... OK. Where shall I start?
First, at the risk of being frowned upon, I must again swing the warning finger...
1. Yes, you must be prepared for failure.
2. No, you shouldn't prepare for failure.
Does this make any sense? Well, my point is that you should have a backup plan before jumping into throwing away all your capital. On the other hand - You MUST have confidence that you will make it.
You are what you think you are. You are your own self-fulfilling prophecy. If you have the goal and image of success in your head at all times - You may succeed. It will also help you get over drawdowns, which can be initially devastating. The longer you trade, however, the better you will become, and with it comes rising confidence and from confidence comes capital commitment and from that eventually comes profit. Until then, however, it's a long journey. Probably longer than you might expect. You should have an undestructable self-confidence and discipline in pursuing your goals.
Or as Paul Arden titled his book: "It's not how good you are, it's how good you want to be."
People on this thread say all sorts of things. They said 90% of Traders don't make it. This is not an accurate figure anymore. Actually, latest stats say that 97% of Stocks - and 99.6% of Futures Traders ultimately fail in their pursuit.
An article mentioned recently said that the number of active "semi-professional" Traders has decreased significantly over the last 3 years. As you must realize, these people were full-time traders, not beginners.
Please realize the numbers you're up against, and don't jump head-over-heels into your pursuit.
Superior Excellence is just the beginning! You must be excellent. You shouldn't even start committing capital before you are.
And let me say this: 70K in your first year? NO! Yes, it can be done, but not during your learning curve. And particularly don't aim for it - You'll just be motivated by greed.
What you should focus on is how much you could lose in your first year, not how much you can make. I'm dead serious! If you have a great loss-plan, then the (hopefully larger) wins will outdo them and you'll be fine off. Always know how much you're risking on a single trade, and try not to risk more than 2%, if that.
Be disciplined. Throw the money idea out of your headspace. If you want to make $130K, then go back to your old job. If you want to be a Trader, learn how to trade first.
I'd recommend you trade by simulator for the first 6 months. That way, chances are higher that you'll actually end up with a smaller loss / larger profit at the end of year 1. If you've learned well, you can catch up to your goal in the 6 months after. If you jump right in, you can realistically lose it all in 1-2 months.
Use your $40K for backup and living. Live a quiet and studious lifestyle. Don't go out. Study instead. You cannot afford to lose focus during this important learning period.
If you can Go through 1-3 good Trading books a week, making notes on each page's margin as to what's important, plus writing down extra stuff in an exercise book high-school style, collecting the good insights and compiling them well afterwards, by for example writing a book, even better. On top of that, you should study charts in all timeframes for 5-6 hours a day. The "google eye" effect is a first indication of success.
Use a good charting software for all this. eSignal is my favourite (I know I'm gonna get curry here now LOL), and is, with the restructurization of IDCO going to outdo all competitors, such as TradeStation. IMHO it long has, anyway. I have Investor R/T, Sierra, Medved QuoteTracker, OmniTrader, TradeStation and many more - But eSignal today tops them all by matters of functionality and reliability. If you don't want to spend so much money and are just starting to learn, you could use QuoteTracker, with IQFeed. But again, it's up to you.
Forget about money. You're not here to make money. You trade to trade well. Turn you P/L into a % figure, not $. In a frontend like Futures-Trader you can do that per mouseclick. Don't ever look at $-term P/L figures, it doesn't work. Forget about money.
Let me say this here before I finish: I have a mere $60K in my Scalping account and I often make a few thousand dollars a day trading the ES/NQ with it. I almost made $3K today with just 3-6 contracts at a time. I draw on it all the time, too. It can be done, with practice and patience. The rest of my money is in other accounts (longer-term trades and for hedging my scalping account), my residence, business, gemstones, jewellery, sports cars- you name it. Try too keep as much of your equity as you can out of your high-risk accounts. Trust me. You'll remember these words one day. Don't be greedy. If you can put food on the table and fuel in the car, be happy. Be very happy.
If you survive, and follow these rules, you can make more than me now within 3-5 years.
For now, however, don't fund your account with more than $4K. Any additional deposits will indirectly go into "Scientist's Life Improvement Fund".
Amen.
Work hard and and you will be rewarded. Good Luck to You.
Yours Sincerely,
~The Scientist
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