Trading micros vs prop firm(IE: TopStepTrader)

[MercForHire]

Hi everyone,
this is a great forum with a great deal of knowledge and skilled traders, I am thankful to be here.

I just want to get your expert opinions on what's the best way to start off my full time trading career. I quit my full time software engineering job to pursuing full time day trading career last month.

Here are some brief details on myself:
- day trade Nasdaq Futures only, 9:30am - 4 pm
- following trend-following trading strategy focusing on 1-5 minute timeframe, using black box indicators + fixed set of rules, some discretion required such as adjust trailing stop loss, manually close off trades at 4pm, etc.
- "paper traded" my system for 4 month since August, November and December so far has been much worse than August and September. ("paper traded" because I was doing it periodically during work and had the benefit of hindsight. For each trade, I marked the exact point where I take a position on the chart based the signals and my rules, sometimes take more than few seconds to process the rules which can erode the real time result)
- hypothetical performance was good at average 40 points/contract, 8 trades a day
- currently account size of $20k

However, when I tried to execute the trades in real time on a $50k Combine account with TST. I discovered there are a lot more to trading than just having a system.
I had issues with hesitation, jumping the gun(before a signal is formed), taking trades that were against my rules(SL higher than 10 pts), taking a profit manually without exit signal, skipped out on entire trading session after a couple wins and missing out the big move, fear of hitting the daily loss limit...
On down days where my model has a modest loss of -10 to -15 points, my actual account would be down -25(-$500) or more.
Overall I am still breaking even at worst just no where near the hypothetical results. I still need couple months of practice.

Do you think I should switch to trading live 1 micro instead? Perhaps I am not psychologically ready to handle P/L $20 a point, but at $2/point it looks much less threatening.
There is any reason to use prop trading firms at all if you have at least $20k and a profitable system?

Thank you in advance for any advice.

Cheers

 

[Overnight]

... I quit my full time software engineering job to pursuing full time day trading career last month.

Why does this sound vaguely familiar?

Do you think I should switch to trading live 1 micro instead? Perhaps I am not psychologically ready to handle P/L $20 a point, but at $2/point it looks much less threatening.

Now that the equity E-micros are available, I say yes. Spend too long in sim and you'll wind up like me, with a psychology that works only in sim and not live. But of course, each person handles the markets differently in the head when it comes to real money trading.

There is any reason to use prop trading firms at all if you have at least $20k and a profitable system?
...

If the system is profitable in real money? Then no. All it becomes at that point is a matter of scaling up size.

 

[MercForHire]

I used to gamble day trading stocks in my earlier days. $20k all in NVDA back in 2017 and win/loss few hundred to $2k a day. Somehow I didn’t feel much stress back then when I had no system. Now when I know my future will depend it. Everything feels different.

 

[ZBZB]

If you can program then automate your signals and you will no longer anticipate them.

 

[MercForHire]

If you can program then automate your signals and you will no longer anticipate them.

The signals are contained in a black box program and not output-able. Plus there are still some discretion required. Automation is something I can look into after I master manual execution.

 

[ZBZB]

The signals are contained in a black box program and not output-able. Plus there are still some discretion required. Automation is something I can look into after I master manual execution.

Don't trade black box systems, develop your own.

 

[MercForHire]

Why does this sound vaguely familiar?



Now that the equity E-micros are available, I say yes. Spend too long in sim and you'll wind up like me, with a psychology that works only in sim and not live. But of course, each person handles the markets differently in the head when it comes to real money trading.



If the system is profitable in real money? Then no. All it becomes at that point is a matter of scaling up size.

Thanks, I joined this forum after seeing another guy who also quit his job and became a day trader. You might have caught a glimpse of his thread.

I guess I should prove myself to be profitable with micro and get off the Combine hamster wheel simulator.

 

[MichalTr]

Do you think I should switch to trading live 1 micro instead? Perhaps I am not psychologically ready to handle P/L $20 a point, but at $2/point it looks much less threatening.
Cheers

You already answered your own question. If you think (and have attitude) that you are not ready then you are not. And if you feel that $2/point is more comfortable for you that is what you should go with.

And don't get into "I will success when I have x months/years more of practice". There are ppl who "made it" after months, there are others who made it after years, and there are ppl who never made it (even after years). That's very nice that you want to put effort and that for sure will give you something but if you have availability to do it - just do it. You know - you can prepare and prepare and prepare and never try (waiting to be ready, in the meantime markets markets will change etc. etc.). So just do it and in the meantime put work to develop. Of course it doesn't mean you should put your 20k, trading NQ with those problems that you described and just wipe your account in short time (which can hurt you psychologically). But you mentioned micros and that's better option. You should just be aware to treat it seriously. You know to avoid effect - NQ is too stressful for me, but from the other hand about those PnL moves in micro - "I don't really care".

There is any reason to use prop trading firms at all if you have at least $20k and a profitable system?
Cheers

If you have 20k and profitable system (which you can't be sure now until you prove it profitable in live/ most close to live environment, real time, not only backtested) then you can spend some time to trade it producing some nice statement (you don't need to make huge returns, it's about % and ratios) and then it's good idea to use some prop/fund to give you a shot or to leverage your money. After that if you are sure that's robust you can even go into arcade mode - so put some deposit in exchange for leverage (+ good commissions structure). Of course nicer version is do it without depo (but it will be harder to do). And that can work. Just my opinion.

 

[MichalTr]

OK, I didn't read all the stuff.

" quit my full time software engineering job to pursuing full time day trading career last month.
" - you what ???

"Now when I know my future will depend it. Everything feels different."
You have done yourself huuuuge psychological pressure.

And what I wrote before - I didn't assume that you need to make a living from that. Or you have some normal funds to use except that 20K to trade ?

 

[MercForHire]

Don't trade black box systems, develop your own.

OK, I didn't read all the stuff.

" quit my full time software engineering job to pursuing full time day trading career last month.
" - you what ???

"Now when I know my future will depend it. Everything feels different."
You have done yourself huuuuge psychological pressure.

And what I wrote before - I didn't assume that you need to make a living from that. Or you have some normal funds to use except that 20K to trade ?

oh I am not in a financial pressure. I am consider this as taking a permanent break from my career. I been doing it nonstop for 6 years without a vacation since graduation.

But I do not want to go back to my IT career, since my backtest profit was twice to 3 times my previous income trading just 1 NQ contract.

My wife and my rental property can sustain my living costs completely without my income. I still need to make $ as a man of the house.