Personal Advice

It sounds like you're at a good stage of your life to give it a shot. If you don't have $30,000 ready to go, joining a prop firm would probably make sense. You can contribute $5,000 or so and get access to all the buying power you need for when you're just starting out and be able to take advantage of their risk management systems.

Becoming consistently profitable is very difficult, but once you've reached that stage 1% a week is very reasonable under most market conditions.
 
A lot of this comes down to specifics. What's your net worth? What % return can you make off of your risk capital?

And more importantly, if you blow out, can you go back into your old career without any repercussions? If you can always go back to being a compliance officer after making a go of it at trading, then it's pretty low risk. But if you're giving up a career to do it, then you'd better be pretty good at trading because there's no going back.
 
Funny you are in Tampa, Fl. So am I.

In 2003 I did exactly what you hope to do (was 29 years old at the time). I left a well paying software job to become a trader. Had about 38 k saved plus 20 k my parents gave me to trade (SHOCK!).

I tried a variety of methods but eventually wrote an application in VB6 that could automatically place trades through IB and had about 5 EOD systems running. Shit went gang busters for about 4 months. I was trading my account which had my parents 20k and about 20k of my money as well as a 10k IRA my mom had. I eventually realized that I would soon blow up as my systems were extremely correlated and I was highly leveraged.

I pulled the plug on the systems (late 2005), gave my parents back 22k and my Mom's IRA made about 20%. Overall my account made money but at a great opportunity cost as I was spending my savings to pay bills.

18 months after I left my software gig, I found another software gig and I am still there today. I don't regret the experience but if I were to do it again, I would establish myself as a consistently profitable trader before I took the plunge.

If you have a profitable track record and you have the cash, go for it!!!

good luck!!!
fan27
 
Alot of the advice is very old school and some of it applies to when I started in the late 80s. I hardly trade at all anymore. The world is very very different now. The exchanges motives are more questionable today -- that wasn't the case say 10 years ago. I saw some Marty scwartz post about reading his book. Comon that's like going back to the Ford Model T and studying the internal combustible engine.

The biggest factor working against you I believe is HFT -- those programs do things that are unimaginable. When they get hold of a stock or future look out, Those programs strike out of nowhere and push and push and push in one direction with no let up. If you are using stops -- boom your out. They are embedded into the exchanges now into our crony capitalist system. Especially the shorter you go. The longer it doesn't really matter and that's where I am now-a-days.

that's why the SMB trading is fighting an uphill battle I believe. I think they are well intentioned but gaps, TA, news, is just rolling the dice really. HFT is this huge unknown, a totally arbitrary force that just strikes for no good reason out of nowhere. You want to fight against that -- we'll then quit your job and start trading.

My advice is forget it -- get a job with the insiders (crooks) like the hedge funds, GS, an exchange.....the solo trader for someone your age is a waste of time. Don't throw away those years.
 
Thanks for all the feedback and good advice from those who took the time to give me an honest opinion. The question never was "should I do this." I will be a trader at some point, either succeeding or failing on my own merits.

After talking it over with my wife, I'm going to finish out the year at my job (saving more money, practicing, and collecting my end of year bonus) and then go for it at the beginning of next year. I want to make sure I have everything set up before then so the next six months should keep me busy.

Some of you have been kind enough to PM me with opportunities and advice. I'm going to evaluate my options and find the place that gives me the best chance to succeed.
 
Quote from londonkid:

geez, some people are so negative.

find a local prop firm, deposit $5k they will give you 20:1 BP, no overnights. pay a max of $3.50 per 1000 - 90% to 100% split. If you want to scalp rebate strategy (looking for 0.5c to 3c per trade) dont pay more than 30c per 1000 75% to 85% split. try and work alongside profitable traders, this is the key. You will know within 6 months if you are cut out for it.

You are only 26 go for it.

where are you based in the US?
More...

I know really.

The guy just wants to make $50k a year.

A trader could make that in one day. Fail that, the trader could make that in one month. Fail that, the trader could make that in a few months. Fail that, the trader could make that in one year.

There is no nobility in being a compliance officer.
 
Quote from thetradergator:

Thanks. This is really helpful. I'm really just not that familiar with rebate scalping. From what I know, it's all about being paid to add liquidity, placing orders all day to collect. While this may be profitable, it doesn't really sound like what I want to do. If it helps me get better in the long run though, then I will definitely keep an open mind.

And I agree that this is something that would require all my time to be successful which is why I'd have to quit my job. Trading part time against professionals is not worth it.
More...

You gotta trade size to make big money.

A good rebate trader tried to mentor me but I quit after a week after I saw how much he made ytd.

He made peanuts compared to a Russian trader who mentored me at Worldco.
 
Quote from thetradergator:

I've read many of the threads on here for the past few weeks and thought I'd ask for some advice. I'm a 26 year old Equity Research Compliance Officer, and fed up with working the 9-5 (more like 730-530) corporate job. I have thought about giving it up and trading full time for the past year now. I even had 2-3 phone conversations with a guy from SMB last year about trading with them, but it just wasn't the right time. Now, I have gotten married and have a little more capital under my belt. My wife makes decent money ($75k-$80k), and I have about $20k in capital to put up to trade. I also have the Series 7 (and 9/10, 24, 63, 87 and CMT levels I and II) and have been practicing day trading on a simulator that uses real past data feeds (I know it's not the same, but that's the best option I have at the moment). Unfortunately, with working for a full service FINRA broker/dealer and being in equity research Compliance, my personal trading is very restricted. Commissions are $34.95 each way and I have to hold most stocks for 30+ days. This has not allowed me to practice my preferred intraday strategy with real money, but I do well with what I can do. I am strictly a technical trader and have done a lot of self-study over the past 4 years. I do not consider myself a novice.

My question for you all is this, with my background and situation, do you think I should put up my $20k with some prop firm that will leverage me up 5-10 times or wait until I can raise some more capital and just do retail at Interactive Brokers with PTD 4:1 leverage? I am not really interested in these training firms that charge thousands for a course and then may give you firm capital to trade with. I just want to trade. If I do it for a year or two with my wife helping to support us and lose it all, well then I am confident I can go back into Compliance with my licenses still not expired and resume my depressing, boring career. I am very entrepreneurial and want to control my life, not have it controlled by some company.

Is it crazy to think a person can make $40-50k a year starting out with $20k capital? With $100k in BP, making 1% a week doesn't seem unreasonable, but I know 40%-50% annual returns take some serious skill. Any help you can give me to help make this a reality will be greatly appreciated.
More...
yes, the 9 to 5 isn't bad, but when they start pulling that 7:30 to 5:30 crap on you, it's time to quit the corporate job and start trading
 
You must log in or register to reply here.
Back
Top