Making a living out of trading for someone who has had a corporate job may not be easy even if you are making money almost every day right now. So, keep searching for a job, keep looking at as a hobby. And yes, you need to get out of that long term loss. Just write it off. Pain for once should give peace for the rest of the time.
Need Advice
- Thread starter trader99
- Start date
I'm doing my taxes now. TurboTax does the prior year comparisons. I had some good years at steady high paying corporate jobs.
2018 is scary and pivotal. I'm doing my analytics consulting biz now. It's small(one client) but hopefully will grow over time(??). My side trading has been net negative except for cryto trading which has been net nicely positive.
I've created an Excel spreadsheet with side-by-side monthly comparison as to monthly gross take home from my old high paying tech job vs my now analytics consulting biz + trading. I totally understand the first year can be rough.
But surprisingly, for January I was ahead as compared to my corporate job.
February slightly behind.
March TBD Behind unless something picks up, but the month is only half done.
This is just counting gross income not benefits, 401K, bonuses, etc. But since I'm running a consulting biz and potentially a trading biz, I understand there are tax benefits that might end up saving me a bundle at yearend even if I make less than my old corporate job(??).
I don't expect my trading to be wildly positive anytime soon. But any incremental improvements are welcomed.
Maybe I should expend more energy expanding my consulting biz. If I pick up another analytics consulting client, then I'll be matching or even possibly exceed my old corporate job. Then I don't have to worry about every looking for a job again. If I have 3 clients then I'm sure I'll definitely exceed my old earnings.
Then spend my time building automated trading systems to generate small but steady gains while I'm at work.. hehe. That's the dream...
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Two things to think about...# 1. Braces Dental and eye (besides medical) comes into play for the whole package of benefits.
Have you considered funding an IRA or SEP IRA this year? I funded IRAs and Keoghs over the years. The Keogh has been pretty much replaced by the SEP IRA now. During the years I would convert the Keogh to a IRA. Both my wife and I would convert our IRAs to Roth IRAs...About $20,000. each year. I would always use my CPA to decide when and how much to convert. With growth, we have big bucks we can take anytime we want. We are limited to what options (put/call) we can write in a IRA/Roth. But big savings when we need the money or want to pass the money to our kids (tax free) when we die. Brian PS Our kids do not have to take the distribution of our Roth IRAs. They can keep the accounts and have them grow tax free for them too...Just saying.
Have you considered funding an IRA or SEP IRA this year? I funded IRAs and Keoghs over the years. The Keogh has been pretty much replaced by the SEP IRA now. During the years I would convert the Keogh to a IRA. Both my wife and I would convert our IRAs to Roth IRAs...About $20,000. each year. I would always use my CPA to decide when and how much to convert. With growth, we have big bucks we can take anytime we want. We are limited to what options (put/call) we can write in a IRA/Roth. But big savings when we need the money or want to pass the money to our kids (tax free) when we die. Brian PS Our kids do not have to take the distribution of our Roth IRAs. They can keep the accounts and have them grow tax free for them too...Just saying.
My daughter is too young to be thinking about braces yet. I bought insurance through the marketplace. So far, it has been reasonably priced though I can imagine it going up over time as I want more coverage and her needs changes.
Someone told me about SEP IRA to reduce AGI. You can put up to $55K into SEP IRA. Assuming my analytics consulting + trading biz even make enough to put that in after expenses and salary. But that's a nice carrot since it not only reduces AGI(adjusted gross income) but also a huge retirement tax savings much more than being an employee(which I believe maxes out at $18K?)
I attended a Greentradertax webinar the other day. They said something about forming an S-Corp to deduct health insurance premiums and other expenses. Couldn't a normal LLC do that? Also, the analytics consulting biz is NOT a trading biz. So that means I have to form 2 different entities? An S-Corp for trading and an LLC for consulting?
Right now, I'm worry about top-line revenues before even thinking about optimizing taxes! If things don't go in the right direction then come September, I'll be applying back to 9-5 jobs.
