When is the right time to quit your job and trade full time?

[xandman]

This whole needing to have a million dollars to trade is complete nonsense.

Not quite. True: Some people have gone on to make fortunes on a shoestring budget. But you really have to put risk adjusted returns into perspective. Most people don't beat the market on a risk-adjusted return beyond one business cycle.

In an average business cycle the market can be seen to produce 10-15% a year for 4 years, then take a dump of 30%-50% on the 5th year. As an individual trader with a modest bankroll, how many multiples of this risk are you willing (can) to assume to earn a living?

Additionally, there are microstructure games that are simply an exploitation of the way things are processed. But that requires a lot more capital, know-how, access and prioritization afforded only to institutions. And, the low value added know-how is arbitraged away via automation.

ie. "Things get harder every year" " It's not like the way it used to." "The guys upstairs makes money"." The guys downstairs makes money"."-----makes money.""Nobody is making money."

 

[i am nobody]

Starting with a few assumptions

As you say, you use assumptions. Assumptions can be true or false. As a good lawyer you use assumptions that fit your story.

It is not because a trader does not want to show his trackrecord, that he does not make returns higher than 10%. I can also tell you that somebody has a very small wiwi. Because he does not want to post a picture to proof that I am wrong I am right? Very simplistic logic (it is even not logic).

We could ask you to proof that this trader cannot make 10% too. So proof that he cannot, otherwise he can. I follow your logic.

You say deduct taxes. How much? I know people who pay officially over 50% but I also know people who pay only 1.2%. Makes a huge difference.
If he makes $100,000 and pays 1,2% taxes, there is $98,800 left. Where he lives he needs about $35,000 to pay living expenses. So he can grow his fund by $63,800.

So depending of the way the assumptions are chosen the result can be more than 3 times more than what you calculated starting from the 10% return. On top of that the next year the profits will grow by 6.3% because his capital will be bigger. The next year it will grow again. After five years his profit will be almost 36% higher.

Trading and consistently making money is not easy, and many people will never achieve this. But what disturbs me is that some people use intellectually dishonest tactics. Suppose I make more than 10% a year, I would never disclose it. Does this mean that I didn't' make this return? No it only means that I don't want to share it. Which is my right (and what most successful people will do).

In general very rich people keep a low profile. And because they keep a low profile others use this as an argument against them. They don't proof they are rich, so they are not rich. That's what you are saying basically.

 

[xandman]

Argghhhh, I got pulled into another Trader Metaphysics thread. I want to kill myself.

 

[i am nobody]

Argghhhh, I got pulled into another Trader Metaphysics thread. I want to kill myself.

If you have a consistent and profitable system that makes more than 10% a year, can you send it to me before you kill yourself? Thanks in advance.
I am even prepared to come to your funeral.

This posting is ironical. Not serious. Because otherwise it would confirm that I make less than 10% a year.

And no, I will not proof anything.

 

[luisHK]

A little history. I am a experienced trader. Went back into the work force a year ago to build up money. I already have a developed trading system going on. I work for the fed and dislike everything about my job and just want to quit and trade. Trading is my main passion. No family. In my 20's.

I can make more money by trading full time then working at my current job. My job is mundane and I feel like I'm wasting my brain power and soul on stupid office shit. My job duties and requirements conflict with any possibility of trading part time while working. I do not want to trade while working and there's so simple way to trade off a mobile as it's impossible to check it often without coworkers getting nosy.

I'm consider quitting and going back to full time trading. Good? Bad? Pros and Cons?

If you don't like your job, that's already a pretty good reason to quit. If it's true you can make more money trading even moreso.
You're in your 20s, you still have time to try a few careers, opportunities should reveal along the way.

 

[luisHK]

If you have a consistent and profitable system that makes more than 10% a year, can you send it to me before you kill yourself? Thanks in advance.
I am even prepared to come to your funeral.

If guys trade actively aiming for less than 10% a year on average, what is the point of spending a lot of time trading ? Investing shouldn't get much less than those trading goals if at all and one keeps much more freedom.

 

[Jakobsberg]

Jinxu - There really isnt enough information in your original post for people to even begin to guess the probabilities of success FOR YOU.
For example. How much capital have you got ? What return before taxes do you need ? How good are you, track record etc ? Whats the summary of your method etc ?

If you just ask should I give up my job for a living everyone makes up their own assumptions and generalizations about traders to support whatever opinion they already have.

If you just want to sit back on a beach and not do much then yeah you probably need 1+ M USD but if you have made money going long and short in different markets over many year and know how to use leverage when appropriate then no you don't.

 

[rallymode]

A little history. I am a experienced trader. Went back into the work force a year ago to build up money. I already have a developed trading system going on. I work for the fed and dislike everything about my job and just want to quit and trade. Trading is my main passion. No family. In my 20's.

I can make more money by trading full time then working at my current job. My job is mundane and I feel like I'm wasting my brain power and soul on stupid office shit. My job duties and requirements conflict with any possibility of trading part time while working. I do not want to trade while working and there's so simple way to trade off a mobile as it's impossible to check it often without coworkers getting nosy.

I'm consider quitting and going back to full time trading. Good? Bad? Pros and Cons?

Forget the 10-20% crowd, you cant grind yourself to riches or financial independence in the current environment. Do you have access to leverage? Can you emotionally handle the swings that come with shooting for 100-300% annually assuming the capacity is there. If NO then stick to your job and trade your stuff passively on the side. If YES then go all in for a couple of years and see what you are made of. People who cant handle risk will never become financially independent from trading so go big or go home and enjoy the comfort of your current job.

 

[Handle123]

A little history. I am a experienced trader. Went back into the work force a year ago to build up money. I already have a developed trading system going on. I work for the fed and dislike everything about my job and just want to quit and trade. Trading is my main passion. No family. In my 20's.

I can make more money by trading full time then working at my current job. My job is mundane and I feel like I'm wasting my brain power and soul on stupid office shit. My job duties and requirements conflict with any possibility of trading part time while working. I do not want to trade while working and there's so simple way to trade off a mobile as it's impossible to check it often without coworkers getting nosy.

I'm consider quitting and going back to full time trading. Good? Bad? Pros and Cons?

I takes so fricking long to get really good at day trading, you end up breaking down price into so many stats, truly you have to love numbers and probabilities. You end up being able to program where in other industries this makes little sense.

If I had a chance to do all over again, I would have never added day trading, would have stayed with long term trading and added options instead of day trading. Less time involved and more money can be made, plus would have stayed working for the government, gets tiring of being isolated, people you know don't have a clue what you do and talking to them goes over their head. You spend years in your cave learning to get even better.

You can always automate your method, find a different job that is interesting. But if you insist on day trading, have at least three years of money in your bank account to live on. Get up early and trade Europe, good action, currencies move, metals, energy. If you can't make money during these hours, you not going to make it day session either.

Can you ask for leave of absence?

 

[El OchoCinco]

Before you trade for a living why don't you analyze first what amount you would trade with, how much you can realistically make per month/per year, whether you can survive a draw down and do not forget to count the withdrawals monthly to live and eat.

P.S. no one here can tell you what to do, a trader should already have the fortitude to be able to do it full time with no other support.