Transition to full time trader quitting school and work

[Trading Education Buyer]

 

[wintergasp]

Hey guys

First post, so here goes!

I just want to introduce myself to everyone beforehand. I am a 25 year old finance student


For the last 5 years I have been consistently trading small cap stocks between (0.25-3$) I have had only 3 losing months out of the past 60 months and average around 42-57% a year. My system also allowed me to trade while in class and at work and also allowed me to monitor my positions from my cell phone and PC at work I only work about 20-25hrs a week part time and I am allowed to trade at work.

I started trading with about 7-8k in 2011 and now I’m at 200k with some money I added as well. I am able to net close to 100k a year trading and another 25-30k working part time.

My biggest fear is that one day the market or the way these small cap stocks are priced will dramatically change and I won’t be able trade the way I do and will never be able to stay consistently profitable. I have recently stopped going to school and have switched to working only part time so I can focus on trading. How have you guys gotten over the fear of losing your edge or not being able to trade profitably. I don’t want to be a 35yrld trader who loses his edge or blows out and then becomes unemployable or has no other skills.

I also don’t use a technical system, just price action and volume and reading the bid/ask. I feel like my small cap system is more of an art form than anything else. If you approach trading with a purely mechanical system I think you will get cut down after some time. My dream is to become a full time trader in the next 3-4 years and would greatly appreciate if you guys can tell me how you transitioned into full time traders and what were some of the challenges you guys faced?

Cheers

I don't want to sound negative, but the last 5 years was essentially the best years of the S&P 500 over the last 100 years or so.

How do you know you don't just make beta performance ?

If you actually make alpha, you're much much better off joining a hedge fund, after 5 years in you can easily bank up to 1-2m£ per annum

 

[apo99]

lol beter lucky than smart

I don't want to sound negative, but the last 5 years was essentially the best years of the S&P 500 over the last 100 years or so.

How do you know you don't just make beta performance ?

If you actually make alpha, you're much much better off joining a hedge fund, after 5 years in you can easily bank up to 1-2m£ per annum

Because i only trade equities in the tsx V and partially the TSX which has been in a down trend since the last 4-5 years. And this method is not scale able so going to a hedge fund wont do anything

 

[HeSaidSheSaid]

Its not macro bear markets that are always the problem. It's personal bear markets. Every strategy is long some risk factor. And there are times that risk factor isn't earning. If you are trading risk arbitrage, you are generally market neutral but you are long deal flow and stable financing markets. If there aren't deals or there is a financing crisis, it's unlikely you will earn much.

As a career trader, you will have to manage through the lean times.

newwurldmn and qxr1011, please tell how many instruments are you trading at this moment?

 

[newwurldmn]

newwurldmn and qxr1011, please tell how many instruments are you trading at this moment?

Why does it matter? What do you define as an instrument?

 

[wintergasp]

lol beter lucky than smart




Because i only trade equities in the tsx V and partially the TSX which has been in a down trend since the last 4-5 years. And this method is not scale able so going to a hedge fund wont do anything

That's bullshit.

1)
If you have a real alpha even on a small niche, you'll still find a job and you'll learn other niche and other markets as an employee of the hedge fund.

2)
stocks with market cap > 500m$ aggregate to 2.4e^12, or 2,400,000,000,000 $ or 2.4 Trillion.

3)
3 days of down market and you made money didn't mean you're not just the result of biased variance.

hope this helps

 

[apo99]

That's bullshit.

1)
If you have a real alpha even on a small niche, you'll still find a job and you'll learn other niche and other markets as an employee of the hedge fund.


2)
stocks with market cap > 500m$ aggregate to 2.4e^12, or 2,400,000,000,000 $ or 2.4 Trillion.

3)
3 days of down market and you made money didn't mean you're not just the result of biased variance.

hope this helps

There are many niches like mine on penny stocks, mirco cap, small cap that work with accounts up to 1-2m after that they dont. If you go to a hedge fund with this they will laugh at your face. Its hard enough to enter a 20-30k positions in these companies i cant imagine doing it with 100k plus per position. And no one said anything about 3 days ive been using this strategy since 2010-2011

 

[wintergasp]

There are many niches like mine on penny stocks, mirco cap, small cap that work with accounts up to 1-2m after that they dont. If you go to a hedge fund with this they will laugh at your face. Its hard enough to enter a 20-30k positions in these companies i cant imagine doing it with 100k plus per position. And no one said anything about 3 days ive been using this strategy since 2010-2011

What hedge fund did you talk to, who laughed at you ?

I work in a hedge fund. Just saying.

 

[apo99]

What hedge fund did you talk to, who laughed at you ?

I work in a hedge fund. Just saying.

No one did, but i assume that if i walk into a hedge fund and tell them that i trade micro cap, small cap and
Penny stocks, with a 400k account with a strategy that isnt scalable they really wouldnt give a shit

 

[Zzzz1]

Not true, small cap funds can be several hundreds of millions in size. Maybe not PENNY stocks but definitely small cap strategies can be scaled quite a bit.

No one did, but i assume that if i walk into a hedge fund and tell them that i trade micro cap, small cap and
Penny stocks, with a 400k account with a strategy that isnt scalable they really wouldnt give a shit