Start-up Capital - Loans, etc...

Quote from mdhtrader:

Alright, so I want to get into trading. I know this is what I want to do for a living, as I know I have the discipline and dedication to succeed and that I want to go with a prop firm. Problem is, I don't have $20-30k anywhere. Parents aren't rich so can't go there...and saving this amount will take too damn long even though I live way below my means...

So my question...do you think banks, gov't, etc have a loan or something out there? Considering its day trading would it be difficult to obtain? Ideas?

Anyone with experience, advice (or even an amount I could borrow, heh) would be greatly appreciated.

A little about me: college degree, good credit, eagle scout (for what its worth.)
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Do not borrow money to trade! I did that early on, lost $30K and really regretted it, as was saddled with debt for a couple of years. Many successful traders here will tell you they blew out their account several times en route to success. It takes years to learn to trade. Better to trade on paper, using an audited account, or with small amounts.

There is a reason it is believed 95% of new traders lose all their money... Because it is likely true
 
Quote from MandelbrotSet:

Thanks for your post loik.

Joab has already given a detailed comment on it, and sophiekay gave him another clue, but he is a grown and (very responsible) man, so he is free to do as he chooses.

Of course it is better to be Lucky than Smart or Rich, and it seems that Bruce is all the above ... but how many people do you realistical think could do the same?

If it really was his first trade, I would say you get the same odds playing the Lotto.

P.S. It does not surprise me that the only guys who will listen to and understand the advice given to the OP regarding this subject are the guys who already know it.
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I'm listening, and soaking up all the info and wisdom I can before I go out and do anything...realistically am I going to borrow money? No. Especially after reading what everyone has said. Thats why I appreciate everyone's participation, I'm trying to get my crap together before I even think about trading one share...
 
Quote from mdhtrader:

Yeah I've read many times and understand its not a good thing to borrow money to trade which I can see...but its like any other business, yeah?
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I'm sure someone has addressed the above statement but I'm just reading through now and had to reply to this.

Trading isn't like any other business. Based on the above quote from you, I would urge you to seriously consider NOT trading.

With trading you are almost guaranteed to lose it all the first time, perhaps even multiple times. I'm not aware of any legitimate business, that you can get a bank loan for, with such a guarantee. Ask yourself this, would you as a banker make such a loan?

I mean this sincerely, you have no idea what you are trying to do if you think a bank will lend you money or even that borrowing money is a good idea.

Your best bet, after rethinking everything, is to consider a job with one of the major agricultural firms with a trading desk in Minneapolis. Bottom line, you'll learning how to trade and you'll get paid a salary. If I had to do it all over again, this is what I would do.
 
Quote from johnpinochet:

I'm sure someone has addressed the above statement but I'm just reading through now and had to reply to this.

Trading isn't like any other business. Based on the above quote from you, I would urge you to seriously consider NOT trading.

With trading you are almost guaranteed to lose it all the first time, perhaps even multiple times. I'm not aware of any legitimate business, that you can get a bank loan for, with such a guarantee. Ask yourself this, would you as a banker make such a loan?

I mean this sincerely, you have no idea what you are trying to do if you think a bank will lend you money or even that borrowing money is a good idea.

Your best bet, after rethinking everything, is to consider a job with one of the major agricultural firms with a trading desk in Minneapolis. Bottom line, you'll learning how to trade and you'll get paid a salary. If I had to do it all over again, this is what I would do.
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Thats why I'm here asking questions...I've pretty much revised any consideration to borrow money now. I didn't really think it was a good idea, but just that, an idea I thought I'd ask about and if anyone did it. Thanks for your advice, I'm also looking for trading desk jobs...difficult in Seattle to find...
 
Quote from MandelbrotSet:

This is a very bad idea.

Do not ever borrow money to trade with it.

It doesn't work that way.

GL
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this would have stopped many an entreprenuer......
 
Quote from ElCubano:

this would have stopped many an entreprenuer......
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shrug, as has been related previously, trading is not the typical entreprenuerism. but if the OP wants to take a shot at it, good luck ... :D
 
I traded as a retail trader for 11 years, with some of those years up and some down (totally inconsistent). After searching for many years for a consistently profitable system (and losing more money), I finally found it trading options on the Nasdaq 100 index and spent the next 10 months trading it in a cash account. I grew my account from 14k to 20k in that time. It occurred to me that I might ahve a shot as a professional trader so I then used that capital to fund a move as a series 7 licensed prop trader with Bright Trading. Bright would not let me trade options so my consistently profitable system was useless and I had to learn to daytrade.

I spent the first couple of months trading small, but soon became drunk with the massive amounts of leverage extended to me and grew my account from 20k to over 40k in one month of trading. Unfortunately, I had not yet learned to respect the importance of capital preservation and protection. Risk exposure soon caught up to me and over the next several months I gave it all back plus more, blowing out my account. I then entered Bright's mentorship program (when I realized I might need some help) and continued losing money. After a couple of months of this I asked for a new mentor, which they gave me, and who ended up being one of the finest teachers and Human beings I have met in a long time. I continued to lose money but at a much slower rate and now I was learning how the professionals trade.

About 5 months ago I switched to using a simulator and also started trading the E-minis instead of stocks. Throughout this whole time, I also continued to trade the Nasdaq 100 options through a system I post on Colective2 (but that is all virtual at this point). For the emini trading, I use Ninja trader as the simulator and E-signal as my datafeed. I am now generating an average of $239 per day trading 2 E-mini contracts and plan to go live in another month or so. My style is strictly technical analysis and Market profile.

I left Bright about 2 months ago because the leverage inherent in the E-minis makes the leverage offered through a prop firm unnecessary. And why pay desk fees for something that isn't necessary?

The reason I am telling you all of this is so that when I say "if I had it all over to do again..." you will understand what I have been through and why I am saying it. Of course, I cannot convey the emotional and psychological stress and strain this journey has put me through; only someone who has been through it can truly understand. But at least you can understand the series of events...

So here is my advice to you if I had it all over to do again... consider trading the e-minis, because as a trading instrument, they are phenomenal and I have already mentioned the great leverage. I mention this only so that you can bypass the funding requirements and overhead of prop firms. Ultimately, only you can determine the optimal choice of financial instrument(s) to trade given your expected capital, time availability, tolerance for volatility, etc.

Even more importantly, get a live data feed and compatible simulator and trade whatever you are going to trade based on a trading plan you will develop as you go. Switch to live trading ONLY when you are consistently profitable in accordance with the goals you have established in your trading plan.

If you follow this advice you will save yourself a LOT of money and pain.

Regardless of your path, I wish you the best of luck in attaining your goals.

Sincerely,
Daryl
 
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