My biggest concern now is optimizng top line income! Tax consideration comes later. And I believe there's still time for that. If I'm not mistaken you can do the SEP IRA or Solo 401K toward the end of year(November). No worries now. Let's make some money first.. LOL
You may need an attorney to figure those out. I thought doctor/dentist were S-Corp...But I may be wrong. Just wondering if a trading broker will allow an S-Corp or LLC to open accounts?? If I was Schwab or Fidelity I would not touch one of those in the option field...Just me. You may want to talk to your broker about that one. They may require a large reserve (in a money market account or saving account), that you could not touch if you are trading options. Don't know?? Maybe a bond?? But no broker would want an S-Corp/LLC to be trading options unless they know, not only they could liquidate the account/s, but also go after the person. Insurance companies would think you are crazy to try and get a bond to be one person trading options. Just talking out loud. You could (if you haven't already) move your 401K from your old company, into an IRA...And do trading with that money. But, you are limited by government rules on your trading options. But you would be gambling your retirement money...Not very wise.
Interesting you brought up all these complications. I use IB and I don't think it's any more complicated to open an account in IB as LLC(I don't know about S-Corp). It's just an entity.
Anyhow, I'm not ready to do LLC/S-Corp until I make significant profits in trading. This is not the case yet... haha
A long way to go. For now, I'm focusing on my analytics consulting biz.
I was doing my remote analytics consulting work and trading a little bit.
I "knew" it was going to be a down day and yet still lost money shorting! Ridiculous! I short then a massive SPIKE UP happens! Of course eventually it would go down had I just held.
Ironically, I ended up making money on the longs! Wait for it to be extreme lows(local minima) go long and let it rip up. get out. Strange.
Very frustrating. But at least I was not destroyed like Feb 5th of this year. Improving I guess?...
Do you guys find it easier to make money going long than short even on down days?
I feel a little out of touch since I've been concentrating on my analytics consulting biz and I haven't trade in a while.
This morning I logged into IB and it feels really fast though when I was at my peak immersion in daytrading futures this would not be a fast day. Rusty I guess..
P.S. Ironically, just made money shorting in the afterhours which traditionally is harder for me with wider spreads and lower liquidity.
I "knew" it was going to be a down day and yet still lost money shorting! Ridiculous! I short then a massive SPIKE UP happens! Of course eventually it would go down had I just held.
Ironically, I ended up making money on the longs! Wait for it to be extreme lows(local minima) go long and let it rip up. get out. Strange.
Very frustrating. But at least I was not destroyed like Feb 5th of this year. Improving I guess?...
Do you guys find it easier to make money going long than short even on down days?
I feel a little out of touch since I've been concentrating on my analytics consulting biz and I haven't trade in a while.
This morning I logged into IB and it feels really fast though when I was at my peak immersion in daytrading futures this would not be a fast day. Rusty I guess..
P.S. Ironically, just made money shorting in the afterhours which traditionally is harder for me with wider spreads and lower liquidity.
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Just a quick update. I've been working on my analytics consulting biz. Hopefully things will continue to be steady there. I like the stability of getting biweekly paychecks again so far.So one less thing to be concerned.
On my days not at client onsite, I've started to daytrading futures again. Looking back at my record on down days:
2/5/18: Lost hundreds of points. In one account I was down 513 YM points alone! Not including huge losses on NQ points too. Minus commissions too! Ouch!
3/22/18: Another huge down day: In that same account, I'm down 200 YM points! Actually I was up for the day then I kept mistiming the bottom. But I was also in stupid repetitive buying the dip when it's not the buy the dip day. Luckily I had automated stop losses attached.
Today, 3/27/18: Another huge down day: In that same account, I'm UP 30 YM points! At one point I was up 100+ YM points but then I started buying the dip too early. What saved me was my automatic stop loss attached to my buy hot key! Thanks @Xela! That's the only thing that really saved me when I was trying to buy the dip.
