Full-time Trading Advice for a 22 Year Old

[Butterball]

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.

To think taking profits protects you from losses is amateur advice. "Real traders" manage risk, being a "real trader" has absolutely NOTHING to do with taking profits daily.

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

So you weren't really telling the whole picture did you. In reality your trading account is likely significantly bigger than $150k since you dip into reserves when you need to in order to top up your trading account.

 

[DHOHHI]

It's not that hard to understand ... really.

At least for anyone who has ever owned and/or managed a business.

Good analogy! And similar in how things often turn out. If not mistaken, from years ago I think the failure rate of small businesses was 80-90% which is probably close to what the success/failure rate is in trading.

One other thing I would recommend to anyone thinking of starting full time .. have some extra cash built up to live off of early on. And if possible, don't have a lot of debt hanging over your head as that just puts more pressure on you to make even more $$$.

 

[DHOHHI]

To think taking profits protects you from losses is amateur advice. "Real traders" manage risk, being a "real trader" has absolutely NOTHING to do with taking profits daily.

So you weren't really telling the whole picture did you. In reality your trading account is likely significantly bigger than $150k since you dip into reserves when you need to in order to top up your trading account.

If you feel it's amateur advice so be it. I have 20 years of experience of full time trading. So how do you manage risk if a stock gets halted? How do you manage risk if a company comes out and says they have to restate 3 years of financials? I could go on and on about how you often can NOT totally manage risk. But you can manage profit taking. That's a CHOICE. Managing risk actually involves uncertainty that you cannot control.

No, I'll repeat. My trading account is $150K. That's all I trade. Other assets are investments. And I've never had to add more capital to my trading account. Only thing I've ever done there is draw down money out of the account to put into the bank to offset living expenses.

I'm not here to toot my horn but over the years I've had 76% winners. Your assertion that taking profits is amateurish suggests you're not actually a trader. Some traders go home flat EVERY DAY! I don't .... I will carry some positions multiple days or even a week. But taking profits every day is a valuable variable in the quest for success in trading for a living.

We're you trading in 1999? 2000 and the next few years? Lots of buy and hold investors got trashed as the market tanked. Being flush with cash during those years allowed one to actually put on trades most every day while the market slid lower and lower. If you were 90% invested in those years then you likely took a substantial hit. NASDAQ went from 5100 to as low as high 1300's. That's a 70+% decline. Similarly S&P lost 60+% from high near 2000 to the low in 2008-9.

 

[lovethetrade]

It's quite simple if you know what to look for. If you don't know what to look for then of course its going to seem like mission impossible.

If you don't know what to look for then the next logical step is to find someone that can teach you. It'll save you 10 years of trying to work it out yourself.

Its important that you find someone that really knows what to look for not failed traders turned salesmen that you see all over the place saying this is how hedge funds trade.

Once you know what to look for, learn how to manage your money and risk.

GL