Purchase of Home or Trading Biz?

Candletrader,

Thanks for sharing your earning information with us. It is very encouraging for me to see that there is in fact at least one person who has been truly profitable trading for several years. You mentioned earlier that 100k wasn't really needed for most types of trading. Are you making this kind of income with an account of less than 100k? What kind of trading do you do? Thanks for any response you are comfortable providing.
 
Eldredge,

You don't need more than $50k on 4:1 (access to $200,000 intraday or $100,000 for overniters on 2:1) ... for information on my trading, see http://www.elitetrader.com/vb/showthread.php?s=&threadid=3074

To modify the phallic phrase: "Its not how big it is, its what you do with it", the same thing applies to trading: "Its not about how much you have - over a minimum of $50k say - its how you trade it and how well you keep losses low"

So in answer to your question on the size of my trading account, I have either got $50k (my contribution), $100k (2:1 margin for swings), or $200k (4:1 margin for intraday)... take your pick ... and my return on capital is therefore somewhere between 1.25x and 5x !!!

Candle
 
topguntrader, I know exactly how you feel in terms of what your boss is doing. That is the second worst feeling in the world. The worst being, of course, quitting the job and then losing 50% of that 100K you've saved up while you are on the learning curve.

There's no real answer. Figure out how to deal with the boss issue and that will be the first step in getting the psychology to deal with the pain that comes with those initial trading losses.
 
Originally posted by topguntrader
I have always dreamed.. I have worked hard.. I have always been terrified.. I could not beleive it.. my stomach sank.. I was exausted.. my mind was racing.. I could not imagine coming back.. deep down I know they want me out.. I am so sick of my apartment, my neighbors and my landlord.. I hate to say this but my biggest dream is trading fulltime... I dread the thought of sabotaging even a PENNY.. I think maybe I mentally deranged or a degenerate gambler..
More...

lets see.. dreamer, thats good.. hard worker, thats good.. terrified, hmmm emotional.. disbelief, malox moment, exhaustion.. more emotions.. mind racing.. negative expectations.. "deep down" paranoia.. dissatisfaction with life in general.. fear of failure.. concern about own sanity..

hey! im not just being a smart ass here!!..

there is a rule in life that says one cannot create something greater than that which they are.. for example, you cannot create a marriage relationship that exceeds your ability to be a loving and committed husband.. the answer to your question is also a question.. who are you? are you the sum of what you own? home+car+bankbalance = topgun.. or are you the sum of what others think of you? fiance+boss+neighbor+landlord = topgun.. please dont think i am calling you shallow, we all have to deal with these issues.. but someone once said that if you dont know who you are, the markets are an expensive place to find out.. try this.. close your eyes and imagine yourself as a trader.. imagine yourself working at home.. picture you sitting at your trading station.. imagine what its like to not have a job.. now imagine yourself losing money.. picture yourself going through a long and expensive learning curve.. now.. keep that picture in your mind and ask yourself if your self esteem has improved because you are taking on the challenge, or if having a loss and not being able to "get it" make you feel like a loser.. now.. imagine that others dont understand your profession.. they think you are a gambler.. a "get rich quick" person.. all of your friends think you are crazy.. how does that make you feel? does it make you feel 2 inches tall or does it make you want to re-double your efforts and prove them wrong.. now.. clear your mind.. imagine 10 years down the road.. you are now making multiple 6 figures as a trader.. what kind of home do you live in?.. what kind of car do you drive?.. what schools do your kids go to? think of the things you are able to buy for your wife.. what charities would you give to? get a clear mental picture of what it would be like to be a top trader.. now, ask yourself if obtaining this image is worth all the crap you have to go through to get it..

when you fist start trading there is a tendency to bypass all of the psychological mumbo jumbo.. but you need to know that you will lose money learning to trade.. you could lose all of your money.. in fact, you might have to lose all of your money before you are able to break the tie between your self esteem and your account balance.. some people wont respect what you do.. you need to know that.. and if your self esteem is tied to what others think, the pressure to quit will be very strong..

often failure must preceed success.. i have found this to be true of myself.. emotionally i was unprepared to be a trader.. and after 2 years i still struggle.. the question to ask yourself is if you can be committed to this.. is this an interest or a passion? in my opinion people fail at trading because they want all of the rewards of trading, but they try to bargain with the price of becoming a trader.. becoming a trader never goes on sale, you always have to pay full price.. so count the cost, and make your decision..

if you do decide to trade.. may Joe Kernan mention your longs, and the SEC investigate your shorts =).. good luck..

