Preparing for a Life After Daytrading
- Thread starter Rahula
- Start date
I concur.
I walked away from the law profession to trade full-time. I was tired of the commute to a job I no longer liked and let's face it, lawyers put together deals for bigger fish so I was tired of being the smallest piece of the puzzle.
I am so much happier trading than I was in that job.
One CAVEAT is that I do not fully daytrade. As the name implies I do mainly options and my positons are week to week or mainly month to month so I do not have to be tied to the computer all day. So my situation might be a little freer than a true daytrader scalping who lives in front of the computer. My daytrades are mixed in and not in same volumes.
I dont expect to do this forever as most people burn out trading their own money after time. Once I build AUM then I can have the next step. The key is to always move forward so you are not desparate for each trade to make money. Desparation trading leads to major losses. Took me a few years to get to this point but all the hard work until now is worth it and I enjoy the even harder work I have to do now.
I walked away from the law profession to trade full-time. I was tired of the commute to a job I no longer liked and let's face it, lawyers put together deals for bigger fish so I was tired of being the smallest piece of the puzzle.
I am so much happier trading than I was in that job.
One CAVEAT is that I do not fully daytrade. As the name implies I do mainly options and my positons are week to week or mainly month to month so I do not have to be tied to the computer all day. So my situation might be a little freer than a true daytrader scalping who lives in front of the computer. My daytrades are mixed in and not in same volumes.
I dont expect to do this forever as most people burn out trading their own money after time. Once I build AUM then I can have the next step. The key is to always move forward so you are not desparate for each trade to make money. Desparation trading leads to major losses. Took me a few years to get to this point but all the hard work until now is worth it and I enjoy the even harder work I have to do now.
Were you successful as a daytrader? If so, why not try and automate what you were doing. Let the computer do the "dirty job" of sitting in front of the screen all day, watching for your set-ups to appear, and taking the action to place your orders? This way you could pursue your ideal real job (even if the trading accounts for 90% of your income), and not be called a day-trader.
Of course there are plenty of risks being in the corporate world such as:
- getting outsourced
- getting downsized
- dealing with age discrimination when you get older
- losing your job to automation
- inability to change jobs or find one, if you don't constantly keep your skills up to date with where the demand is
But I rather take all of the above risks for a steady paycheck especially since I'm planing for a family a few years down the line. I'll always be trying to improve my trading/investing skills as a hobby tough. I no longer want to get rick quick. I want to get rich slowly and steadily.
Besides I think the ideal way to go about trading is to either:
1 Trade at a hedge fund or a real IB prop desk.
2 Or swing trade as a hobby while you work at a steady job. If really successful, then use your track record to then trade OPM (you're own fund or at a hedge fund or a real prop desk).
I have no regrets because I've learned a lot that will serve me well going froward. But anyone who thinks daytrading isn't the riskiest way to trade ought to consider:
There are thousands of traders who work for hedge funds and IB prop desks. They make hundreds of thousands in salary plus another couple of hundreds of thousands (if not millions) in bonuses. So many of these guys are probably worth several million. And they know how to trade, they are expert traders. They can easily leave their jobs and trade their own money at a beach house swinging 100s of lots in futures, options, and stocks - and keep 100% of their money instead of getting a 10% bonus. But they never do that, why?
- There's a social stigma to day trading.
- There's no risk manager when you trade you're own funds. Hence there no one around that forcibly keeps risk tightly bounded - which prevents you from ever losing more than you can easily recover.
- There's no one to help you out when you're in a slump.
- There's no one around that will ensure that there is no deviation from the predefined strategy or system.
- There's no institutional resources at home as far as research, bloomberg terminals, programmers, etc.
- getting outsourced
- getting downsized
- dealing with age discrimination when you get older
- losing your job to automation
- inability to change jobs or find one, if you don't constantly keep your skills up to date with where the demand is
But I rather take all of the above risks for a steady paycheck especially since I'm planing for a family a few years down the line. I'll always be trying to improve my trading/investing skills as a hobby tough. I no longer want to get rick quick. I want to get rich slowly and steadily.
