You did not say what in IT you have been doing, but if you are a skilled programmer, especially of realtime systems, you should consider trading that takes advantage of those skills. Fully automated systems are extremely difficult, but systems that assist you in spotting opportunities or placing trades are not that difficult to code.
Is active trading a viable job for an individual?
- Thread starter BYoung
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You did not say what in IT you have been doing, but if you are a skilled programmer, especially of realtime systems, you should consider trading that takes advantage of those skills. Fully automated systems are extremely difficult, but systems that assist you in spotting opportunities or placing trades are not that difficult to code.
I did IT for 11 years. Then became a full time trader about 11 years ago.
My results have been sporadic, fantastic years where i have printed money and bad years when i lost. My results have been like +300% some years and -30% in others. And everything in between.
I don't recommend trading unless you are a masochist!
masochist - a person who enjoys an activity that appears to be painful or tedious.
To be honest with you, if you have to ask on a message board, full time trading is probably not for you.
You should be naturally and passionately attracted to it. Love at first sight! As a career choice nothing else should even come close.
I agree with Robert. If it were a zero sum game I would not be doing it. As it stands trading futures is about half of my income. So to the question is it possible to make a nice living trading fulltime? The answer is yes. Now we go back to skills and capital. You must have both to be successful. If you thinking about trading fulltime I reccomend that you ease into it. Do something else for income and as you become more successful at trading slowly transition over to fulltime trading.
Wow, first time anyone on ET has ever fessed up to a losing year!
Actually it's been admitted to often. Sure, it get lost in all the bullshit.
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Hey one post wonder. Are you even ready for a string of losing years?
You should know that success can come and go. In boom times everyone is a magician, then when market conditions change, people start losing. Also, most people hardly breakeven risk-wise even in strong bull markets. This is why buy & hold have been touted so many times, and spread risk over time by putting some money in over time. Anything more active, and honestly males are the worst offenders here, and you start losing money very quickly.
If you don't understand why, that's why you need to study. It can take anything between 2 weeks to 20 years. Some never get it even after 20 years..
Being in IT, you may think you can just automate. But, you need an edge to automate first. Your automation will be like a chainsaw sawing your legs off until you find an edge. It's not an edge in itself.
What usually happens is:
1) Put money in strong bull market
2) Go red
3) Go BLOODY red
4) Sell!!
5) Bull market resumes
6) Buy & hold
7) Bear market arrives
8) Holding
9) Selling at bottom of bear market
This is the natural cycle.
You should know that success can come and go. In boom times everyone is a magician, then when market conditions change, people start losing. Also, most people hardly breakeven risk-wise even in strong bull markets. This is why buy & hold have been touted so many times, and spread risk over time by putting some money in over time. Anything more active, and honestly males are the worst offenders here, and you start losing money very quickly.
If you don't understand why, that's why you need to study. It can take anything between 2 weeks to 20 years. Some never get it even after 20 years..
Being in IT, you may think you can just automate. But, you need an edge to automate first. Your automation will be like a chainsaw sawing your legs off until you find an edge. It's not an edge in itself.
What usually happens is:
1) Put money in strong bull market
2) Go red
3) Go BLOODY red
4) Sell!!
5) Bull market resumes
6) Buy & hold
7) Bear market arrives
8) Holding
9) Selling at bottom of bear market
This is the natural cycle.
I'm in a very similar boat as you though younger than you. More recently, I've been working in analytics(data science, modeling, analytics) rather than IT. But in broad terms technology.
I've posted a similar threads here(search for "Need Advice"). Before I was in technology I was in the investment management quant space(long term + short term firms).
So I might have some perspective to potentially offer you given how similar our situations are.
When you are trading well, then trading is the best job in the work. You placed your trades and boom money comes in. It's like magic. One good days you'll make more than you make in a month in most jobs! But it's NOT how much you make but how much you lose that matters. Without proper risk management, you'll lose all your gains. From personal experience.
When you are not doing well(yes, there will be periods of low to negative performance), then it's possibly the worst job in the world(depending how you feel about it). You are giving up a stable high paying job with great benefits, bonuses, 401Ks, etc. in a growth industry(tech) for an opportunity to lose money. Doh!
If it's that easy to make money then everyone will be rich trading. Even Wall St "can't really trade." They make their money from being the middle men and fees. Read about all the hotshot ex-Wall Streeters who gave up their cushy Wall St jobs as middlemen and open up hedge funds. Most of them failed miserably. A very few succeed.
There are several paths.
Path #1:
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You can work on Wall St and learn about the industry with low to no risk. Get a job at a hedge fund, i-banks, etc. At the beginning of my career, I worked a several investment management firms and hedge funds before switching to tech. There's literal no stress and risk. It's OPM. They collect a percentage of billions AUM. As long as they don't trail the index too much, they could care less. It's intellectually interesting work too.
For hedge funds, on the other hand, there is more stress since it's performance based. My ex-boss and founder of the hf previously worked at a Bulge Bracket i-bank. Then he started his own hf. I think he did OK some years. But toward the end of the fund, he just sold the technology(fast engine) that his tech team developed and cashed out. That's how hard the game is. The big players like Rentech, DE Shaw, Two Sigmas, etc. have multiple billions under mgmt. And they have dozens of good edges and continue to research new ones by hiring the best quant minds to do research.
I'm not saying you need to do that to be successful. But it seems like it's not as easy as people think.
But it's NOT impossible.
Path #2:
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Continue your tech job and trade on the side. Trade in the mornings if you are in PST(like me) before work. Or develop trading systems that will trade for you while you work. I need to start develop that. This is the path I have arrived at as the best path for me going forward. I've starting a small analytics consulting thing. It pays the bills. Hopefully one day it will scale. In the meantime, I learn trading on the side despite the chorus of people on here saying the only way forward is full-time.
You are 46 older than me and most guys/girls on here. Think of your life situation and the road ahead and decide what's best.
good luck!
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Being smart, and having an advanced degree and paycheck and history and enjoying complex things is all fine and dandy, to some extent, with trading...but that can also...and most likely...be a double-edged sword for you as well.
Those type of people are too cautious and risk-averse, who lack independent and subjective adventurer trader spirit.
To make a living as a trader, for the retail individual trader,...you need to truly embrace risks. Not shy away from it.
Because with risks...comes the potentially lingering Rewards. -- But you need the skill and wisdom and maturity and spirit within you...to fully execute and extract it all.
Most people here seem to be happy with making ....15% a year. You can't make a living generating 15% a year on your relatively small retail trader account. You need to be much more aggressive and bolder in your trading approach and goals and tactics and strategy and skill.
If you're a big time hedge fund manager...you can make an excellent living...even if you have shitty trading skills. That 2% management fee on hundreds of millions is like lottery windfall for you every year. If you're good and/or lucky and happen to generate a profit...you're set for life, multiple lifetimes with that performance fee.
If you're able to predict and/or manage the future...you can make an absolutely gorgeous living trading
, 
There are just way too many variables right now...to determine Your personal success/failure in the market.
I could show you the road to the Holy Grail...but if you're hot tempered...and picked a fight with someone on the bus...and got stabbed, you're toast. or saw a hot girl, and escaped with her.
Everyone wants to be a trader -- it's the new American Idol.
If you think you can manage to climb to the top of the masses...try to predict and manage and trade the broad market SPX/SPY/DOW/ES chart on a Daily basis. If you can do this...the Keys to the world are virtually yours,
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