The Evolution of a Trader

Same here, was in IT for 7 years and making 6 figures. Decided to do full time trading because I got bored of programming.

$700 daily figure is about right but you have to consider variance. No one can do exactly $700 every day. You'll probably need to have a range of +2000/-1000. Feast when you can, and cut losses quickly.

Personally, I'm hoping to reach 500k yearly trading. The upside potential has to be worth the risk. If you have IT compensation of 150k with benefits, to justify switching to trading full time with its greater risk, the return has to be at least 2x or 3x.

In addition, to be able to achieve that daily rate, I think you'll need to be able to trade multiple markets. I quickly found out that my primary instrument, SP eMini, was so efficient, it was difficult to pull out the typical 2 points. Many days, if you missed the morning rush, you might as well have called it a day. Volatility would just die in the afternoon. I now trade the ER, EUR/USD, YM and the ES. In addition, I plan to add other currencies, crude oil and gold. If I decide to give up sleeping, the DAX, DJ Stoxx 50 and Nikkei 225 have good liquidity and good movement as well. IB Universal Account makes it easy to trade foreign markets.


Quote from fh2000:

This is purely an observation and not a comment of any sort. I was thinking of this last night and did a mental calculation. I am currently working in an IT field as a full time professional. I have been doing this close to 20 years now. My current salary and other conpensation total in excessive of 6 figures and I would say this is fairly common in this field.

If I were to convert that into trading income, I would have to have close to be making $700 gains on each trading day consistantly. I am using 220 trading days to calculate. I am not even sure how many there are in a year.

If I could say that a large number of IT professionals with 20 years of experience can earn 6 figure salary and conpensation. Do traders in similar years of experience earn the similar income, or majority of them earn a lot more, like in the millions?

I know I am not quitting my day job. Trading for me just a very sparce activities throughout the week day. I am simply wondering if such comparison is even close in any type of scale. Feel free to flame....
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Quote from jojo45688:

You hit the nail on the head when you said that if youre trading the right way it is quite boring. To me, success in trading equals consistency over a significant amount of time. I'm a huge believer in keeping a journal of some sort, or at the very least logging your trades (when you got in, out, and taking note of any marekt conditions occuring during which time)

I did this for a while manually and I wouldnt even keep much detail but I always dreaded spending the extra time to jot things down. I'm using TraderDNA now as an automated trading journal, and it pretty much does everything for me. I dont really have to mess with anything, not even interpretation, as its all done for me automatically now. At the end of the day I look at the report it sends to me and can see in 10 minutes what exactly happened during the day, what i did, what the market did, etc..

Also, I've been organizing all of the daily reports in a massive journal by the P/L box reading for each day, so I can look back on any particular day and review what happened. I'd recommend doing something with an automated journal, as you can spend more time interpreting the readings taken and scores for the day, so to plan an adjustment for your next session, etc...
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What does DNA do, I went to website and I can't figue it out. Is it automated trading only, or an analysis program, or a journal, or all three? I appreciate your feeback. It sounds impressive.
 
cnc, I'm in the same boat with you when it comes to emotions in the market, especially re greed, once I get a good gain $200 to even $800 plus, instead of selling it , stopping out, I would let it ride and boom 800 becomes 400 before ii sell .

or 200 becomes -100 dollars. or I have a decent gain for the day 200 to 300 dollars ($200 a day times 5 days a week equals $1000week times 4 weeks equals $4000 month - not so bad just for making $200 5 times a week)

anyway my 200 after commissions paid, instead of turning off computer and walking away and take my 200 dollars and be happy,, I would want to make that one more trade (greed) and when I did 200 became 0 or -100 and I screw my day financially.

so now (trying different things)turning off computer not work i can always turn it back on. so I pull out the mouse cord and lock the mouse in a drawer that only my wife has the key to , therefore can't trade anymore, or make the font so tiny i can't see it and thus can't trade, give myself severe consequences if I do trade again after my gain good for the day, repeat the gamblers anonymous( same as AA) "my name is bill and I am a stock market greed - a - holic" "I will not place that one more trade (or bet) that may wipe away all my gains(roulette money say I've just made)etc. by repeating that daily in front of my wife and kids, it commits me to admit daily that I am a greed a holic.

anyway these are some of the thing s I 'm doing to stop my greed and it's working , not always , but it's helping me a lot and I am keeping those $200 plus gains more often vs. blowing out my gains like before!

anybody else reading this have more ideas regarding how to stop being greedy (it's human nature everyone does it). like guy earlier said here "you have to be an automoton to be a successful trader" so true you have to be like a robot and turn off your emotions when you trade and or want to stop trading.
 
I still battle with greed, which to me is closely related to fear, sometimes the exact invesrse. I'm getting a little control over it recently with a simple but effective (at least for me) thought to bear in mind while in front of the computer: Make sure my fear of losing money is stronger then my fear of missing out. I keep this statement on a post-it right in front of me.
 
That line has been used fairly often especially by a lot of trading advisory services. "Get your XXX points and then quit for the day". It implies that you got lucky so don't press your luck.

