Should I take the leap and quit my job to trade full-time?

People accept data that supports their beliefs and reject information
and interpretation that doesn't.
http://en.wikipedia.org/wiki/Confirmation_bias

So the OP will decide according to his heart anyway.

But I tell my story, since it might help the OP's decision.
I started trading part time in august of 2001, and did not plan to go full time untill "arrived". I had a good system developed with a friend of mine, but it was not giving the results we were expecting from backtesting. 2001 was a small positive year, and 2002 was a 2 digit (%) loss. Early 2003 the company I worked for went bankrupt, and I had to decide what to do: accept a job offer I had, or trade full time. The trading system was for swing trading equities and was making money only on paper. I did not have much saved up, I had a family with two children and we just borrowed money to buy a flat in the city where we lived. So it was an easy decision, you would say, and go for the job.
Well, I chose to trade full time and did not accept the job offer.
I spent 2003 and 2004 figuring out why aren't we getting the simulation results and fixing the problems. I am slow I know :-).
The system became more and more automated and I stopped interfering with the signals, adding shorts, etc.
2003 was 3 digit percentage gain but with tiny amount of money since we were living off the gains during the year.
2004, 2005, 2006 were all 3 digit gains in terms of percentage, and we could put in borrowed money.
The account grew nicely untill early 2007. So I thought I got there and was making big plans.
Well, it did not happen. From that point in 2007 the strategy stopped working. It seemed like somebody turned off the tap. It was still making some money, but the drawdowns became very painful and comparable to the reduced gains.
So I stopped the automated swing trading system and started daytrading manually futures and fx. I am a slow learner, as I said,
and spent almost 3 years daytrading before finally started to turn some profit, but I still have a long road ahead.

I think you have a slim chance to make it, unless you have time and money for surviving the (long) learning curve as others also said. But as an employee of some company your chances to "make it" may be even smaller.
 
Quote from Laissez Faire:

Hello everyone,

I was not sure if I should let this decision be influenced by the public opinion, but I`ve decided to think out loud and ask for some guidance. I`m sure many of you have been in the same place.

Entering the holidays, I had finished my first two months of live futures trading (ES contract) in addition to working a full-time job. Living in Europe, this allows me to trade the afternoon session in the US markets, while missing the open of the session.

Needless to say, this combination is very exhausting, especially since I sit up late with my post-analysis after the close and sleep way less than I should. My daytime job is also fairly demanding. I was very tired entering the holidays.

As for my trading, after some initial success, I`m now down $3000, much of it due to a terrible mistake on Fed day (QE2) and swinging too much size early on. In spite of this, I feel fairly confident in my abilities to read the market and I`ve improved immensely since I went live. I`ve spent the last two years studying the markets (after my first failure, knowing nothing back then), so I should be fairly prepared for the task.

However, the truth is that I have lost money and I need to re-evaluate things going forward from here.

I fear that if I continue like I`ve done, it will be very hard to achieve decent results in my trading. Much because I miss the open and potentially the best moves of the day, but also because it give me less time for analysis and preparation and also the fact that my day job tires me physically and mentally.

On the other hand, the reason I`m working a job is that I need to pay bills like everyone else. On the flip-side, my skills are in demand and I have a decent reputation so I will probably get a new job (or my old job) pretty quickly, if my trading does not work out.

Considering that I need to change course, I see the following alternatives right now:

1) Give notice that I`m leaving and fulfill the last two months of my contract working long days. I should probably be able to save $7000 by then. That should cover 2-3 months of living expenses. Start trading full-time in March.

2) Negotiate a deal where I resume my current job, but reduce my hours by 40-50%. This would allow me to trade full time 2-3 days of the week in addition to the afternoon session on the remaining days. Having some savings, I should be able to cover my expenses for a while, provided I live frugally.

If I can negotiate such a deal, I`m thinking that a reduced day time job would be my best bet as opposed to quitting completely.

Thanks in advance for any good ideas.

Best regards,

Laissez Faire
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Go for it.... The same was said to :Bill Gates, Stve Jobbs & so on. Control your own future. You know you can depend on yourself.
 
Quote from redone:

Why debate the issue while the US national unemployment rate is over 6%? I would only consider if the national rate were to fall below 6% then at least I would be confident that something out there might be waiting for me. As it is, a job is not a luxury in the US but something that they need and need badly.
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You make a valid point, but I don't think that it is so conclusive. The high rate of unemployment relates to the long expected delay in finding reemployment and the high uncertainty in that delay. Certainly this should be factored into ones stop-loss point (if OP find himself with only XX dollars remaining, he must give-up and starting finding a job.)

It isn't conclusive. I have known several people who cashed in their life savings and went traveling or drinking. They are all old or dead now, and the old ones are poor. Can I really damn them? None of them are asking me for pity.

