Quitting Trading Job at my Bank to Day Trade at Home

[badnewsbear]

OP, the odds are against you. Most traders fail after a certain amount of time, whether it's days, weeks, months or years. Your idea might work in this raging bull market, but what about 3 years from now? Can you profit in a bear market? Can you make consistent returns? It's easy to extrapolate your returns right now, but you are deluding yourself if you think you will be consistent year after year.

What happens when the economy has high unemployment again, and you can't find a decent job when you need it. Have you really thought this through?

You went into investment banking; you should have done your research. The hours are awful. There is very little upside until you get promoted to VP. If you hate your job so much, wait it out until your bonus, and quit. But get another job with less demanding hours, even if it means a pay cut. A job is a hedge in case trading doesn't work out.

You know who wins out in the end? Investors. Not traders. Invest in yourself and your future. Stop gambling with your future and get it together for your own sake.

 

[riskaddict]

A friend of mine was trying to talk me into doing something like this but he doesn't seem like he works 80 weeks. Why are the hours so bad? Are there countless stupid meetings? I just went back to work and all the stupid fucking meetings are just ridiculous.

 

[smallStops]

Due to the difficult economic situation for some,
you are obviously being advised to think well before quitting your job.
And I guess many who tried trading might be desperate for a decent job.

The truth is trading in a consistently profitable way on your own is a very very very rare skillset, like winning a gold medal at the Olympics. . The strategy is just not enough. It is just one component.

 

[XChamp]

Are you familiar with the pyschology of trading ? Especially when your weekly / monthly income is on the line. Ever had 3 losers in a row, and then be expected to place your next trade as if the previous 3 never happened ? Its hard, and most fail at it.

Even the most profitable system will lose over time without stern discipline.


Are you 100% certain your system is profitable? Is automation possible ? What market are you looking into if you dont mind me asking.

Well, I am pro trader right now, but unlike trading on my own if I lose money I just get fired, no one confiscates bank account. However, I used to gamble for a living so I'm used to the swings, 5 days down in a row, etc. Of course they bother me, but I'm better at handling them than most (not all).

Automation is possible in the future to the extent that the strat might be able to run on its own overnight or through a day with no expected big market news.

I can never be 100% sure it's profitable. However, if it is profitable am sure that it won't be profitable forever, which is why I am anxious to start at home. Looking back historically it has been profitable as far back as bloomberg has data. If it works for two years after I quit that should be enough for me.

 

[XChamp]

I was in a somewhat similar position as you about 9 years ago. Took my strat out to trade at a prop firm for a few years and then went from that to trading from home. It was based around trading illiquid securities. The sad thing is it lasted only for 4-5 years. It has stopped working since the financial crisis. That's something you have to be prepared for. If it made money for 4 years, and suddenly it stops working and you don't have anything in the pipeline, what are you going to do? Do you have a fall back? The moment you are out of a job, the harder it is to get employed again no matter what your qualifications or prior experience was.

In my opinion, nothing lasts forever. Are you confident of your ability to keep up and always stay one step ahead of the game? That's why I am very skeptical of the self styled "price action" gurus here, proclaiming their success to all and sundry. Some of them even claim their "edge" will never die because of their guru-like ability to read a 5 minute chart. That's what we told ourselves too, it would never go away and how we would justify it by saying it was based on demand/supply,etc,etc. In the 80's, it was "trend following". Before that, "tape reading". Today it is called "price action." These newbies have no idea what is in store for them.

I have seen extremely consistent prop traders who have traded successfully for a decade with down days you can count on both hands being forced to leave the business in recent years because of the market environment. You can be sure the next major market dislocation/paradigm shift will carry out many of today's "successful" traders/strategies. The very last words of the Buddha, whom most people regardless of religious affiliation, would agree was a very wise man said," All compounded phenomena are impermanent. They are not lasting." We should all think about that sentence for a minute.

It really boils down to whether you want to take that risk and your ability to constantly and consistently innovate.

The strat is pretty high frequency to the extent that in a month or so it will be obvious whether it is working or not. It won't take years. I figure if it fails miserably at launch, then I have no resume gap. The problem is what if it works for only 6-12months? If it works for 2+years then I should have enough banked that any desk job will support the family, but 6-12months of success is actually the hardest, since I would have to find good work again. I think I might try to transfer the skills I learn to an algo fund somewhere.

 

[XChamp]

OP, the odds are against you. Most traders fail after a certain amount of time, whether it's days, weeks, months or years. Your idea might work in this raging bull market, but what about 3 years from now? Can you profit in a bear market? Can you make consistent returns? It's easy to extrapolate your returns right now, but you are deluding yourself if you think you will be consistent year after year.

What happens when the economy has high unemployment again, and you can't find a decent job when you need it. Have you really thought this through?

You went into investment banking; you should have done your research. The hours are awful. There is very little upside until you get promoted to VP. If you hate your job so much, wait it out until your bonus, and quit. But get another job with less demanding hours, even if it means a pay cut. A job is a hedge in case trading doesn't work out.

