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

jk90029 said:
If OP is 24 yo, then you have roughly 60 years of opportunity, until 84.

Suppose you have 10K of cash , then

1) with annual 5% compounded, 10*1.05^60 = 186.7919K is expected.
2) with annual 10% compounded, 10*1.1^60 = 3044.816K is expected.

If you have saving of 100K, then

1) with annual 5% compounded, 100*1.05^60 = 1867.919K is expected.
2) with annual 10% compounded, 100*1.1^60 = 30448.16K is expected.
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He was not a profitable trader prior to taking out the personal loans.

Simply, out of the gate it didn't make sense to take out loans. Therefore, pretend compounding only further the illusion many have if they take out personal loans to fund a losing trader.

Reality, he didn't make it. Compounding not needed.

wrbtrader
 
It is true, for most (95%) trader who is a loser eventually.

In case there is TAX and COMMISSION, 95% is a loser in most countries.

wrbtrader said:
He was not a profitable trader prior to taking out the personal loans.

Simply, out of the gate it didn't make sense to take out loans. Therefore, pretend compounding only further the illusion many have if they take out personal loans to fund a losing trader.

Reality, he didn't make it. Compounding not needed.

wrbtrader
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wabu27 said:
Hi guys - in need of your opinions.

I'm thinking about quitting my current job soon and trade full-time. I'm 24, been working for 1.5 years at a finance firm, and make little under 60k per year. Right now I have $9000 and I just took out a loan of $11000 from lendingclub which is going to be deposited into my bank account in less than 4 business days (26% APR). My current plan is trade safe until I get to $30000 then start day-trading. I don't have experience daytrading with real money due to lack of capital but I think I'll be able to make make consistent returns while cutting my losses short.

The reason I think i have a talent in trading is (haha..) my experience from virtual trading. Using $100,000 account with 2x margin ($200,000 buying power) I was able to consistently make at least 2% returns a day while keeping my losses to 1% a day. I participated in virtual stock competitions and finished first places. I developed my own trading style and later found out it was a mix of what people refer to as momentum trading and technical trading.

I've also traded during college and used the profits to pay for rent, phone bills, living expenses, etc. Please note I had about $5000 at the time and I was able to make $1000 (~10% return a month due to leverage) in most months. This was under PDT restrictions. Due to the stupid PDT rule once I went under for a month and because I was paying bills, in the long run I lost money. But every year it's always positive a couple thousand, then slowly sliding down to end the year in the red after that "one month" of negative returns.

I told one friend about my loan and while all he said was "I think that's too risky. Well, you might get lucky but don't do it again", his initial expression was "WTF is he crazy?".

I understand what I'm doing is extremely risky, but I always thought I had a talent for trading and it came off as easy to make at a percent a day. I also never keep my trades overnight. Any thoughts on my stupidity?

Should have asked for people's opinions before taking out my loan, but the dice is thrown...
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That $11,000 loan at 26% interest is dumb. I think with $9,000 you can trade and make a living. I do not know how good a trader you are and if adhere to strict risk management on your trades. So, probably, to be safe, I would suggest you keep your job. Trade part time not as a day trader but, a swing trader. Also, learn to trade options directionally buying calls and puts. Options give you leverage, limits your losses to the cost of the premium and allows you to get outsized returns relative to the small amounts of capitals you risk. That said, options have a fixed time or expiration and time decay eats your options premiums when your trade goes against you when the stock goes down, assuming you have a call option. It is important to cut your losses and keep them small. Your gains have to be far larger than your losses to offset the times you lose on your trades!
 
Pekelo said:
OP, Wabu hasn't posted in the last 4 months, but he had fluctuations like this:



It is safe to say in this current volatility he is dead, Jerry, dead.
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No risk management and that is why you need it to minimize the chance of blowing your account. Suggested is never risk more than 2% of your capital in every trade. He took way more risk, swung for the fences and missed enough to cause those huge losses! I suspect he also, did not have a trading journal. How can you review your mistakes to correct it if you have no records?
 
Happy 2019. Hopefully a profitable 2019!

Oh man, I have so many changes in my life but the bottom-line is the same: I'm going to get rich trading stocks or die trying.

Going to start trading live again starting next Monday, January 14th,2019.

I will also post a daily short summary of what had happened. This time, I'm going to limit my responses to people giving me feedback but will be reading all(most?) the comments. Please tune in and see how my account does in 2019 :) Happy New Year everybody.
 
I was up more than $300 in beginning. Trading okay. Than lost all of it. Failed to see loss of strength. Stubborn. LOL. 1 day of live trading and I'm done already because the minimum needed to trade 1 crude oil futures increased from $2900 to $3280 and I ended up at like $3180. GG. Will be back in february.
 
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