Took out a loan to transition to full-time trading. 24 years old.

[wabu27]

Beginning of day: $38090.89
End of day: $37815.94
P/L: ($274.95); -0.72%

Pretty boring market today. Very nervous to be daytrading again. Its been 5 years and 1 month. Was able to enter and exit as I felt the need to without giving into emotions so overall satisfied with the start. Sucks to start with a down day but not complaining. It feels good to trade again. I feel like I started at not the best point in time with the ugly nasdaq and sp500 charts, but looking forward to tomorrow.
Things watching: gdx, airline stocks, faz

 

[wabu27]

@wabu27 I don't see the borrowing as the problem (although the interest rate is too high) but the fact that you don't seem to have a very clear methodology. When I started, I knew I had something and when not trading it, it felt like throwing away money. Before that, I didn't even want to trade that much because my methods were very uncertain. You said "Wish me luck! I really do need it." and that sent alarm bells ringing for me.
I'm not rooting for you to fail but I think you will.

Would it be too personal to ask how big you trade (account size) and approximate returns you made/make throughout your trading life or at least yearly?

Ok...

In one months what characteristics will suggest to you that an individual has "talent"? please answer the question specifically.

You know some of the best traders on this site took 6+ years to become profitable.

@Visaria

I think a month is enough. Even the best traders fail and it's an ongoing fight against yourself. Having your game down and playing it successfully for a month, to me, shows you have talent in trading. Now the question is do you have enough self-control to do it for the long-term. The talent may be there, but your emotions might get the best of you. Applies to a month-long trader and to a 6+ years long trader.

Its like quitting cigs. You never "quit" smoking, you just abstain from it. You can only say you quit if you have successfully abstained from it till you die. (my opinion as a previous cig advocate)

You're not getting the results you want one way so you're trying another approach, one you haven't really tested properly but are ready to put live money behind. That sounds a bit like gambling to me.

It appears you have the workings of some methodology but instead of keeping it small to get consistent with it first, you're borrowing money at very high cost and are betting your credit rating on it. I can't see this having a happy conclusion.

Yea, I agree it's gambling. Too much risk taking going on but dice is thrown, we'll see how it plays out.

That's an insane rate man.. high way to the poor house.

Here in northern europe you get an unsecured consumption loan up to $50k for 3% APR, if you borrow against your own RE you get 1% APR. (this after 33% annual interest deduction that we got here)

I would advise only pro traders that know what they are doing to borrow money for trading.

Dang really wishing I lived in Europe right now.

 

[Georgii]

Yea, I agree it's gambling. Too much risk taking going on but dice is thrown, we'll see how it plays out.

Why not instead give the loans back, find a trading firm that offers you a chance to trade remotely and gives you 10X leverage with a $5000-$10,000 deposit, take the Series 56, and then see how you do? Figure you'll be out a few hundred for the test plus about $200 in fixed costs per month, but the worst that can happen is you toast $7400 at the year's end ($2400 in costs and $5000 deposit) and are back to zero as opposed to owing the bank money. And if you happen to trade well, you'll be way less stressed out because you don't have your credit rating on the line. Something to think about...

 

[wabu27]

Why not instead give the loans back, find a trading firm that offers you a chance to trade remotely and gives you 10X leverage with a $5000-$10,000 deposit, take the Series 56, and then see how you do? Figure you'll be out a few hundred for the test plus about $200 in fixed costs per month, but the worst that can happen is you toast $7400 at the year's end ($2400 in costs and $5000 deposit) and are back to zero as opposed to owing the bank money. And if you happen to trade well, you'll be way less stressed out because you don't have your credit rating on the line. Something to think about...

Hey that sounds like a much safer idea. Do you have any suggestions on the firms? For now, I gotta maintain my current job to pay for recurring expenses but I might transition out of this loan thing to what you suggest in the future.

 

[Georgii]

Hey that sounds like a much safer idea. Do you have any suggestions on the firms?

There are a number of firms like this, they call themselves 'prop trading firms'. I have never done business with them so I will not offer any names, but if you check in the 'Prop Firm' section of the forum you will get more than an earload on all of them: good, bad, and ugly. Keep in mind many force you to keep your deposit with them for one year (SEC regulations). So choose wisely and do your homework. Way smarter, either way, than dealing with the bank.

 

[d08]

Would it be too personal to ask how big you trade (account size) and approximate returns you made/make throughout your trading life or at least yearly?

I started with very little, around $32k of borrowed money (I put up only like $2k) from family and the profit was shared 50/50. My APR should average about 65%.

I think a month is enough. Even the best traders fail and it's an ongoing fight against yourself. Having your game down and playing it successfully for a month, to me, shows you have talent in trading. Now the question is do you have enough self-control to do it for the long-term. The talent may be there, but your emotions might get the best of you. Applies to a month-long trader and to a 6+ years long trader.

That's not really the case at all. You see you can have an exceptionally easy market for your trading method so you might return something like 100% in a month if everything lines up. Of course since your method is high risk, you would suffer a 70% loss very soon. Market is highly unstable in volatility - you will have years when nothing seems to move, then you have years when everything is ridiculously volatile AND they all move together etc.
If one month would be enough to judge a trader, the world would be full of amazing traders because there's always someone having a killer month.