-qwik
 
Perhaps you would expect me to respond with a "of course, you should trade"....but I am not going to.

At your age you might want to think about the situation this way.....your job may or may not last....you may or may not continue to be happy there (it sounds doubtful based on what you have said)....you may or may not be able to find another similar paying job in today's (horrible) job market....now....

Do you want to stay there and be concerned about this woman who you think said something bad about you? How will your health (mental and otherwise) hold up with the daily stress from irritation and anxiety?

Will having a house payment help? Will housing prices hold? Do you want to be locked into a job to pay for a house that you may not want in a couple of years....?? Is the lovely lady going to care for you any less if you rent for a couple of more years while you figure it out? If she does (and I am sure she will care for you no matter what your decision is), then look out!

Buying a house is a double edged sword. In many parts of the Country you can rent a much better house for the same money as a house payment that may be mostly interest anyway.

Is the $100K any safer in real estate than in a trading business (probably by most standards)?

Perhaps buy the house, put your equity to work with a small amount of trading money (if this is your passion) .

I think that the decision is more whether you can stomach working somewhere where you think you are not wanted (that's why I have to work for myself...:-) ....or whether you can stomach the risk of being on your own in a business venture. Whether it be trading or running a software company, entrepreneurs have bigger risks and much bigger rewards.

Try to find a compromise, perhaps rent a place for a year or two, and see where your life takes you, job wise and happiness wise.

Just my 2 cents!! Good Luck!
 
If I were in your shoes, I would keep the job. Who cares what others say, just be self-assured and know that you are the only evaluator of yourself.

You or your boss are both just a serial number in a corporate hierarchy... I know... I work for a BIG technology company.

The book titled "Live Rich Die Broke" helped me a lot to look at a day job from a completely new perspective and taught me how to work for myself while having a job.

Trading is addictive indeed... but like candle said... easy money aint there no more... besides, you can trade currencies 24/6, or swing trade stocks... it's also a good gauge of what you could achieve if you would start daytrading.

One last thing... if inevitably you won't be able to keep your job... don't quit.... let them make the move, at least that way you keep getting the paychecks and later unemployment benefits and all.
 
This is a question I get asked by potential traders all the time. Here is my standard response. Why not trade longer time frames and see if you can make a little money on small postions on a consistent basis. You will learn all about trading. Seeing prices on a five minute chart or a one minute chart is not that different than eod data. Its all trading. There is little advantage to trading really short time frames until you become a really good trader. Day traders just have more opportunities and consequently more costs and for many more stress.

Trade small on a swing trade basis and get profitable. Daytrading is no fantasy. It is hard work. If you become good at swing trading you can quit your job and play golf instead of watching your monitor all day.

By the way I quit being an attorney to daytrade, and I held off getting married until I could make a living trading. Then I got married and bought a house. But, learning how to daytrade is very similar to learning how to swing trade. I am currently learning how to swing trade with the goal of not having to watch my screen all day long unless the market is really moving.

Now real advice, If trading is your passion you will not make commitments that will screw up your trading. If security is what you want well.... Ed Seykota said you get what you want out of the markets.
 
Another option you can consider, do what hitman is doing. Trade with other people money. At least you are not losing you own money but someone else money during you learning curve.
 
Tough decisions to make.

Remember ... it's always better to be happier than to be right!

I have had many friends leave 6-figure, high-stress jobs for lower-paying jobs but are much happier. Spending times with their family, doing what they want.

#1 - Why not do this? Take a 6 month leave-of-absence from work ...

Take $25k and goto a Prop. firm and daytrade for that period. That should be enough time to see if you like it or not.

#2 - Depending upon where you live, maybe you can trade the morning (930-1130 est) then goto work.

#3 - Work for yourself ... you definintely can make more money ... read the book "The Millionaire Mind". 80%+ of millionaires are self-employed business owners.

#4 - Put $25k in an IB account. Take 3-4 weeks vacation and daytrade with small share lots (5-10 shares). Not factoring in commissions, see if you make any money. If you can make $1.00/day trading 10 share lots, then you should be able to make $500/day trading 1000 share lots.

The real estate market is due for a correction. I'm holding off a new home purchase for at least a year.

Good luck w/your decision. Keep us informed.
 
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