No idea how to begin

J

JAKE123

I've been trying to learn how to day trade part time while working a lame office job. After treading water for 2 yrs, I'm finally making progress. My capital has risen significantly in the last 4 weeks (I hope I'm on the upswing of the learning curb...for good). So now, I see a point where perhaps I can day trade for a living (and ditch the office). And be truly independently.

BUT, I don't know what steps I should begin to take...

Do I incorporate?
Do I hire a CPA?
What about health insurance (I'm a single dad)?
How do I establish credit? (cuz I will initially look like I've lost my job and am unemployed)

I don't even know if these are the right questions to ask.
(Please be gentle, this is my first post)
 
Quote from JAKE123:

I've been trying to learn how to day trade part time while working a lame office job. After treading water for 2 yrs, I'm finally making progress. My capital has risen significantly in the last 4 weeks (I hope I'm on the upswing of the learning curb...for good). So now, I see a point where perhaps I can day trade for a living (and ditch the office). And be truly independently.

BUT, I don't know what steps I should begin to take...

Do I incorporate?
Do I hire a CPA?
What about health insurance (I'm a single dad)?
How do I establish credit? (cuz I will initially look like I've lost my job and am unemployed)

I don't even know if these are the right questions to ask.
(Please be gentle, this is my first post)
More...

Do I incorporate?

depends of what,how often you planning to trade. select M2M or not. there is a lot of variables.

Do I hire a CPA?

depends. if you can do your taxes(many people here do prepare by themselves)-then-why do you need a CPA? you don't have to hire him anyway. cause they typically charge by hours.
if you incorporate-then you probably will need one.

What about health insurance (I'm a single dad)?
what about it?

How do I establish credit? (cuz I will initially look like I've lost my job and am unemployed)

depends..what for? i never worked anywhere and i have perfect credit score and tons of credit cards(but i pay them in full every month). mortgage? eeehh..that would be a different story. but again-you might not get super rock bottom rate,but there is will be a plenty of offers 0.25% higher. and as long as you can demonstrate that you consistently making money(by paying your taxes)-they don't care
 
Quote from JAKE123:

I've been trying to learn how to day trade part time while working a lame office job. After treading water for 2 yrs, I'm finally making progress. My capital has risen significantly in the last 4 weeks (I hope I'm on the upswing of the learning curb...for good). So now, I see a point where perhaps I can day trade for a living (and ditch the office). And be truly independently.

BUT, I don't know what steps I should begin to take...

Do I incorporate?
Do I hire a CPA?
What about health insurance (I'm a single dad)?
How do I establish credit? (cuz I will initially look like I've lost my job and am unemployed)

I don't even know if these are the right questions to ask.
(Please be gentle, this is my first post)
More...



u should be working in the house for 5-10 years. within 5-10 years successful making 6 figures, u should have created network full of successful traders and financial (brokers) salesmen/women, and know how the business works.


20qfceg.jpg








starting as a small trader trading from home, u will lose. u don't have network (succesful traders), u don't have connection or u dont have anything but ask question in the forums. Successful traders no need to ask questions in any forums becase they are CONNECTED!







More than 90% of small traders lose! They just lose!



http://www.bloomberg.com/news/2012-...-seen-profiting-at-small-firm-expense-1-.html


2sanifm.jpg
 
Quote from JAKE123:

I've been trying to learn how to day trade part time while working a lame office job. After treading water for 2 yrs, I'm finally making progress. My capital has risen significantly in the last 4 weeks (I hope I'm on the upswing of the learning curb...for good). So now, I see a point where perhaps I can day trade for a living (and ditch the office). And be truly independently.

BUT, I don't know what steps I should begin to take...

Do I incorporate?
Do I hire a CPA?
What about health insurance (I'm a single dad)?
How do I establish credit? (cuz I will initially look like I've lost my job and am unemployed)

I don't even know if these are the right questions to ask.
(Please be gentle, this is my first post)
More...

First, don't quit your day job for a long while yet. You really don't want to be in a situation where you have to profit to survive.

Second, the last 4 weeks have been very easy for anyone doing basic stock trading or trend trading. This is not a good indication of long term success. I know many at home traders who are going around right now thinking they are the best traders on the planet. Not really hard to make money in a no risk bull market.

You need at least 3-5 years of success, under varying market conditions before you can even think about trading for a living. So far your entire trading history has been during one of the strongest bull runs in history. How do you really think you'll do when we get to the next crash? What is your plan for that?

You don't need to be incorporated or anything at this point. My personal opinion is that anyone not smart enough to do their own trading taxes, isn't smart enough to trade for a living. Paying a CPA starts to make sense when you become a professional manager and don't have the time to be worrying about taxes.
 
Don't begin, unless you are well capitalized because you will need a good mentor, which is not cheap, and ample capital to trade without other sources of income to handle expenses.

Of course, you will ignore me but that's a grave mistake.
 
What would be the benefit of incorporating? Wouldn't you have to pay yourself which means you would be paying fica and medicare and ssc and all that crap? Not to mention making tax time way core complicated and expensive. Are you trading futures or stocks? Futures will make you life a lot easier at tax time also. Health Insurance is no big deal for myself and two kids I only pay 180/month for a plan with a 8k deductible but it covers all the wellness crap and xrays and blood work. You just can't go to the hospital or you'll pretty much be paying the 8k.

Not sure what your situation is like but if you are trading and worrying about having to get paid any given week you shouldn't quit your job.

Are your kids in school all day or are they still litttle?
 
None of those problems are really problems if you're making money trading and have a sustainable edge. Your tax returns will prove your income rather than a W-2. You can buy individual health insurance.

The CPA and choice of sole proprietor vs. an entity is covered here already. The short version for modest income levels, 0-200k was that it wasn't worth the trouble to incorporate.

I'll answer the question you didn't ask. Should I quit my stable job to do this? For most people, no. But if you have an edge and the capital base to support it, then maybe.
 
Quote from JAKE123:

I've been trying to learn how to day trade part time while working a lame office job. After treading water for 2 yrs, I'm finally making progress. My capital has risen significantly in the last 4 weeks (I hope I'm on the upswing of the learning curb...for good). So now, I see a point where perhaps I can day trade for a living (and ditch the office). And be truly independently.
More...

Without getting into any specifics of your trading methodologies, do you know the average win rate and risk:reward ratio for each of the setups you trade?

What is lame about your office job?
 
when I was tradimg for a living, there was no plan. If the kids needed shoes, it came out of the trading account. Tuition for private school? Didn't matter if it was an up year or down year, it came out of the trading account

Now that I no longer need to trade for a living, I came up with a very workable plan

I don't know what a minimum account is for a full time trader, but when I started it was 25k on the CBOT and about 32K on the merc if you wanted to trade meat

I suppose now it is way above 100k

but let's just say it is 100k (which sounds a little don't quit your day job to me)

but what I do is pay myself 50% of the account each month over and above the minimum balance.

so in 2012, I was making good money, and 50% over and above the starting balance got deducted each month. Most of that goes to taxes.

But in 2013, I am losing my ass, yet, still I get a check each month,and none of it goes to taxes

credit is no problem, buying a house is

unless your expenses are high, it is almost always better to file as unemployed, or retired

if buying a house is important, I would not quit the day job.

you can file a sched c as a pro trader. But all the sched c shows is your expenses. All your income from trading will be on sched D.

otherwise, then yes, you need to form an entity, something I know nothing about other than you get hit with SE taxes

when it's not going good, all the money comes from saving money on taxes

I agree with the other guy, if you can't figure out the tax code, you probably can't figure out the market
 
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