The frustrating thing is that I was actually SHORT in the morning. But earlier than my signal would have told me to. It went a little more against me but I held then covered too SOON! Had I held it would have been a several 400-500 points move! In one of my dip buying trades, I made 70 YM points in a few minutes.
So, it seems like I'm no longer deer stuck in a headlights when it comes to huge down days. Also, I'm able to profit from the spike up instead of getting hurt. My next big area to improve is to know when to short and hold! I shorted each of those 3 big down days, but I either got
1) Stop out before the big move. This means I need to refine my short entry better
2) Exited too soon! This means I left a lot of money on the table. Exited too soon on a good short trade
3) Shorted toward the local minima then got hurt on the spike up from dip buyers! I think I've sorta fixed that problem by BEING the DIP BUY at local minima and profited from those spike up moves! I realized I have to be very patient if I want to be a dip buyer on huge down days. Gotta be patient and wait just for the right moment. Getting in early will get stopped out or worse..
Yesterday I missed out on a monster rally! I was doing analytics consulting work. So there will be good trading days I will miss out. But that's the price I'm willing to accept for the stabilizing effect of a non-trading biz/work.
Also I don't want my account to get whittled down while I'm fixing my mistakes. Sometimes a break is a good thing in terms of consolidating learning and trading patterns. The brain needs to rest and internalize these habits.
Stay tuned. I think 2018 will be a year of volatility. So there will many good trading days ahead for us daytraders! Hopefully the next time I will be able to report back I'm able to net several hundred points long and short...
Happy trading!
On my days not at client onsite, I've started to daytrading futures again. Looking back at my record on down days:
2/5/18: Lost hundreds of points. In one account I was down 513 YM points alone! Not including huge losses on NQ points too. Minus commissions too! Ouch!
3/22/18: Another huge down day: In that same account, I'm down 200 YM points! Actually I was up for the day then I kept mistiming the bottom. But I was also in stupid repetitive buying the dip when it's not the buy the dip day. Luckily I had automated stop losses attached.
Today, 3/27/18: Another huge down day: In that same account, I'm UP 30 YM points! At one point I was up 100+ YM points but then I started buying the dip too early. What saved me was my automatic stop loss attached to my buy hot key! Thanks @Xela! That's the only thing that really saved me when I was trying to buy the dip.
The frustrating thing is that I was actually SHORT in the morning. But earlier than my signal would have told me to. It went a little more against me but I held then covered too SOON! Had I held it would have been a several 400-500 points move! In one of my dip buying trades, I made 70 YM points in a few minutes.
So, it seems like I'm no longer deer stuck in a headlights when it comes to huge down days. Also, I'm able to profit from the spike up instead of getting hurt. My next big area to improve is to know when to short and hold! I shorted each of those 3 big down days, but I either got
1) Stop out before the big move. This means I need to refine my short entry better
2) Exited too soon! This means I left a lot of money on the table. Exited too soon on a good short trade
3) Shorted toward the local minima then got hurt on the spike up from dip buyers! I think I've sorta fixed that problem by BEING the DIP BUY at local minima and profited from those spike up moves! I realized I have to be very patient if I want to be a dip buyer on huge down days. Gotta be patient and wait just for the right moment. Getting in early will get stopped out or worse..
Yesterday I missed out on a monster rally! I was doing analytics consulting work. So there will be good trading days I will miss out. But that's the price I'm willing to accept for the stabilizing effect of a non-trading biz/work.
Also I don't want my account to get whittled down while I'm fixing my mistakes. Sometimes a break is a good thing in terms of consolidating learning and trading patterns. The brain needs to rest and internalize these habits.
Stay tuned. I think 2018 will be a year of volatility. So there will many good trading days ahead for us daytraders! Hopefully the next time I will be able to report back I'm able to net several hundred points long and short...
Happy trading!
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