, just enough capital to survive a drawdown.
Do you have a strategy? Get to work. Pick a futures contract (TF is my suggestion). Then consider what trading strategy would like should be profitable. For example, research for example the 5/20 moving crossover system. In other words, when the 5 bar average crosses over the 20 bar average you buy, and vice versa. Take a look at how this would have performed, and what parameters you would use to trade it.
Got a fully developed system? Great, live sim test it to see if 1. it works, and more importantly, if 2. you can follow it.
Then figure out what you think your maximum drawdown would be, multiply that times 3, and begin live trading with just one contract.
None of this is capital intensive, and none of this has anything to do with a job in finance. Good luck!
Go trade SIM until your profitable. Don't get out of SIM until you can consistently produce consistent returns within the framework of the entry and risk management rules as described by your system. Treat it like real money.
Then, when you step into the live environment, don't change your rules. The common mistake with being profitable on sim and sucking trading live is that you will 95% guaranteed that you will change your style in the live enviroment, ie. going against your rules, ie. thinking the market cant keep you at a loss forever, ie. being a dumbass
The only experience your going to gain as a trading assistant is how to manage multiple orders of dunkin donuts for the various traders in the office and then distributing their coffee correctly.
Then, when you step into the live environment, don't change your rules. The common mistake with being profitable on sim and sucking trading live is that you will 95% guaranteed that you will change your style in the live enviroment, ie. going against your rules, ie. thinking the market cant keep you at a loss forever, ie. being a dumbass
The only experience your going to gain as a trading assistant is how to manage multiple orders of dunkin donuts for the various traders in the office and then distributing their coffee correctly.
Quote from Persepolis:
Well he was honest with me and said that going prop I will be facing high monthly costs in the first year and would be make very limited income. I talked to a trader who started prop with 5K and later switched to retail and he basically shared the same advice. He said its hard to build your account the first 2 years so having those monthly costs just eats away at your portfolio.
He encouraged me to go retail which is 25K+, but again I don't have access to that type of funding.
I was looking at financial services firms in Chicago, I would like to work for investment, hedge fund, financial services type company. Obviously, I wouldn't work the floor or manage portfolios, but even at entry-level assistant in those companies I feel like I could gain some valuable experience for later on when I decide to become a full time trader.
I was just wondering if someone wanted to work for hedge fund, financial services company, or trading company, at an entry-level position what is the best way to go about that approach?
Lets be realistic none of those companies are going to let me trade their capital, so I'd rather get an entry level job and at least gain some experience with them and possibly advance within the company.