Another aspect that may have been overlooked is "overhead"... From my experience and the experience of others it is very difficult to get ahead as a beginning trader if you are accustomed to material "trappings" such as one who receives a paycheck every week and has no fluctuation in their income or in the "timing" of receiving such income...This major "sacrifice" is something few aspiring traders are willing to make, presumably until it has been taken away from them and they realize just how much they love the "game" regardless of whether not they become as rich as they assumed they would prior to entering the trading arena...
I find it is much easier to trade if you own most of what you would finance provided you had the steady income to justify the monthly payments...Best to pay off your car, eliminate credit card debts, pay off your home or rent something cheaper...That way you can have a modest living expenses as your core base and anything that you make above or beyond this amount can be set aside for some later date...
Also, it is NEVER a good idea to think of what you could buy with your day's winnings...Because inevitably you will have drawdowns and give back exactly what you made and will feel quite defeated...It is best to simply determine a date to withdraw any excess capital and reward yourself, go back to the beginning equity amount and begin anew...Obviously, if the account is too small this is not a reality...But if you have a decent sized account it is a good idea...
Basically, my main point is that you have to have all of your affairs in order PRIOR to entering the game...The fewer costs or overhead you have the better the chances of survival...It is next to impossible to try and pay the bills from your trading at the beginning and to consider this as your sole reason to begin trading is futile...Simply put: it will not happen, not in this environment...If you are constantly thinking about having to pay bills with your trading income, you will never take trades based on the action; you will take trades because you HAVE TO make x or y dollars...Ask any traders who started out and traded with big overhead and had to finance their lifestyle with trading profits; it is a tough and extremely stressful road...You will find yourself constantly reacting, second guessing, filled with hesistation...It is a brutal experience and I think everyone in the beginning stages goes thru it; maybe some are able to elimate these psychological demons, guys just out of college and accustomed to being poor...FOr someone in their 40's, very tough predicament
I remember an experienced and veteran floor trader once telling me that alot of the guys on the floor who leased their seats did not exactly "blow out"; instead they just could not meet their overhead...At that time seats were leased at about $7,500 per month and alot of the traders were covering their lease payments but could not cover their living expenses...When you consider, it required over $90,000 per year just to "breakeven", it puts into perspective the advantages we have as electronic traders...Nevertheless, it does not mean that it is any easier to cover one's overhead in the beginning...
I find it is much easier to trade if you own most of what you would finance provided you had the steady income to justify the monthly payments...Best to pay off your car, eliminate credit card debts, pay off your home or rent something cheaper...That way you can have a modest living expenses as your core base and anything that you make above or beyond this amount can be set aside for some later date...
Also, it is NEVER a good idea to think of what you could buy with your day's winnings...Because inevitably you will have drawdowns and give back exactly what you made and will feel quite defeated...It is best to simply determine a date to withdraw any excess capital and reward yourself, go back to the beginning equity amount and begin anew...Obviously, if the account is too small this is not a reality...But if you have a decent sized account it is a good idea...
Basically, my main point is that you have to have all of your affairs in order PRIOR to entering the game...The fewer costs or overhead you have the better the chances of survival...It is next to impossible to try and pay the bills from your trading at the beginning and to consider this as your sole reason to begin trading is futile...Simply put: it will not happen, not in this environment...If you are constantly thinking about having to pay bills with your trading income, you will never take trades based on the action; you will take trades because you HAVE TO make x or y dollars...Ask any traders who started out and traded with big overhead and had to finance their lifestyle with trading profits; it is a tough and extremely stressful road...You will find yourself constantly reacting, second guessing, filled with hesistation...It is a brutal experience and I think everyone in the beginning stages goes thru it; maybe some are able to elimate these psychological demons, guys just out of college and accustomed to being poor...FOr someone in their 40's, very tough predicament
I remember an experienced and veteran floor trader once telling me that alot of the guys on the floor who leased their seats did not exactly "blow out"; instead they just could not meet their overhead...At that time seats were leased at about $7,500 per month and alot of the traders were covering their lease payments but could not cover their living expenses...When you consider, it required over $90,000 per year just to "breakeven", it puts into perspective the advantages we have as electronic traders...Nevertheless, it does not mean that it is any easier to cover one's overhead in the beginning...
For now, I will be happy just to be slow and steady.
