What would YOU do?

Elcap - good luck to you if you decide to go for it,,

there is no job security for us engineers :D so i must congratulate you on having established a good plan in order to change your career path..

50-60 hrs of studying the markets and developing strategies on top your regular work schedule is pretty remarkable IMO
 
Prove to yourself that you can do this. Take 10K and see if you can double it. If you can then you have the evidence of both skill and a system. If not, you've kept your job and limited risk.

One of the benefits of this business is that you can GREATLY reduce your risk and put up as little money as you'd like (or your system dictates). Don't neglect these.

Best of luck
 
Quote from elcap73:

Thanks for the input (and links) thus far.

Murray, I actually live in Alaska. Do I know you from somewhere? Are you living here in the 49th?


I look forward to more thoughts from ETers on my situation.
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El-capital;

Research trades/traders before i make move/keyboard;
clicked on your nickname, which told me about Alaska:cool:

Live in Tennessee and between Alaska salmon & moose meat you could probably trade wth less capital than most:cool:
 
-To thine own self be true.-

GRE scores and past professions are only baggage we carry with us through this life. I have found wisdom is much more valuable than intelligence and you need not be intelligent to be wise.

Your financial situation was very similar to mine and I am sitting here 2 years later, having not reported to the man in that time period, but you have to report to yourself and those that matter to you. If you want to do it and are serious about it, you will find a way to make it work. I truly believe that attitude is the most important thing regarding this decision, even more important than having a "system". You have clearly demonstrated that you can learn, so the question should really be, DO YOU WANT TO LEARN IT?

You will learn VERY QUICKLY if you have what it takes to invest/trade/speculate successfully. In my own experience I have found that searching, finding, addressing and living with my true self was the most important discovery. That my friend is what you will never be able to put a price on. You may discover things about yourself that you never knew, and you may not like what you discover either.

- Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth.

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same.

And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I--
I took the one less traveled by,
And that has made all the difference.

-Robert Frost
 
You have to have computer skills with all that engineering going on, right?. Go with automated trading and keep the daytime gig. Before you can automate a strategy you have to have the entire thing quantified and you sound like the guy that could do it. With automation forcing you to complete your self education you will have the advantage of knowing when you have "got it". I could look at a chart and know things years ago, quantifying it to the point of automation, well that was a whole 'nother story believe me.

Keeping your job could allow you to grow up some more as well, and that while learning your next career.

I have been on the above described path and it has been truly rewarding. Knowing that you have another career coming online makes the daytime gig so much easier passing, I have grown up a bit in the last few years really, and I am not at all young, and the future looks so good I gotta wear shades. :cool:
 
Quote from maxpi:

Go with automated trading and keep the daytime gig....

Keeping your job could allow you to....
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You must have missed this part of my original post:

"My current job will end in about one year (project oriented and the project is nearing completion)."
 
Almost scary to ready your post! That was me 10 years ago. Engineer, corporate world, INTJ, worked 50+ hours per week, salary was approaching plateau, I detested corp. politics and bureaucracy, lived well below my means (but NOT at $12K/year), no debt, house was paid off, very self motivated and driven.

I had been thinking of a change for 3 years when I left the security of the corporate world to trade. I also had traded, initially paper trading, then real money while I was still working. I managed to win a few weekly contests (best % return) on a few investment sites. I continued to learn and read, everything from TA to IBD to fundamentals. When I left I started trading small as initially you have some fear (of no longer having that paycheck) as well as desire to protect your trading capital. So I was content to make small profits and develop confidence in having a reasonably high percent of winning trades. I've been trading ever since (May 2006 will be 10 years). Along the way I've traded a LOT of different ways. For a while it was primarily TA driven where I'd analyze hundreds of charts nightly, I've played CNBC stories for a quick buck, I've "learned" stocks and traded them exclusively (trading same stocks over and over for months or even years), I've traded 52 week lows (or max percentage daily losers) for small bounces after researching why they were so beat up. I've had good years and a couple bad years over that time. But I enjoy trading more today than when I started because I've learned how to switch gears when necessary. As the market changes so do my ways of trying to make profits. I try to draw on what I've learned over the last 10 years to adapt to current conditions.