Besides I think the ideal way to go about trading is to either:
1 Trade at a hedge fund or a real IB prop desk.
2 Or swing trade as a hobby while you work at a steady job. If really successful, then use your track record to then trade OPM (you're own fund or at a hedge fund or a real prop desk).
I have no regrets because I've learned a lot that will serve me well going froward. But anyone who thinks daytrading isn't the riskiest way to trade ought to consider:
There are thousands of traders who work for hedge funds and IB prop desks. They make hundreds of thousands in salary plus another couple of hundreds of thousands (if not millions) in bonuses. So many of these guys are probably worth several million. And they know how to trade, they are expert traders. They can easily leave their jobs and trade their own money at a beach house swinging 100s of lots in futures, options, and stocks - and keep 100% of their money instead of getting a 10% bonus. But they never do that, why?
- There's a social stigma to day trading.
- There's no risk manager when you trade you're own funds. Hence there no one around that forcibly keeps risk tightly bounded - which prevents you from ever losing more than you can easily recover.
- There's no one to help you out when you're in a slump.
- There's no one around that will ensure that there is no deviation from the predefined strategy or system.
- There's no institutional resources at home as far as research, bloomberg terminals, programmers, etc.
the fact is very few traders make it in this business and that is why the losers or amateurs pay us the professionals. Once a trader learns to trade like a professional then he can begin to make real money. Trading is highly competitive, a participant is gaming it up against professionals that have much more experience and the bankroll to rip the amateurs to shreds. One doesn't need to daytrade to make big money. If you have decent chart reading skills and know when to place a big line when and where the risk is low and the reward is high, then who is tell you that you need to plop yourself in front of the PC ever single hour of the trading day.
It looks like you're only seeing the glass half empty when you speak about daytrading.
By your words, it's pretty clear that you are reluctant to being a full-time trader.
It's ok though, you do whatever fits your personality better and it's clear daytrading doesn't.
Keep in mind that it'll be very hard for you to learn how to daytrade when you have a full-time job and you only swing trade as a hobby.
If you take trading as a hobby, then you shouldn't be setting any goals. One year you win money, another year you lose money. Doesn't make much of a difference.
I perceive trading just like any other job.
If you learn it properly, why worry about the income? It's like learning how to become a good dentist...once you are skillful enough to drill people's teeth, then it becomes routine and it takes care of itself.
You also mentioned you're not the "get rich quick" type of guy.
Who said that daytraders want to get rich quick?
If that is the way you perceive trading, then you probably never approached it as professionally as you would any other job.
Trading is a business. If you decide to start a restaurant, does that mean you intend to get rich quick?
Trading can become a very rewarding business only if you can stick around long enough to gather the necessary experience and expertise to make money on a consistent basis.
The most common error unsuccessful traders make is to not be capitalized enough to survive the initial learning phase.
Anyways, you clearly sound very motivated to get a corporate job and do it the "safe" way.
Good luck.
I have a multimillion dollar inheritance coming to me in the distant future. So with that in mind, I was really not into climbing some corporate ladder to nowhere after I got out of college. After a few years of working in the corporate world, I left to try to build my own multimillion dollar fortune tru trading. It was all trail and error with no mentor for me so I ended up developing lots of bad habits I'm slowly undoing as I learn to see myself and the markets more clearly. I'm just tired of this rat race that is pretty much the same as the rat race I thought I left behind. Yes I will make millions but I want to put myself on a very safe, slow, steady, and sure path to achieving it. And I still have lots of time on my side.
"A true warrior does not give up what he loves, he finds the love in what he does." I never found the love for daytrading. It was all lust and emotions so far and I've grown tired of it. I'll never walk away from trading/investing - I just want to walk aware from the intraday timeframe - and all its seductive noise/randomness. Okay I'm done here.
This movie was really the catalyst for me to look at the bigger picture:
http://www.youtube.com/watch?v=TkGvT_iS2fM
"A true warrior does not give up what he loves, he finds the love in what he does." I never found the love for daytrading. It was all lust and emotions so far and I've grown tired of it. I'll never walk away from trading/investing - I just want to walk aware from the intraday timeframe - and all its seductive noise/randomness. Okay I'm done here.
This movie was really the catalyst for me to look at the bigger picture:
http://www.youtube.com/watch?v=TkGvT_iS2fM