I have developed a day trading strategy which has a good positive expectation. My objective is to re-enter the full time independent trader space, but my trading capital is not sufficient to make a living. In order to build a live track record, and create a basis to raise third party funding,I need to abandon current employment - this is not viable due to family/living expenses obligations- any suggestions to move forward?
Making full time trading viable
- Thread starter Truth Searcher
- Start date
Automate your strategy and continue working your day job. That would likely better position you to raise funding in addition to being able to support your family. Perhaps some others could chime in, but I doubt those looking to allocate capital are looking for point and click day traders.
Thanks for your reply. This particular strategy cannot be automated, and requires screen watching 7 hours a day 5 days a week. However, the daily net profit after costs and slippage is around 80 usd if traded with 2 futures contracts. (With 10 contracts would make a living). It is also very scalable. The tragedy is that it can’t be deployed with any real scale due to limited resources. The challenge is to connect with someone who would buy into the process created in the absence of live track record- a catch 22..any further thoughts?
$40 per day per contract does not sound that enticing for a strategy that requires a human sitting in front of a screen for seven hours a day. Basically, the cost to operate the strategy is high and the return is low.
We get threads like this frequently. Some commonalities:
1. Your strategy probably isn't as good as you think it is. It will decay and/or the risk profile isn't actually that attractive. That the only datapoint you have given us is avg $ profits / contract / day shows you are unfamiliar what information is actually relevant to a situation like this.
2. On the chance you actually do have the work ethic/intelligence to design a competitive trading system; seriously just go apply that unusual effort elsewhere for a year or two and grind out some working capital. The market will still be here. Bleeding your time away trying to solve a catch 22 and spending excessive time on market study when you don't even have the capital to realize any significant $ returns shows you aren't managing your current resources very effectively.
But usually the people who start these threads aren't willing to do the above because it's more about a dream then locking in incremental progress. The only way you can possibly fast-track a trading career is through a personal relationship who has capital, a lot of pre-existing trust in you, and who you could demonstrate enough to inspire confidence in your method enough to fund it.
A successful transition to trading from this point depends on a lot of very slim chances. There's no reason to be swimming upstream so hard. And for individuals who keep clinging to this idea instead of actually traveling the path of least resistance.. their persistence ironically tends to prevent their end goal from ever being realized. Put the horse before the cart.
1. Your strategy probably isn't as good as you think it is. It will decay and/or the risk profile isn't actually that attractive. That the only datapoint you have given us is avg $ profits / contract / day shows you are unfamiliar what information is actually relevant to a situation like this.
2. On the chance you actually do have the work ethic/intelligence to design a competitive trading system; seriously just go apply that unusual effort elsewhere for a year or two and grind out some working capital. The market will still be here. Bleeding your time away trying to solve a catch 22 and spending excessive time on market study when you don't even have the capital to realize any significant $ returns shows you aren't managing your current resources very effectively.
But usually the people who start these threads aren't willing to do the above because it's more about a dream then locking in incremental progress. The only way you can possibly fast-track a trading career is through a personal relationship who has capital, a lot of pre-existing trust in you, and who you could demonstrate enough to inspire confidence in your method enough to fund it.
A successful transition to trading from this point depends on a lot of very slim chances. There's no reason to be swimming upstream so hard. And for individuals who keep clinging to this idea instead of actually traveling the path of least resistance.. their persistence ironically tends to prevent their end goal from ever being realized. Put the horse before the cart.
This is critical. If you really aren't in the game enough to go find a second or third job to fund your system you probably don't really believe in it. This is the "mean" advice people need. Unlike the startup world where some billionaire VC will give you 500,000 to try out your business - that doesn't happen here. Investors want track records, risk models, etc. None of which the average "good strategy" Joe can provide.
OP listen to this advice carefully. I'm in this process myself. I have gotten a part time job (same industry so money is alright) to fund my trading dreams so I can keep saving for retirement/life/etc and trade (it's the real only "have your cake and eat it too" an aspiring trader can hope for).
I'd like to add that most people view trading as an escape from the fear of not being able to provide for your family. On the surface it has the same allure as a pyramid scheme - make your own hours and spend time with your family. Unlike a pyramid scheme where you'll never make a cent, trading with enough dedication and hustle applied, can actually make that happen. It's the "dedication and hustle" part the average Joe can't grasp. This includes waking up to do odd jobs, work a second job, whatever it takes to get you there. The grit that builds alone will help you as a trader.
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How much of the capital - do you need ?
How much time, it would take, to raise up,the necessary capital - yourself ?
How long you're trading / practicing so far ?
* You might need to abandon your current employment, but don't abandon employment in general.
Can you work in the night shift/after noon shift ?
Is there really, absolutely , no way, to lower those expenses ?
It looks to me, overall,
like many, tiny, obstacles - in your way, problems - let's say, that create this , illusion, of unbreakable obstacle, which could be , torn apart, with few radical choices/decisions, like,
asking for another shift in the work
(yes, making the sacrifice) , then if > not > changing the job.
Your rational thinking, most likely, would say, that's the way to go, but when it comes to emotional level, it becomes difficult, e.g fear, uncertainty,comfort zone etc.
Sitting down,with your family , explaining, that expenses has to go down, in order for you to succeed , then everyone - would benefit.
(i wish that would happen, but to much about you, is unknown to us )
How much time, it would take, to raise up,the necessary capital - yourself ?
How long you're trading / practicing so far ?
* You might need to abandon your current employment, but don't abandon employment in general.
Can you work in the night shift/after noon shift ?
Is there really, absolutely , no way, to lower those expenses ?
It looks to me, overall,
like many, tiny, obstacles - in your way, problems - let's say, that create this , illusion, of unbreakable obstacle, which could be , torn apart, with few radical choices/decisions, like,
asking for another shift in the work
(yes, making the sacrifice) , then if > not > changing the job.
Your rational thinking, most likely, would say, that's the way to go, but when it comes to emotional level, it becomes difficult, e.g fear, uncertainty,comfort zone etc.
Sitting down,with your family , explaining, that expenses has to go down, in order for you to succeed , then everyone - would benefit.
(i wish that would happen, but to much about you, is unknown to us )
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I agree that the full time sitting in front of a PC is not labour efficient, but if the system is traded with a sufficient number of contracts the return is definitely worth it. Most office jobs involve sitting most of the time in front of a screen. If the expectancy does last over time and is traded at say 20 contracts the annual return could be of the order of 80 x 10 x 190 days = 152,000 usd.
Also, the futures contract in question is the British Pound which has a tick value of 6.25 usd v 12.5 usd. This might give some more perspective.