Need Advice on career change into trading

[coolweb]

Seth,
You are correct, imagine that with a few $200-300k investment on margin which is easily attainable.

You'd be up 2-3 million.

To think, all you started out was risking 30-50 cents.

 

[risktaker]

Welcome to the line of schmucks who were lucky enough in their last/current career to do well and now think they deserve or can somehow transform that 'success' into big dough on wall st. Hah!
That line of people waiting to join the losers' club is huge. It snakes its way to the end of the block, around the corner and it's probably a mile long.
Wake up dude! There are VERY, VERY few who can make it trading and quite a few here who tell you it's easy or possible have some self-interest to keep that myth going for as long as possible to sucker in 'winners' like you who'll drop some dough in their pot, no doubt.

Quote from venturerider2:

It's really not about aiming too high. It's about aiming at a level that would exceed what I have already accomplished from a compensation perspective. I'm OK with taking a pay cut for a year or two (i.e. making nothing). But I would not be OK with not reaching my full earning potential.

If several of you are saying that nobody earns 7 figures, and if that seems to be the overriding view, then I would most likely not enter the field.

As I said, I know several people who are in this earnings category but they have come from more traditional Wall Street career paths. If the prop trading firms are not producing any traders in this earnings category, that would be interesting to hear.

Thanks.

 

[Bitstream]

Quote from SethArb:

here is another long term winner that most of us
short term traders prob did not have much of long term

http://finance.yahoo.com/q/bc?s=VLO&t=5y

Yes?
What abot this:

http://finance.yahoo.com/q/bc?s=SHLD&t=2y

 

[profit_loss]

Quote from venturerider2:

I am currently exploring the possibilities of leaving my current career and “trading for a living”. I am looking for a change in my life and I have always had a passion for the markets and the idea of proprietary trading.

I have been trading “here and there” for the last three years (mostly equities and options/spreads). I have taken several courses and read more books than I can remember. I use Metastock but I never really get a chance to dig in like I’d want to because I have a full time job that requires a significant amount of time and responsibility. So I have not really developed the plan, system, and edge I need in order to start making serious money through trading.

Here is my background in a nutshell so you understand where I am coming from:

A. I am a successful entrepreneur and CEO of a mid-size professional services firm in New York City and my compensation (which is significant by most people’s standards) is not something that I can walk away form easily.

B. My goal in trading would be to “eventually” earn in the healthy 7 figures. I realize this can take time (years) and I also realize that it may not happen at all. But let’s face it, while most people never reach these goals, there are a few that do - and that’s what motivates me.

C. I am in my mid 40’s, married, with 4 teenage/elementary school age children. (nuff said there?)

D. My formal education is electrical engineering. My jobs have included 3 years as an electronics engineer, 2 years as a technical sales rep, 5 years as a stockbroker (major brokerage firms, training programs, diversified product experience), 16 years of executive recruiting (specializing in financial services). I started and built the company I have today which is considered a leader in its field.

So here are my questions:

1. How many months/years of living expenses does one typically need before they are consistently profitable and able to sustain themselves by only trading for a living? I know it varies but let’s work with averages.

2. If I were to “walk away” from my current career (sell my stake in my firm) and take on a job in trading, what kind of firm might be interested in me, if any? (As a recruiter – I am well aware of the fact that major investment banks and hedge funds will not hire people at my age). I see many people on this forum taking pot shots at prop trading firms. I’m sure many are well-deserved but my feeling is that they are in business to make money – just like I am and just like Goldman Sachs is. The real question is - are there individuals at some of these firms who have come in with no formal trading experience and are now making millions?

3. Am I better off just trading on my own? part-time (while I keep my current well-paid job), until I feel comfortable with what I can do? This just seems like a daunting task, given the competitive nature of the markets. My feeling is that trading part-time is like fighting with one hand tied behind your back. Am I wrong?

4. I know several people who are traders and who are very wealthy. All of these people either started on the floor of an exchange when they were younger, or have come up through the ranks of a trading career at major Wall Street firms. I don’t know anyone who just started trading from home, on his or her own, and became wealthy. Do you? I don’t know any middle age guys who quit their jobs and became wealthy traders. Do you? I’d like to hear that other people have done it and where/how. I’d like to hear that this is possible!

To be candid, I am less interested in a position in which a black box or model tells me when to push a buy or sell button and, while I do have very quick reflexes, I am not interested in working in an environment where split second actions and being a video game champion are the keys to being a successful trader.

I would prefer working with people who value analytical skills, strategic thinking, discipline, decisiveness, and business (P/L) experience.

Ok – so I don’t expect you to answer all the questions - there’s a lot there. Any tidbits of advice from your experience would be helpful.

Thanks,
Venturerider2

Number 3 is your best option even through it is part time but doing due diligence is full time. It will take you a minimum of 4 to 5 years creating a trading system that suits your gains....one thing to expect is losses whether they are heavy or light, but the most important thing is to learn to accept losses. It's a long road travelled but only you can determine your success.

Also your background will have no bearing if you're a successful trader or not, discipline is key and only you are in control of that.

 

[prt_systems]

Quote from venturerider2:

.....
A. I am a successful entrepreneur and CEO of a mid-size professional services firm in New York City and my compensation (which is significant by most people’s standards) is not something that I can walk away form easily.

.....
I would prefer working with people who value analytical skills, strategic thinking, discipline, decisiveness, and business (P/L) experience.

.....
Thanks,
Venturerider2

Well, if you really do have friends that make 7 figures per year then you need to be talking to them and talking directly to people that are in the business.

A successful entrepreneur would assign someone to do the research for them and tap into a network of reliable business associates to get this type of information ... and they would discern valid and realiable channels of information.

 

[jem]

best answer by far.

 

[maxross]

my situation is very similiar to venturerider. i am in the process of selling my business and will have a seven figure sum. i plan on putting that money into Muni's and using the interest to pay most of my monthly bills. That way I can take my time and really become a profitable trader without as much stress. By the way, I am 38 and have 4 young kids also. Venture, maybe you should try something like that as well.

 

[risktaker]

Like I said buddy, join the mile-long club.

Quote from maxross:

my situation is very similiar to venturerider. i am in the process of selling my business and will have a seven figure sum. i plan on putting that money into Muni's and using the interest to pay most of my monthly bills. That way I can take my time and really become a profitable trader without as much stress. By the way, I am 38 and have 4 young kids also. Venture, maybe you should try something like that as well.

 

[maxross]

My situation is a little different though. i was a broker for 11 years and have been trading successfully part time for 4-5 years. just sick of dealing with employees and business headaches and would much rather sit in my home (which i own with no mortgage, so also should take off some pressure) office and trade full time. Trust me every business has risks and rewards, trading is just one of them and if you can take care of the losses you will be able to do fine.. in my opinion.

 

[jason_l]

I think people get hung up when they hear "7 figures". It's purely an ROI equation you want 1MM a yr? become a 20% ROI trader and trade a 5MM account. It seems people might be losing sightof the fact that building up to a 1MM/yr trader starting with 25-50k is not nearly the same as starting off with a substantially larger account - if your end goal is a set $ annual income.
I assume a "mid sized" services firm in NYC would be equate to quite a decent living and nice pay out when sold, considering what a TINY firm here in the midwest can do with just a small handfull of billable consultants. Assuming you can come up with a decent "bank roll", I'd venture to say the quickest way for you might be to utilize your contacts. If you can become consistantly profitable, put up your stake, lean on your friends and start a small fund. just a thought...