If your day trading profit is more than your day job, will you quit your day job?

Quote from innovest_11:

But i have some big questions:

- this means my trading account will not grow as quickly?
- i have lots of commitments kids houses car, so this is definitely no no?
- i hate my current job...

Any advice?
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Just from the numbers you've given I'd say you are not in a position to quit, especially if you have responsibilities to a family.

I would put together a strategy, say plan to work another 5 years, and during this time save every possible cent, make sure your strategies are bulletproof and try to get more capital from other sources. In five years revisit the question.
 
Quote from TD80:

Perhaps the more appropriate question is can you survive a 2 year drawdown with no other source of income, and still be around with enough capital when your strategies bounce back?

The thing with trading is your capital is the only growth engine. It isn't like a high barrier to entry business where you pay off a building, or factory machines, or you have a structural advantage, and thus you can generate better returns with less capital outlay in the future.

It is very difficult in trading to put up high barriers to entry and thus improve your margins and thus do more with less capital.

I would suggest a rule of thumb of either in a year you expect to make 5x your current salary, or your lifestyle is such that you can live for years off of principal and still come back and run your money and make reasonable returns and barely even be effected by your living expenses.

I know a surgeon making near 7 figures who has a negative net worth and is probably living near paycheck to paycheck. Everything is relative.
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Thanks for your sound advice
 
I understand your wanting to trade full-time, But you might want to take a more realistic and conservative approach..

I'm just throwing ideas around for you to think about but..

How is your family doing? have kids? how old? do they need the stability of you having a full-time job? Whats the risk reward for trading full-time? (maybe make good money, freedom, be your own boss sorta thing vs. Losing alot of money, family suffers, debt, blah blah blah..
 
Quote from innovest_11:

The above seems so right, how do you know :D

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He knows this because nearly ALL successful traders average down and also realize that stop orders are a joke!
 
Quote from innovest_11:

The above seems so right, how do you know :D

But avg down is a devil which i dare not touch, it means adding to your mistake, i have numerous cases of using avg down which sometimes turn out to be huge huge losses, so have stopped using it.
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Because if you had an account large enough to withstand averaging down strategies/trading without stops/moving stops further away, you wouldn't have a day job.

And if you were trading a system with fixed rules for trade setup qualification, entries, profit targets and protective stops (such as Geez does), trading larger size wouldn't require "guts" or induce fear that with larger size on you'd take profits too soon or be unwilling to cut a loss. It would be exactly the same as what you're doing now, but with larger quantity.

Take your $5K a month and save it for 5 years.
 
Quote from innovest_11:

But i have some big questions:

- this means my trading account will not grow as quickly?
- i have lots of commitments kids houses car, so this is definitely no no?
- i hate my current job...

Any advice?
More...

At 5k to 10k per month...highly recommended you pay down (get rid of) a ton of those debt commitments (auto, credit cards, lower the mortgage and any other creditors).

In addition, save up at least 1 - 2 years of income to equal your salary at your other job. This saved income is to be put away in a special account at your bank and cannot be used as part of your trading capital. It's to be used to maintain your current lifestlye.

Further, if you can take a leave of absence from your job to test full-time trading...do it and make sure your spouse knows how you're doing (good or bad) so that she won't freak out the day you decided to quit your job if/when you reach that point.

Also, whatever payment schedule you're on with your job...continue that payment schedule with your trading profits if/when you decide to quit your job.

Last of all, if you're not comfortable in increasing your position size...don't do it until you're ready because most traders don't have family commitments and don't understand the psychological barrier involved in increasing position size when profitable even if it doesn't violate any of your money management rules. Therefore, do it very slowly over a one year period and not in one day. As soon as problems arise...immediately go back to your prior position size instead of increasing the bet in an effort to make back prior losses.

The point is that when you go full-time...trading becomes a business and like any other business while supporting a family...how you run the business is often impacted via what's going on in your family.

P.S. I'm a full-time trader and I support my family. If you have any problems or questions about how to manage your new change in life after quitting your job...pm me for advice even though I quit my job to go full-time about 8 years prior to starting a family.

Mark
 
What exactly are you after here? Other people to give you help, support? YOU should know what to do....


The real question is why are you asking this question? FEAR...know you can't or will not do it?
 
I very much agree with the advice to pay down debt. Having no debt takes a lot of pressure off, and lowers your income needs. And if you are really making $5 to $10K consistently, paying down debt and growing your trading account should be easy enough to do over a couple years at most. I would see how it goes over this time.
 
Quote from innovest_11:

ok, my performance only recently improved from 5k per month to 10k per month.

...
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If you don't mind me asking, what are you trading (i.e. stocks, futures, options, currency?)

And what is the absolute min starting balance needed to be at that level?

What are your risk settings? i.e. is it possible to lose everything in a single trade or is the loss always limited?
 
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