...Opened up a new account this time last year with $10k, went OK but around mid-year got really stressed with work and CFA study and decided that I needed to multiply my account hugely or else no one was ever going to take me seriously (in terms of turning this into a full-time gig at a firm) so risk management went out the window. Instead of my usual 1-2% per trade (hard limit on 2) I was putting 6-8 up on each trade, few went astray, balance went down, risk went up, you know the rest. Pulled the pin at $3k.
Most profitable on equity market indices, S&P500 (cash rather than futures, spreads were 0.2 better) in particular. However I did dabble in oil (brent and WTI), gold and currencies, especially during the final month, which as you'd expect weren't profitable overall.Now I've got to the end of the year I am really considering my options, which broadly are:
Start up account again (same sorta $10k is manageable financially) and trade whilst still working full time (and level III in June) with a view to somehow leveraging this into a full-time gig.
Move somewhere for a few months and try and get a foot in somewhere (London, singapore, hong kong?? No idea on this).
Register for Topstep trader and get funded that way.
Ultimately the aim would be to work for a prop firm or on HF desk as I get a lot out of other people's experience and advice in general, and I'm sure the same would apply here...
Its a good start that you're honest about what's causing your trading problems and what you've been doing because most traders will just say it doesn't work and that they studied hard without any other info. Those traders are in
denial.
With that said, every trader is doing something that's sabotaging their trading although the reasons may be different to another trader that's struggling. In your case, these are the obvious reasons that needs to be resolved before you trade with real money again.
1) You need to be properly capitalized. Its a statement you'll often here from veteran traders without further explanation about a specific number. It's very simple. You need to determine how much money you need to live on that includes paying all your bills and some emergency money to equal to a minimum of one year's income. For example, you sit down and do the math...you determine you need to earn 30k per year because that's what you made last year from your job and you didn't have any financial pressure. That 30k is what you need to save for your savings account to get you by for one year while you're learning to trade. Its an absolutely critical to keep that financial pressure off your shoulders...minimizing the chance that you'll violate risk management...minimizing the chance that you'll trade on trading days when there's no trade setup or trade during trading periods that you struggle the most. Thus, being properly capitalized minimizes the financial pressure and psychological pressures that would encourage intuition trading (taking trades outside of your trading plan).
What about the actual trading capital...same dollar amount as your one year living expenses. Its that simple.
If trading is serious and not some hobby...you'll do whatever it takes to get properly capitalized. You'll get a 2nd job or 3rd job, you'll get a roommate or live with someone to cut your expenses, you'll get rid of any luxury expenses (e.g magazine subscriptions, eating out and so on)...just one year of serious saving of income that will give you a fighting chance because just studying the markets hard is not enough.
You said - I had to drain my account to pay some bills.
I just don't believe someone can learn how to
trade for a living in less than one year with all the pressure of needing income in that first year although your route is different from that...you're trying to work for a prop firm or HFT firm.
2) You mention your
goal...prop firm or HFT. Lets pretend you're lazy and think having a 10k trading account is all you need and is gonna catch the attention of a HFT firm if you double or triple your account. It ain't gonna catch someone's attention in the world of HFT.
In contrast, it could prove you're ready to go prop firm. Yet, lets pretend you're have discipline problems in your trading or you're not sure if you have discipline problems in trying to stick to a trading plan especially when stressed.
That's were
TopStepTrader may be useful. You'll be able to determine if you have the ability to trade within a firms rules, you'll discover if you'll stick to your own trading plan and you'll learn things about yourself as a trader that you didn't know was there and is sabotaging your trading.
http://www.elitetrader.com/et/index.php?threads/topsteptrader.275976/
In fact, I recommend such a process for any failed trader that failed on their own. A failed trader should try something like Topsteptrader even though they may not have the goal of working for a prop firm. That discovery process will help them become realistic about what they see as a trader when they look in the mirror...they may discover that they don't have the psychological characteristics to be a successful trader. That realization would then allow them to move on to another career along with preventing further financial/psychological damage.
I recently met someone that's been a failed trader for 2 years. He failed because he was
not a
discipline trader no matter how many hours he studied the markets and not matter how many books he read about the markets. Yeah, he was properly capitalized and had saved 3 years worth of income plus his trading capital. The clock is ticking for him (he has about 1 year remaining of his saved income and 70% of his trading capital) to reach the prop firm.
He just started Topsteptrader and is already discovering its him...its that discipline to stay focus during trading in stressful conditions. This was something he's been in denial and topsteptrader is allowing him see the problem and now he's re-focus on trying to resolve exactly that problem. Yeah, he's one of those guys that has a trade method that has a positive expectancy in backtesting and he traded profitably on simulator (turning 30k into 160k in 5 months of simulation) but just could
not do it with real money (50k) or within a situation that has real pressure to perform (e.g. topsteptrader).
Getting back to the HFT and trying to reach that goal via a small trading account...forget the silly notion. Seriously, make some phone calls to HFT firm and talk to their human resources department about what they're looking for...you'll see that being a trader with a small profitable trading account ain't it.
Once again about your goals...HFT or Prop. You've seem to eliminated the trade on my own as a career. That's ok because you have two other options but one of them (HFT)...you need to do more research and preferably that involves actually talking to some HFT firms.
I only know two ways of getting into an HFT firm because I know two people that did such although I'm not too familiar with HFT itself.
1) Successful prop trader then gets an entry level job at an HFT firm
2) College graduate student in finance and mathematics that interned with them one summer and then worked for them later upon graduation
I'm sure there's other ways but that's where you'll need to actually talk to some HFT firms.
Stay real about your trading via fixing those things that's sabotaging your trading and become more business like in your trading preparation (e.g. proper capitalization and savings to get you through the first few years without that huge killer called financial stressed).
Good luck, keep it real and hopefully you're one of the few that will reach your goal (HFT or Prop)
P.S. I'm going to assume you actually have a trade method that you've backtested. If so, now go ahead and backtest it on those futures trading instruments you mention plus many other futures you did not trade. Let your backtest results determine which trading instruments you should be trading and when during the trading day you should be trading. For example, someone here at ET had been trading Emini NQ futures and discovered after backtesting 15 different futures trading instruments data he had access to...his best results were Gold GC futures (something he had never traded before) but only for 2 hours in the trading day.
Not something he expected to find out as a
full-time trader. Anyways, will be interesting to find out if his goal is to truly be profitable (if so, he'll trade Gold) or if he'll make the newbie mistake of trading what others were trading or popular discussion at a forum.
Nothing wrong with only trading a few hours per day as a full time trader especially when profitable. For some, they make the error in thinking they need to trade what's popular to trade and do such 5 - 10 hours per day.
Once again, backtesk your trade method and let it decide what you should be trading and when you should be trading. This may be very helpful prior to starting something like Topsteptrader.