I took a big plunge leaving an established firm, which had no futures, or a start-up with smart people and an unlimited future. I am grateful for what I learned from my coworkers and the experiences that I had, but the start-ups future was quite brief. Left unemployed in a state in which I knew no one in a house full of boxes which hadn't even been unpacked with too much debt to go back ... It has been a few years now, but in this economy, economic wounds don't heal. My wife and I fight all the time about my "big mistake." The guy who recruited me to this state has had the opportunity to see that not only evil, greedy wives but also children and friends will desert a man who cannot enable them. If I hadn't taken a chance, I wouldn't have the skills and experiences that I have today.

Taking all of the "right", safe, socially prescribed choices is not a recipe for happiness, but for the damnation of a life not yours.
 
Quote from Steven.Davis:

I took a big plunge leaving an established firm, which had no futures, or a start-up with smart people and an unlimited future. I am grateful for what I learned from my coworkers and the experiences that I had, but the start-ups future was quite brief. Left unemployed in a state in which I knew no one in a house full of boxes which hadn't even been unpacked with too much debt to go back ... It has been a few years now, but in this economy, economic wounds don't heal. My wife and I fight all the time about my "big mistake." The guy who recruited me to this state has had the opportunity to see that not only evil, greedy wives but also children and friends will desert a man who cannot enable them. If I hadn't taken a chance, I wouldn't have the skills and experiences that I have today.

Taking all of the "right", safe, socially prescribed choices is not a recipe for happiness, but for the damnation of a life not yours.
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There are risks and there are stupid risks. One-time business opportunities are fleeting but the financial markets will (probably) always be there.
 
Hi,
You know there are ways to trade without quitting your job. I trade stocks with hold times from days to weeks based on end of day data. I spend about 5 hours per week running my screens, entering my trades, and recording my results. I spend more time on research but that can be done whenever. I can continue to work and grow my account much quicker because I don't have to take money out except for taxes. I know I won't match the returns of the top day traders who can compound their money much faster, but I am still very profitable and I have lot's more extra time. Right now I fill that with working. I'm thinking next year I may fill that time with golf and reading.
 
Quote from fjpenney:

The following was on another thread:

1. We accumulate information – buying books, going to seminars and researching.
2. We begin to trade with our ‘new’ knowledge.
3. We consistently ‘donate’ and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our ‘updated’ knowledge.
7. We get ‘beat up’ again and begin to lose some of our confidence.

Fear starts setting in.

8. We start to listen to ‘outside news’ and to other traders.
9. We go back into the market and continue to ‘donate’.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get ‘over-confident’ and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

Most people will give up at this point, as they realize work is involved.

15. We get serious and start concentrating on learning a ‘real’ methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don’t follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.
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This list is eerily accurate. I would just add one thing.

37.2 -- We get a little overconfident and don't adjust to changing market conditions and market humbles us again.

37.3 -- We realize that while we thought we were at #37, in reality we were only at #34 again.
 
Quote from Steven.Davis:

That said, there are always a 1000 reasons to hesitate. Do you have a passion for this new life? Life is short. It can evaporate so quietly. Make peace with your choices and their consequences, and then take ownership of your life. Its hard.
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Well, last weekend I finally quit my soul sucking day job. It was an amazing feeling to finally be free, although I was too tired from accumulated fatigue over the last year to appreciate it fully :)

I have not been trading live the last months, but accumulating as much capital as humanly possible while still working on my trading and getting at least a few hours of sleep per night. I wish I had more capital, but I did manage to save up roughly 4 months of living expenses. I also have a low interest credit line that I will not hesitate on using if I need to.

I honestly think I have a good chance at making it. If not, I would not do it. It`s now or never. If I can`t make it, then I will need to pursue a career elsewhere and let trading remain a hobby.

One thing that I believe has helped me tremendously is manually backtesting my method bar-by-bar on the 5-minute chart. I`ve gone through a lot of data and it has truly helped me learn price action and refine my rules and methodology. This is a practice I intend on continue doing even as I resume live trading.

Thanks for all the previous advice.

Regards,

LF
 
best wishes LF to your successful trading


but, I have to say

DO NOT borrow money to trade, you would be compounding your losses
 
Quote from dwpeters:

Hi,
You know there are ways to trade without quitting your job. I trade stocks with hold times from days to weeks based on end of day data. I spend about 5 hours per week running my screens, entering my trades, and recording my results. I spend more time on research but that can be done whenever. I can continue to work and grow my account much quicker because I don't have to take money out except for taxes. I know I won't match the returns of the top day traders who can compound their money much faster, but I am still very profitable and I have lot's more extra time. Right now I fill that with working. I'm thinking next year I may fill that time with golf and reading.
More...

I wish the OP good luck and understand the exhaustion of trying to do intraday and work fulltime.

But I also agree very much with this post. I did a little better on the timescale described by dwpeters, holding days to weeks. A few dividend bearing stocks I held for months.

I know, there will be half a dozen people disdainful of this approach but I'm just relating honestly that I made more money this way than I did intraday. I had to stop when I went to work at Citadel and became more of an investor since then but just wanted to say that the days_to_weeks timeframe was working better for me when I was looking at it everyday. It is likely that my method, a mix of automated mean reversion using Matlab and seat_of_the_pants discretionary using ButtonTrader was just better suited to a slower pace.
 
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