What I've learned is that you can succeed doing this if you know yourself, have discipline and adhere to it. I'm not in trading to make a ton of money. I'm not greedy. I'm in it to make a living. Thus, I tend to take profits as the market dictates. If we're in a choppy market it's small and fairly quick profits. If it's a bullish trend I may let profits ride a lot longer. I'm a hybrid trader in that I day trade and put on position trades. Both types of profits are necessary for me to reach my goal.

The freedom of trading is great. I love to be able to knock off early if I've made enough for the day.

In the end you'll need to decide if this is what you want to do. You sound as though you're ready as far as having saved up living expenses. You sound like you want to dig and learn everything you can. One bit of caution .. don't overcomplicate things. If you're using TA for example don't try to use too many indicators. Good luck.
 
Great post above :)

My advise is to not put the cart before the horse.

I was in the same situation 3 years ago (had a much bigger savings though) when I went fulltime.

In that time I bought tons of stuff too and I have had two mentors, One was excellent for Material and Education and the other was excellent for Psychology but if I had to do it over again I wouldn't go down that road because mentors have a different set of problems that you have to deal with.

Even if you have a good mentor you must adapt to his/her style which maybe totally different then your personality and style so it's really a crap shoot to find one that is right for you.

Also

I would NOT have gone fulltime till much later if I knew then what I know now and I would have not traded with real money till much later.

I am profitable now but I still have (my original savings) to dig out from under and that may take another year still.

Something you may consider is a trading partner that seems to be a better route then a mentor in my opinion.
 
Quote from Samson77:

... but if I had to do it over again I wouldn't go down that road because mentors have a different set of problems that you have to deal with.

Even if you have a good mentor you must adapt to his/her style which maybe totally different then your personality and style so it's really a crap shoot to find one that is right for you.
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Good points. I didn't go the mentor route for the reasons you cited. Each of us is an individual and you can't necessarily adapt to another person's style or approach to the markets. Only you know what you feel when you put on a trade.

I found that I "evolved" as a trader as I learned more about the markets and more about myself. You can't put a square peg in a round hole and thus why I didn't want to go that route. When I first started trading at an office it was at All Tech. They had a "boot camp" where they taught traders how to scalp. That wasn't my style and I told the guy who owned the office that if I was required to attend that boot camp (cost was like $5000) that I'd trade elsewhere. He was okay with that and said he just wanted me to be successful. Each person has to find what works for them and that often takes time.
 
elcap73,

I an engineer who trades futures part-time, with trades that last 1-3 days. From day one, I was a breakeven trader, and after six months, I was profitable, but not enough to make a living. This is where I am now. I used to have a flexible work schedule that allowed me to trade on an intra-day basis, but not anymore.

Here is what I would do in your situation:

1. Continue working as an engineer for the salary until the end of the year.
2. Grow your trading account significantly. I think trying to make a living trading stocks on $35K is very risky. Make sure you also have an emergency fund and enough to pay for other expenses, such as medical insurance, etc.
3. Develop a short-term trading strategy to supplement your trend trading (longer-term) strategy to smooth out your equity curve. As you know, trend trading has the potential for very large drawdowns.
4. Use this year to gain more trading experience, continue learning about short-term trading strategies, and about trading futures. Get comfortable trading futures!
5. Make sure you have a good framework/model for following market/crowd behavior. I think too many people who try to trade do not really understand the market and only know basic concepts like buy dips in an uptrend and sell rallies in a downtrend. I highly recommend Linda Raschke's and Wyckoff's methodologies. They teach sound principles that work in all markets and timeframes that allow you to think for yourself and not simply follow a mechanical system. They teach you how to interpret price action, not just follow lagging indicators that are a derivative of price. I don't think there are very many successful traders following mechanical/automated systems, just my opinion. All the successful traders that I know are discretionary traders. From the description of yourself, it sounds like you're on the righ track here.
6. Once your project is over, take a few months (e.g., 2-3 months) off to trade full-time, if you're not profitable, I would get a job again and go back to step 1.

Hope this helps.
 
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