If you are a good trader, you have a sound trading methodology. Most times, it's about waiting for your high percentage setups. In that case, you always want to be ready to take advantage when the opportunity strikes AND you want to take those setups as often as possible.

Overtrading is another matter and is NOT sound trading.
 
Greed, fear, to pull or not to pull the trigger, the answers lay in "Trading in the zone". Read it as many times as required, you'll be amazed at what you learn.
 
Its basically a beefed-up automated trading journal that gives you a daily assessment, or "report card" of exactly what happened in your trading day. Beyond the basics (# of long, short trades, avg. P/L per trade/contract, p/l per wins/losses) it gives you like 30 or so additional "scores" based on metrics it records while you trade. for instance, it tells me the time spent in trades and compare, like how much time you spend in winning, losing trades, missed opportunity score that pinpoints certain trades that could have been more profitable, a score that tells you if you are pyramiding effectively or dangerously, a gunning score that tells you if you are effectively adding to your winning positions or doubling up on losing trades, etc...

Theres a bunch of scores, and you get the report everyday. I intially started using it for all of the stats it gives you. The basics that I used to get from J-Trader (average P/L, my positions for the day) paled in comparison. recently i've started to put more weight on the particular readings and scores ive been getting and i've started to tweak some small things for the better. It definately helps in that regard, theres a ton of information it gives you so it can be overwealming to read into all of it at once, but i guess this isnt a bad thing (more is better than less).

As far as the website, i initially signed up for it on www.rcgpsd.com/traderdna. I think I went to the same site you went to at first and thought it was super-confusing and vague so i got in touch with them by phone and took it from there. Good luck, and glad I could help.

PS- if you do start using it, we should get back in touch.

-Josh




Quote from dandxg:

What does DNA do, I went to website and I can't figue it out. Is it automated trading only, or an analysis program, or a journal, or all three? I appreciate your feeback. It sounds impressive.
More...
 
Sounds like my story is similar to a few others here. I have been in the IT field for over 20 years, the last 15 or so as a consultant.

The pay is very good and I thank God for that. But as others have stated, I am getting burnt out. Especially as each consultanting gig pushes me more and more into project management and managing a group of programmers.

Staying with my programming / consulting gig versus my passion for the markets has been a real emotional tug of war as to when to totally walk away from IT. Hate to totally give up the steady and rewarding paycheck so for now I continue on.

On the bright side my programming skills have paid off on the trading front. I currently only trade two markets regularly. The Nasdaq emini which I do with no automation but I also wrote a automated trading program for trading the Russell emini using several custom indicators which is working out nicely.
 
Quote from fh2000:

This is purely an observation and not a comment of any sort. I was thinking of this last night and did a mental calculation. I am currently working in an IT field as a full time professional. I have been doing this close to 20 years now. My current salary and other conpensation total in excessive of 6 figures and I would say this is fairly common in this field.

If I were to convert that into trading income, I would have to have close to be making $700 gains on each trading day consistantly. I am using 220 trading days to calculate. I am not even sure how many there are in a year.

If I could say that a large number of IT professionals with 20 years of experience can earn 6 figure salary and conpensation. Do traders in similar years of experience earn the similar income, or majority of them earn a lot more, like in the millions?

I know I am not quitting my day job. Trading for me just a very sparce activities throughout the week day. I am simply wondering if such comparison is even close in any type of scale. Feel free to flame....
More...
$700 per day is very possible, even likely in some cases. However, you should not be thinking in terms of hard dollars, $500, $750, $1000, etc. You should be thinking in terms of the average Percentage gain.

If you have a margin account with an intra-day BP of $100,000 (minimum for a Daytrading margin account) and you're pulling down $700 per day Net average, then you're trading with an average Net of 0.7%. As a long term average 0.7% Net would be close to phenomenal. Conversely, if you have a margin account with an intra-day BP of $1,000,000 and you're bringing in $700 per day Net average, then you're trading with an average Net gain of 0.07%. As a long term average 0.07% Net would be close to abysmal.

Now calculate not the hard dollar amount of net income, but the daily average percentage amount. 0.7% per day Net would equal a 175% annual return over 250 trading days. This is possible to achieve, however, it is extremely unlikely for a beginning trader. 0.07% per day Net would equal a 17.5% annual return over 250 trading days. This is a much more likely accomplishment for a beginner. However, taking into consideration that a diversified portfolio of several ETFs and Mutual Funds can easily return 10% - 25%, would you really want to trade full-time for 1800+ hours a year just to achieve an annual Net return similar to a Mutual Fund/ETF portfolio? Take into consideration, that BP for most retail trading accounts is x4 intra-day, and your initial cash trading capital would be returning 70% per year, but that is only after trading full-time. Overnight BP is x2, so a diversified Investment portfolio could still earn you a 20% - 50% return, with much less time required to manage it.

Before figuring out what you need to make, it is usually wise to find out what you can make. If you are capable of making an average of 17.5% Net return on an account with $1,000,000 of BP, your annual income would be $175,000 as a full-time trader. With an average return of 20% Net on an account with $500,000 of overnight BP, your annual income would be $100,000 as a part-time, at best, investor.

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