 

[wabu27]

Day 2:
Beginning of day: $37815.94
End of day: $39109.89
P/L: $1293.95; +3.42%

Woke up late today.. and saw airline stocks up. Was watching airline stocks this week and I couldn't go along for the ride but not disappointed.
Made money on DUST today.
Made money on VSX but a little disappointed because even though I thought it would go up more, it wasn't a strong enough set up for me. If I had more cushion I probably would have left a position in it but since current capital is something I can't afford to lose, I exited early. And it went up. Lost psychologically but I saw the momentum and made gains so w/e.
Very disappointed in how I traded FB. Saw the overexaggerated drops and went in. Rode the second big wave about half of it down but not mad about that, I exited when I wanted to so w/e. Mad about the third big drop because I saw the bottom and went in, but with the last small drop exited my position because I got scared. Already lost all the gains I got from VRX and more, and didn't want to lose more capital. Watched FB shoot up. It was like -2.5% by that time. Thought it would recover a lot more but didn't like the setup and did not have the balls. Can't believe it ended up going positive during the end of the day (did not expect that much of a recovery), but the entry/exits I did on FB was very pathetic. Very disappointed on how I traded.
Frustrated from FB, played with SCTY. Knew it was going to hit positive before the close but sold it at .32 because I had to go into a meeting in 12 minutes. 2 minutes later hits .40. And like 2 minutes later hits positive. Not disappointed with how I traded with SCTY but just wished I was a little more patient.

Overall, i give 3 stars to how i traded today. Would give myself 2 but I made an okay gain today and followed my trading plans most of the time. Also 2nd day back in daytrading so ending it on a positive note relieves a tiny pressure off my shoulders.

 

[wabu27]

Day 3:
Beginning of day: $39109.89
End of day: $43342.15
P/L: $4232.26; +10.82%

Wow what a crazy day. DUST still being good to me. Wasn't seeing much other action in beginning or any good entry points but thought I could make something out of WDC so dipped my foot into that. I'm not sure if I was net positive or net negative on WDC but made some and lost some. Volumes were weak across the stocks I was screening. Was not satisfied with how I traded WDC. Saw an opportunity in VRX and went into that. Weak volumes and bad entry/exit points. Not satisfied with this trade either and was scared because of the longer period of time I was sitting on the trade and the weak volume, but I saw the trend as going up so held steady. Then BOOM! I was refreshing my brokerage account and the total $$ started going up. I thought the system had an error or something and that's when I saw the VRX chart. Sudden unexpected boost and I was like "WTF What is happening. No idea but I'm satisfied with this profit" and exited. Ended up exiting at $33.03 which was a really good exit. All luck right there, but made huge gains today thanks to VRX. I experienced these giant unexpected moves before but it was all going against me. First time in my life a sudden change happened to move for me, and wow it feels great.

I was thinking of giving myself 2 stars for todays trading for poor entry/exit points but I stayed in VRX seeing the trend and while luck was probably 95% of the whole results, still gotta give credits to someone and who else but me. For such huge returns today, giving myself 4 stars for todays trading. Withdrew $2000 afterwards for my mom so tomorrows starting money will be $41342.15.

 

[wabu27]

Day 4:
Beginning of day: $41342.15
End of day: $42085.77
P/L: $743.62; +1.80%
Weekly Gain: +15.74%
YTD Gain: +15.74%

Not a bad day today. Played with FCX right from the start and while I thought it would bounce higher, I saw a possibility of dropping a lot lower so I exited but it ended up going higher...higher than I expected but w/e. Made a profit. Played around with JBLU and DAL and made money. Had an appointment so missed a good chunk of trading time in the middle of the day but the appointment ended early so I went back to trading. DUST did not go well for me today...pretty bad actually and when I checked my balance I was negative for the day. Stupid DUST. Then looked for opportunities and found DDD. Played with DDD and did very well. Traded like how I would expect myself to trade on a typical normal day. Not too crazy, not too volatile, in control, and making profits. I was up to +3.6% for the day thanks to DDD but in the end I messed up. My account balance was just under $43000 ($40 short) so to get that $40 and end up above $43000 for the day I forced some trades in and ended up losing half my profits. Such an amateur mistake. Got greedy for $40....

Trading for today I give myself 3- stars. Was in control all day, going in and out on a slow, not too exciting market. Good entry and exits. Was thinking of giving myself 3+ stars until I messed up at the end. Man, 1.8% is just on par with my daily goals but losing half the gains on such amateur trades just making me frustrated.

Withdrew $500 cause my mechanic said I need to replace all 4 tires so next week's beginning buying power will be $41585.77.

Weekly Analysis: Off to a better start than I expected. Was very nervous taking out high rate loans to daytrade since I'll be screwed if I can't pull it off, but a week in, things are looking a lot better. Most of the gains was thanks to a lucky break from VRX on Thursday, but my tradings not too rusty and I'm recognizing good opportunities so I'm building up confidence and looking forward to more trading next week.

 

[Georgii]

Withdrew $2000 afterwards for my mom

Withdrew $500 cause my mechanic said I need to replace all 4 tires

I think it's very nice that you're thinking of your mom, and tires may be something you can't do without. But isn't there a more important stakeholder who is charging you crazy interest for that money you borrowed?

To be honest even if you have an edge and are performing well, you're not too far away from problems when you hit the inevitable underperformance/slowdown/drawdown. At that point you'd be happier if you will have made some progress paying back the bank. I think it's irresponsible to be cutting checks from your account until you've paid back your debt, it's finance 101.

I've read many similar threads like this where someone starts a journal, they start trading big size (which is what you are doing, basically), they have some good days, they post about it, and then when they hit drawdown its like a house of cards collapsing all over the place. As they're on their hot streak they don't want to listen to the naysayers, and then inevitably its time to eat the humble pie. Don't be that guy. Do the smart thing, deleverage, and get hooked up with a prop firm so at least you give yourself a sporting chance as opposed to messing up so badly that you will have a hard time getting a mortgage and face tough questions in job interviews about your credit. Yeah I know, if this works out you won't need another job and you're going to pay for your house in cash, but what if it doesn't work the way you hope?