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Going fulltime dilemma
- Thread starter innovest_11
- Start date
Quote from dalen:
Sorry but if you have to ask other people these questions and can't answer them yourself, then no don't quit your day job. Best of luck
I have to fully agree with the above.
Another question that hasn't been addressed is the profile (for lack of a better term) of your profitability. You've made 100k over the last 4 months -- but what was the time frame, over how many trades and over how many markets/stocks? Are you daytrading and going flat at every session end, making between 1-2k daily with an occasional losing session? Or are you swing trading, making one or 2 decisions per market per week, having multiple smaller losers but one big winner that puts you in the black?
The trader with a profile closer to that of the daytrader will have a FAR easier time transitioning to trading full-time. The trader that makes $500 a day consistently on an intraday time-frame will be much better prepared for going full time than a swing trader making three times as much in the same month. When you're dealing with funds on an individual scale and trading with your own money, it's all about consistency and frequency, not only to get the bills paid, but for your own peace of mind. You need to get very down to nuts-and-bolts of where and how often your profits come, because unless you are retired with 0 expenses and a nest egg on top of your trading account to live off of, waiting around for swing trades to come to fruition while the clock is ticking on your next mortgage payment or amex bill will be simply undoable. Never underestimate the destructive force of pressure when it comes to your trading account, it is the single most-often traveled road to ruin.
Saw your profile registered 2002, true fulltimer who has been around a long time, my profile has been mixture of day and swing trading, day trading those like bidu, aapl, nflx, though i must admit nflx is really a very volatile monster, and a couple of other stocks
U r right, pressure from the high expense monthly is great, which makes me so undecisive for so long, i cannot imagine if i don't have monthly income, cause i really hate to take out from my trading account
U r right, pressure from the high expense monthly is great, which makes me so undecisive for so long, i cannot imagine if i don't have monthly income, cause i really hate to take out from my trading account
Quote from illiquid:
I have to fully agree with the above.
Another question that hasn't been addressed is the profile (for lack of a better term) of your profitability. You've made 100k over the last 4 months -- but what was the time frame, over how many trades and over how many markets/stocks? Are you daytrading and going flat at every session end, making between 1-2k daily with an occasional losing session? Or are you swing trading, making one or 2 decisions per market per week, having multiple smaller losers but one big winner that puts you in the black?
The trader with a profile closer to that of the daytrader will have a FAR easier time transitioning to trading full-time. The trader that makes $500 a day consistently on an intraday time-frame will be much better prepared for going full time than a swing trader making three times as much in the same month. When you're dealing with funds on an individual scale and trading with your own money, it's all about consistency and frequency, not only to get the bills paid, but for your own peace of mind. You need to get very down to nuts-and-bolts of where and how often your profits come, because unless you are retired with 0 expenses and a nest egg on top of your trading account to live off of, waiting around for swing trades to come to fruition while the clock is ticking on your next mortgage payment or amex bill will be simply undoable. Never underestimate the destructive force of pressure when it comes to your trading account, it is the single most-often traveled road to ruin.
I was in the exact same situation as you when I decided to go full time. You need to have enough money to cover your monthly expenses for 1-year, even if that means trimming down your monthly expenses. Sell a car, stop eating out, etc. You gotta make some sacrifices to get rich. No one ever got rich by spending money.
You absolutely, positively have to remove the pressure of having to generate $'s to cover living expenses because it will be such a high burden it will cause you to make mistakes.
My advice...stay at the day job for another year, maybe more. Wait until you can set aside 72k for monthly expenses for a year. Less if you can cut some of those expenses. Then go FT with the $ amount that you're comfortable with.
You absolutely, positively have to remove the pressure of having to generate $'s to cover living expenses because it will be such a high burden it will cause you to make mistakes.
My advice...stay at the day job for another year, maybe more. Wait until you can set aside 72k for monthly expenses for a year. Less if you can cut some of those expenses. Then go FT with the $ amount that you're comfortable with.
The number one most important thing to consider is your health. Without that you have nothing. Why are you only getting 6 hours of sleep? Is it the trading or the job? If it is the trading, cut down on that. How close are you to retirement? If you are close to retirement just continue to build your account. The market should (I hope) be there when you retire. Pay down your debts, pay off your mortgage. Is there anyway to reduce the $6k monthly expense? Reduce your stress and you will sleep better and improve your health.
Money is great but it ain't everything.
Money is great but it ain't everything.
I saw this thread and thought I would offer another suggestion.
Keep the day job until you are downsized.
I trade K200 and Currencies in the evening. This has worked out very well for me. I have thought I was going to be downsized several times over the last few years and it never happened. I cannot trade every evening, but usually Sunday night I get a full day of trading in. I also try to get the last hour of Japanese market in every night. The combination of secure dayjob income with trading income is very good. Some really great moves over the past year, much easier for me to trade than ES. If the market is sideways or opens around yesterday's close I just go do something else, or trade a different market.
If I get downsized tomorrow I will transition easily to full time.
Change your perspective from 'EITHER/OR' to 'BOTH' day job and trading.
I enjoy doing both....
Good trading,
Keep the day job until you are downsized.