You know who wins out in the end? Investors. Not traders. Invest in yourself and your future. Stop gambling with your future and get it together for your own sake.

The hours are awful even above VP level. But as riskaddict was asking, it really depends on where you work and what your desk is like. There are guys next to me that work 13hour days and guys 1 row over that seem like they only put in 9-10hrs.

Part of the problem is meetings yes, but not like other jobs. Everyone knows that you are too busy during the day to meet so everything is scheduled at 4:30pm or later. You are done with the meeting at 5:30pm but still have to mop up before leaving and suddenly you are at work from 7am to 6:30pm for the 15th day in a row with 3 texts from your wife asking when you will be home and 2 missed phone calls from friends and family you haven't spoken to in too long.

If I quit, the economy tanks, the strategy fails, and I'm left without a means of income then yes, I am screwed. At some point the reward has to be worth the risk, though.

 

[GoldenMember]

If I quit, the economy tanks, the strategy fails, and I'm left without a means of income then yes, I am screwed. At some point the reward has to be worth the risk, though.

ET is compromised of Casual traders, Noobie's, Wannabee's, failed traders, and failed traders who profess to be profitable. Granted, there are a few experienced and consistently profitable traders who derive their sole income from trading, but they are in the minority and didn't get there overnight.

imho, the most successful traders are those who supplement their incomes, increase their net worth while maintaining a steady alternate flow of income. As time goes on, it may become apparent to them that full time trading is appropriate. The difference being they know from experience, proven results, their decision is clear. They didn't get there overnight either.

It appears you are trying to justify a life changing decision. Nobody on a message board knows your situation, or for that matter cares what happens to you. It is a fools errand looking for advice from anonymous strangers. albeit, many good comments posted above regarding the pitfalls.

That being said, you have many more obstacles than merely the mechanic's mentioned. Platforms, data, broker, commission, strategy, blah, blah, blah. That is the least of one's concern's, anyone can setup a computer, open an account and trade most instruments.

Your primary obstacle is the primary reason most traders fail, themselves, psyche. Yours is compounded by the fact you are Married.

It is a completely different animal risking OTM [banks] as opposed to risking your life savings, accepting the eventual draw downs and without blinking continuing to pull the trigger.

You think an hour on the train, and a phone call from your wife asking when you will be home is stressful? Wait until you have a negative down period, mortgage due and you start pulling cash from your trading account to cover expenses. Wife constantly hanging over your shoulder, the barrage of questions, and the inevitable nagging.

Single man, easily can cut expenses, live in a buddies basement, regroup. Try getting your wife to downsize. LOL

Good rule of thumb, don't quit the day job until your trading profits exceed your salary on a consistent basis. Projected, back tested, anticipated profits don't count.

Your last comment goes both ways, the reward has to be worth the risk.

Above you mentioned, transferring your skills to an algo fund. Finding a more suitable working environment sounds like a more viable solution than giving up an income to be a "Day Trader" [high frequency].

Again, only you know what is best for you and your situation.

 

[achilles28]

How can you be sure the strategy is profitable if it hasn't been traded, real-time?

A job is hard to come by these days, especially a lucrative one in finance/banking. Imo, sit tight, build the resume, experience, contacts, salary and bankable knowledge, for now. Since the strategy is manual, why not train a family member or close friend to trade a joint account? If it works, then leave.

 

[XChamp]

How can you be sure the strategy is profitable if it hasn't been traded, real-time?

A job is hard to come by these days, especially a lucrative one in finance/banking. Imo, sit tight, build the resume, experience, contacts, salary and bankable knowledge, for now. Since the strategy is manual, why not train a family member or close friend to trade a joint account? If it works, then leave.

I think I haven't made this clear. I trade this strategy right now at work every day in the desk's portfolio. Over 80 business days of doing it I am up 70 of those. My net profit is 50% of the capital I am using using. My worst down day is about 70% of my best up day. The down days come in clusters because I get into a position that I can't easily liquidate due to market constraints so I have to keep it on for a few days and slowly trade out of it. At home that wont be an issue because I will be trading 1/10th the size and can close the position in 1-2 trades.

I can't open a joint account. Compliance will be all over me. I can't even advise an account. Training a family member would require transferring over years of experience. That is not easily done. The mathematics alone would take years. The only other way to do it on my own is to quit my job and find another one that does not involve trading at an institution, bank, or hedgefund, which means taking on similar risks career-wise. I would argue that the risk is even greater since having 6months at XYZ Accounting Services would be more career killing than 6months blank on a resume if I want to go back to trading at a bank.

 

[GoldenMember]

I think I haven't made this clear. I trade this strategy right now at work every day in the desk's portfolio. Over 80 business days of doing it

I don't think you quite get it, a successful strategy isn't determined over 80 day's, perhaps not even over 80 weeks. It is determined over varying market conditions. Bull, Bear, consolidated, flash crashes, black swan events, etc...

We have been in extended bull market for years, 80 days is a drop in the bucket. This is what you are basing your long term plan on?

It sounds like you made your decision and are just trying to justify it. Good Luck