Full-time Trading Advice for a 22 Year Old

Tank47 said:
Hello all,

I have read other posts like this one I am about to post and so far I have not seen what I am looking for; So I want to get this from the start: I am looking for actionable, forward-moving steps.

I have been trading in the world of stocks since I was 19. I made a good bit of money and as the prophecies of stock trading go, lost it to confirm the long term 50/50 balance.

Recently, I have been paper trading options and doing far better than I had ever previously done with stocks. About three weeks in, over 20 trades and I've only had 1-2 negative trades. All said and done, the paper trading account is up about 10k. This to me is very promising. Yes, I know that psychologically, I am walking into paper trading a lot more lenient than I would with my own money; but even still, these results are very promising in my opinion.

That being said, I plan to continue to paper trade for the next few months and begin live trading early next year. Given my losses in the stock market, I will be funding my account with around $3k (yes, I know, that is very small, but I don't care).

I want to be a full time trader more than anything. It's what I wanted for quite some time and I'm very passionate about it.

I know the risks, I've experienced huge negative losses, I understand the environment I'm getting into.

For those of you who are full time traders: What steps, strategies, advice, etc. would you recommend to me for attaining this goal?

I sincerely thank any one who can provide me with good, solid advice.

Thank you.
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Get in touch with me using this link: https://www.linkedin.com/in/whenperformancecounts

I have nothing to sell, maybe we do a skype call, or landline, whatever, but way too much to write here beyond the usual proverbs. Consider it a mitzvah.
Regards,
HG
 
A simple suggestion:

1) Take 90% of the money you can spare for investing and put it in a low cost index fund (SPY).
2) Take 5% of the remainder and invest that into blue-chip stocks
3) Take the last 5% and place that in some speculative trades

This will give you practice with trading, but allow the bulk of your money to accumulate over the long term.

Since you love trading, why not look at getting a job as an investor/trader? Get a degree in Finance or some certifications. Then look for a job at a bank or investment firm. That way you can enjoy the art of trading but not with your own money :)

Then after you build up 10-20 years of experience, your core portfolio should have grown nicely, you'll have lots of industry experience, accumulated sizable savings from working, and will be able to focus on going solo.
 
By full-time trading do you mean trading as your sole profession? As in, you will pay all of your bills/expenses out of the profits earned from trading? In that case it may be useful to figure out the consistent profits you'd need to generate from that initial $3,000 investment in order to live the lifestyle you desire and then ask if you think you'll be able to achieve that rate of return before you run out of capital. Get educated, get a job, trade small, and when you get to the point where your (live money) track record and account size indicates you'd be able to weather the worst market conditions imaginable and still put food on the table, then and only then can you consider truly trading for a living.
 
Tank47 said:
For those of you who are full time traders: What steps, strategies, advice, etc. would you recommend to me for attaining this goal?

I sincerely thank any one who can provide me with good, solid advice.
More...
You won't like to hear this but you are severely undercapitalized to trade for a living. Before I started trading for a living and depending on the income stream I generate I made sure I have a big enough capital base. For myself that means trading capital > $1m, you might be OK with less depending on your income expectations.

However, with trading capital around anything below < 250k you're just setting yourself up for disaster. That's just my personal opinion after doing this for over a decade. Many here will disagree with me and that's the nature of the beast.

Ask yourself this: If you want to run a business that generates 50/100/150k in annual income with mediocre risk. How on earth would you kick start a business like that with just 3k? Common sense is screaming that's way too little starting capital. Yes I know "you don't care" but that's how it is.
 
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Butterball said:
However, with trading capital around anything below < 250k you're just setting yourself up for disaster. That's just my personal opinion after doing this for over a decade. Many here will disagree with me and that's the nature of the beast.

Ask yourself this: If you want to run a business that generates 50/100/150k in annual income with mediocre risk. How on earth would you kick start a business like that with just 3k? Common sense is screaming that's way too little starting capital. Yes I know "you don't care" but that's how it is.
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Clearly $3K won't cut it for many reasons.

But trading with less than $250K does not set one up for disaster. I've traded for 20 years with $150K to $170K most of the time and if you're truly a trader, and take profits daily, and have plenty of BP each and every day you can do quite well.
 
DHOHHI said:
Clearly $3K won't cut it for many reasons.

But trading with less than $250K does not set one up for disaster. I've traded for 20 years with $150K to $170K most of the time and if you're truly a trader, and take profits daily, and have plenty of BP each and every day you can do quite well
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+ 1
 
DHOHHI said:
But trading with less than $250K does not set one up for disaster. I've traded for 20 years with $150K to $170K most of the time and if you're truly a trader, and take profits daily, and have plenty of BP each and every day you can do quite well.
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What does the phrase "If you're truly a trader" mean? Real traders take profits daily? That's ludicrous.

I always have 90% of my entire networth (10% is real estate that we own and live in) in the markets. So if you say you can live comfortably trading a ~$100k account I must wonder if you have other sources of income or capital buffers?

I don't have any other income other than trading, so in turn my trading style is pretty risk averse; I'm a chicken. However, I don't have to panic if I have a -10% year since I have enough reserves to live on as my family's total expenses are < ~$150k annually.

So for anyone who claims they can make a good living off a $100/k account (=networth) my question is: What if you have a down year? How do you pay vacations/kids/residential maintenance/health care? With even only $50k expenses and -10% trading return in a bad year, your account now shrunk to $40k. 60% drawdown on your investable capital. Ouch.

Or let me guess, people around here never really have negative years...
 
Butterball said:
What does the phrase "If you're truly a trader" mean? Real traders take profits daily? That's ludicrous.

I always have 90% of my entire networth (10% is real estate that we own and live in) in the markets. So if you say you can live comfortably trading a ~$100k account I must wonder if you have other sources of income or capital buffers?

I don't have any other income other than trading, so in turn my trading style is pretty risk averse; I'm a chicken. However, I don't have to panic if I have a -10% year since I have enough reserves to live on as my family's total expenses are < ~$150k annually.

So for anyone who claims they can make a good living off a $100/k account (=networth) my question is: What if you have a down year? How do you pay vacations/kids/residential maintenance/health care? With even only $50k expenses and -10% trading return in a bad year, your account now shrunk to $40k. 60% drawdown on your investable capital. Ouch.

Or let me guess, people around here never really have negative years...
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I'll repeat since apparently you don't understand ... "Real traders take profits daily". What's hard to understand here? I differentiate between a trader and an investor? Over the past 20 years I've seen traders blow up by taking home positions only to have something bad happen that either wiped out a nice profit or turned into a big loss. One cannot go broke taking profits. Taking daily profits is like getting a paycheck. You know you've already earned that $$. So you try to replicate that 5 days/week. At the end of the week you see what you made (or lost) versus what your goal/target was.

I didn't say I traded $100K ... more like $150K. And I've traded with as little as $95K back in the 90's. Having about $600K in BP daily makes for a lot of opportunity to make $$$. Further, I have no debt. No mortgage, no car payment, no credit card debt. And kids are grown on their own.

Last you ask how one lives if they have a down year. Easy for me .. the $150K trading account is just part of my total assets. I have IRA's, other brokerage accounts for investing and some other liquid assets. If I have a bad year I merely take $$ from whatever account I need to for paying any bills that might not be covered by profits in that year. It's worked for 20 years for me.
 
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