I trade K200 and Currencies in the evening. This has worked out very well for me. I have thought I was going to be downsized several times over the last few years and it never happened. I cannot trade every evening, but usually Sunday night I get a full day of trading in. I also try to get the last hour of Japanese market in every night. The combination of secure dayjob income with trading income is very good. Some really great moves over the past year, much easier for me to trade than ES. If the market is sideways or opens around yesterday's close I just go do something else, or trade a different market.
If I get downsized tomorrow I will transition easily to full time.
Change your perspective from 'EITHER/OR' to 'BOTH' day job and trading.
I enjoy doing both....
Good trading,
Positive for the month, still thinking hard of going fulltime
But one thing about going fulltime is how to prevent over trading, meaning how to avoid taking a trade when the setup is not really there. Unlike if u have a job, u may not take a unnecessary risk if the setup is not there
Fulltime trading may be so bored that if no setup available, how to prevent taking a trade out of boredom, or other factors like 'need to trade since now I'm fulltime'
But one thing about going fulltime is how to prevent over trading, meaning how to avoid taking a trade when the setup is not really there. Unlike if u have a job, u may not take a unnecessary risk if the setup is not there
Fulltime trading may be so bored that if no setup available, how to prevent taking a trade out of boredom, or other factors like 'need to trade since now I'm fulltime'
All good advice so far.
I'd like to comment on one thing though. I don't understand how so many folks can fathom of going full time with such a small balance. There was an entire thread I read that had most people agree that $50,000 was enough. Here you are saying that $200,000 is enough. Your expenses are $72,000 per year (which is about right to support a family, car, house etc.) That would mean you need to make around 34% per year, just to support your family and not draw down on your principle capital.
Do you really think that you can sustain a 34% return per year without any down years and are you willing to bet your families lives on that? Considering that the vast majority of professionals can't manage that return, let alone amateurs, you should reconsider going full time. IMHO, do not even think about quitting your full time job until you have AT LEAST 7 figures, and at that point, think long and hard still.
Congrats on your recent returns, but you should not assume you can repeat that many times over (until you prove it to yourself). My expenses are a little less than yours, but not far off. My trading account has a little more than yours, but not far off. I would not consider going full time until I had AT LEAST 2MIL, but that's just me, I might be more cautious than most. But we are talking about our families here, and I would not take the risk until success was highly probable with a lot of room for error...
Either way, I wish you well.
I'd like to comment on one thing though. I don't understand how so many folks can fathom of going full time with such a small balance. There was an entire thread I read that had most people agree that $50,000 was enough. Here you are saying that $200,000 is enough. Your expenses are $72,000 per year (which is about right to support a family, car, house etc.) That would mean you need to make around 34% per year, just to support your family and not draw down on your principle capital.
Do you really think that you can sustain a 34% return per year without any down years and are you willing to bet your families lives on that? Considering that the vast majority of professionals can't manage that return, let alone amateurs, you should reconsider going full time. IMHO, do not even think about quitting your full time job until you have AT LEAST 7 figures, and at that point, think long and hard still.
Congrats on your recent returns, but you should not assume you can repeat that many times over (until you prove it to yourself). My expenses are a little less than yours, but not far off. My trading account has a little more than yours, but not far off. I would not consider going full time until I had AT LEAST 2MIL, but that's just me, I might be more cautious than most. But we are talking about our families here, and I would not take the risk until success was highly probable with a lot of room for error...
Either way, I wish you well.
Quote from Churchill:
All good advice so far.
I'd like to comment on one thing though. I don't understand how so many folks can fathom of going full time with such a small balance. There was an entire thread I read that had most people agree that $50,000 was enough. Here you are saying that $200,000 is enough. Your expenses are $72,000 per year (which is about right to support a family, car, house etc.) That would mean you need to make around 34% per year, just to support your family and not draw down on your principle capital.
Do you really think that you can sustain a 34% return per year without any down years and are you willing to bet your families lives on that? Considering that the vast majority of professionals can't manage that return, let alone amateurs, you should reconsider going full time. IMHO, do not even think about quitting your full time job until you have AT LEAST 7 figures, and at that point, think long and hard still.
Congrats on your recent returns, but you should not assume you can repeat that many times over (until you prove it to yourself). My expenses are a little less than yours, but not far off. My trading account has a little more than yours, but not far off. I would not consider going full time until I had AT LEAST 2MIL, but that's just me, I might be more cautious than most. But we are talking about our families here, and I would not take the risk until success was highly probable with a lot of room for error...
Either way, I wish you well.
+1.
High hurdle rates increase the probability of failure. And in this case failure has a substantial cost.
i read through this, the OP is asking the right questions, but has way too high expenses to even think about giving up a good paying dayjob.
if you can trade, the hardest parts on your own are discipline, and psychological for not forcing, reacting well when you have bad days, knowing when NOT to trade, etc. if you have a day job, it's easier to let those things roll off your back.
if you can trade, the hardest parts on your own are discipline, and psychological for not forcing, reacting well when you have bad days, knowing when NOT to trade, etc. if you have a day job, it's easier to let those things roll off your back.