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

[jinxu]

Wow. There's a more replies and follow up questions then I was expecting. I'm gonna try to answer whichever ones I can. Don't be offended if I skip yours. It's not personal. . Page 1.

Then, create a plan where you go from part time to full time. Consistency should be the key where you can see your current cash flow from work becoming marginalized by trading profits. In the end, you will be putting more stringent lifestyle restrictions on your self because of the unpredictability of drawdowns which you have to budget for.

Originally, trading was supposed to be a backup plan in case the fed job didn't work out.

I would imagine we're around the same age, so if you want an opinion from one of your peers, no, it is not a good idea. Consider all the perks you'll be giving up. Medical benefits. paid vacation, sick and holiday. Retirement benefits. Consistent income. Trading for a living provides none of this. There's trading occurring 24/7. Trade your time off to supplement your income. Dont dedicate your life to staring at a computer screen in your room in your underwear. That's not any more glamorous than working a shitty day job.

Honestly, I don't know if those perks are really worth it. Case in point, take a close look at all the federal workers you know and work with and you begin to wonder if everyone in government is messed up??? I also don't plan to dedicate my life to staring at a computer screen by not trading 24/7 simply because I don't really think I need to.

No foreign markets open that you could trade then you're off work? like evening 5pm-1am.

Consider systematic swing trading? You receive a long/short signal, open the position with fixed SL and PT, and it takes care of itself with no monitoring needed.

I have tried that as a test. The problem with doing swing trades with signals and a job is that you can be busy with meetings and work that you can miss you signals quite often. I had it set up so that I get text message whenever a signal get trigger and I would just either miss them because I was busy or didn't hear them. That's why I mention that it didn't really work for me because I don't want other people to know about my trading activity before. Already gave up a previous job because people didn't understand what trading was about.

I also don't consider trading after hours is a good idea.
Page 2 later.

 

[marketsurfer]

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.

Vix is speaking reality. You sound like someone who is bookwise with limited real life experience. Care to show me how i am wrong?

 

[jinxu]

Why did you go back to work in the first place?
If you have programmed a trading system that you would plan to use, just use it while working.
Quit when you have enough money to live on interest/annuity/dividend payments.

Everyone needs a job. Fed jobs are stable from what I hear. Trading was getting a little boring. Now I understand why it's still better then working.

1) You won't make more than 10% a year in the long-run. Anybody who says they do should promptly provide a verifiable track record, and longer than 5 years since everybody and their dog made more than that in the last 5 years so that doesn't count. My guess is nobody here will. Feel free to prove me wrong and provide long-term proof

I've been able to make 10% in one DAY before. If you're only investing in index funds then 10% is reasonable. But I've been able to capture high returns with futures.

I think it would be better to switch jobs to one where you can trade on the side vs. quitting to trade. Think about the business side of it. Good business people want returns with minimal risk. If you have a trading service you could offer, that can be a good start. Get a side biz going on the sly - if u can do that, u are moving to a winning position vs. a desperate position.

Also, some side businesses are a good fit with trading. For example, if you aced the SATs, u can make decent side money tutoring in the afternoons.

I agree a different job that is more tolerant of trading sounds like a good idea. I don't know of any that are and if there are they are rare. The SATs example sound kind of risky. What if a parent sues you for their kid not getting a perfect score??

 

[xandman]

LoL. You are stressing in a Fed job. And, you feel a need to find a job more tolerant of trading.

I can't resist not posting in this thread. This stuff is like heroin. Admin, ban me!

 

[jinxu]

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 ?

That's okay. I was really seeking some ideas and advice. I think I more then capable of creating my own descision from that.

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.

Currently, my plan is if my trading can make double the amount I am making right now. I would quit. I'm not concern with how much I need to make. I trade and make whatever the market is able to give.

 

[jinxu]

LoL. You are stressing in a Fed job. And, you feel a need to find a job more tolerant of trading.

I can't resist not posting in this thread. This stuff is like heroin. Admin, ban me!

Not sure what you mean. If you think Fed workers are lazy, that's simple not true. Sure a lot are, but who do you think is picking up the slack.

Don't know why you needed to be insulting. That's one of my main concern about trading full time. While working has it's con's, at the very least it makes you a little normal since you have some social activity being around other people.

 

[MrN]

Just try to get rich. It really does not matter how. Perhaps it is trading, perhaps something else. Stop thinking about what you want to do and start experimenting. If you hit on something that works, keep doing more of it. For everything other activity, cut your loss. Trading from home is not a job the way a government job is. U need to shoot for much more than that otherwise don't bother.

 

[xandman]

Not sure what you mean. If you think Fed workers are lazy, that's simple not true. Sure a lot are, but who do you think is picking up the slack.

Don't know why you needed to be insulting. That's one of my main concern about trading full time. While working has it's con's, at the very least it makes you a little normal since you have some social activity being around other people.

Sorry, if I sound insulting. I need to shut up. I hope you find a resolutions with your trouble at work. Best of luck.

 

[lucysparabola]

Not sure what you mean. If you think Fed workers are lazy, that's simple not true. Sure a lot are, but who do you think is picking up the slack.

Don't know why you needed to be insulting. That's one of my main concern about trading full time. While working has it's con's, at the very least it makes you a little normal since you have some social activity being around other people.

he wasn't insulting you, just the notion of another "can i really hack it in trading" thread. they're an infectious disease on ET lately.

@xandman just as you cannot resist posting, I cannot resist reading.

 

[marketsurfer]

Just try to get rich. It really does not matter how. Perhaps it is trading, perhaps something else. Stop thinking about what you want to do and start experimenting. If you hit on something that works, keep doing more of it. For everything other activity, cut your loss. Trading from home is not a job the way a government job is. U need to shoot for much more than that otherwise don't bother.

No question about it. Well stated. Many of these folks get fooled thst the market is the only way to wealth. They see all this money swirling around and think its easy to grab enough to become wealthy. When the truth is, markets are the playground of the already wealthy. While its possible to make it from very little trading in the financial markets, it is very unlikely. surf