a new career...

Hi all, great website, some interesting threads, and links to important/need to know information and knowledge!

Unfortunately I was made redundant from a large investment bank recently, having worked there for nearly 10 years. The positive part about this redundancy, is that I got a half decent severance payment, and what has occurred to me now, what with the job market being almost non-existent,but still a fair amount of volatility, is there ever a better time to try my hand at something I have always wanted to do.. TRADE!!

My background is working in middle offices, I have approx 9 years F&O experience, but latterly its been cash equities..

I've now set up a few trading accounts, one with IG Index, one with Barclays Stockbrokers etc.. at the moment I am deliberating what I will start off trading, either futures or cash equities, spreadbetting etc.

I am looking to start with 2k capital, as that is what I am comfortable to lose, % wise out of my severance payment.. is this a sensible amount? I've spent a lot of time watching bloomberg TV and CNBC.. and I still get sent some research articles from my old work mates.

I couldn't imagine a better job than working for yourself, and being answerable only to yourself ( and the markets of course !! )

I've looked at some of these companies that want 4k from you, to train you for 3 months,and then they MAY keep you on, but then take 2/3 rds of profits?! but why pay them, when you can train yourself, and surround yourself with wise heads, like a lot of people on this site seem to be.

Learn by yourself before entering any prop house. Open a small account, trade futures ("cheap"one, like Eurex Schatz or Bobl) and create yourself a track record.

Also, i believe that you should keep looking for a normal(=non risky) job. You probably need the steady income, and trading WILL NOT give it to you without experience. In this early phase, you should consider trading as a costly hobby.

I wish you all the best,

Alex

Thx Alex , I'll definitely keep looking, as in obviously helps to have a steady course of income, but this is my plan B.. if there are no jobs out there in a couple of months, I will commit some capital, and see where I go from there. I have opened a couple of trading dummy accounts, and tomorrow I will build my view of the market, and continue to trade on the dummy account for the rest of the week. I called the FTSE down this morning, I thought at least by 2% - ok fairly easy when so much bad news is around.. and before I knew it, thats where the market was?!

Spread Betting vs Level 2 Direct Access..

I am going to start trading from home full time.. as per my above thread, no previous experience in trading per se, but I have a fairly good knowledge having worked within the industry for over 10 years.

Scenario is.. I have £5000 at this moment in time, I am willing to put in to start up.

Spread betting - obviously locked in vs the companies spreads, whilst Direct Access will offer better access, and access to liquidity, and px dissemination.

I'm considering taking the Alan Rich course on day/swing trading.

I am attempting to draw myself up a business plan, that covers everything from employment status, NI contributions, Ltd company? accountancy etc.. a lot of which I understand a lot better now, because of threads on this site.

I need some help if possible, around working out daily profit targets, weekly,monthly targets. I am looking to make!!!!! £3-5000 a week from my trading to start off with.

Can anyone recommend a good direct access company that will allow me to start off with say £4000 in my account. In terms of say margin - what would these companies require if I swing trade? or if say I want to do approx 10 trades a day - day trading ?

All good positive moves. Business plan, yes. Trading Books, yes. Get Psychology books too. Not uni stuff, but PMA stuff. Trading Athlete is a must.
Good luck, I admire the way you are approaching this

PS. plan everything EXCEPT, how much you intend to make every day or every month. Thats for later. Trading is not like sales, it comes in waves, so give your self some time to learn before you try hitting profit targets (as it may discourage you).

Thx, I will order that book now. I'm in touch with a couple of people, I am leaning different ways at the moment in terms of products I want to trade.

Indices - like the idea of the movement/volatility
US equities - liquidity/price swings
Commodities - mid/long term, the focus will be in this area I believe.. clients are being told to move their money into places like gold etc.

Thank you for your feedback, I really appreciate it.

With all respect, but is it not too risky to start trading full time with ONLY 5000 pounds? That is roughly 5500 EUR at the moment (thanks to crappy exchange rate). I am not sure how much money you need a month, but that would demand a consistent 20% to 30% return per month. That sounds extremely risky.

I have some ideas to switching to trading too, pretty soon, but then I have a company on the side (which, while not covering all my costs when I do not work for it, still leaves me only about 500 EUR under water after all expenses) and I plan to get into that with around 25.000 EUR to start with. Which means I would be ok with 2% per month (and I also plan working more as contractor, to bring that account up to 50.000 EUR fast.

With only 5500 EUR I would doubt you will have a big chance to make a living. Would be too risky to me.

That said - what else do you have in reserve? Unemployment pay? How much money do you actually NEED, and can you cover monts drawdown in the start?

With this kind of money I think your only option is spread betting unfortunately.

arabianights said:

With this kind of money I think your only option is spread betting unfortunately.

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Thx Arabian - I feel spread betting may be the way to go, to begin with. If I can hit a certain p&l after six months, then I'll look into level 2. I've quoted returns of a certain amount per week per month...but I am learning more about myself each day. I have spread betted today, only very small money, ie paying £2.5 per point, 20pt stop loss- on wall street cash, with IG index

I traded off of figures, ie the house figures, and the initial market move. I ended up making £75 - all good. But then I got greedy, and thought I'd make myself a little bit more, and thought that the index would creep up a bit more, it didn't and I got stopped out within 5 minutes!

I feel like I am making some good decisions - some may say its not rocket science what I am doing, ie trading off of news, but I have made money on a few trades, based on my quick interpretation.

newward said:

Thx Arabian - I feel spread betting may be the way to go, to begin with. If I can hit a certain p&l after six months, then I'll look into level 2. I've quoted returns of a certain amount per week per month...but I am learning more about myself each day. I have spread betted today, only very small money, ie paying £2.5 per point, 20pt stop loss- on wall street cash, with IG index

I traded off of figures, ie the house figures, and the initial market move. I ended up making £75 - all good. But then I got greedy, and thought I'd make myself a little bit more, and thought that the index would creep up a bit more, it didn't and I got stopped out within 5 minutes!

I feel like I am making some good decisions - some may say its not rocket science what I am doing, ie trading off of news, but I have made money on a few trades, based on my quick interpretation.

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two and a half of our great British pounds per point is not "small money" to start, 100 pips gain per day could get you off to a great start. Good luck, be interested to see how you develop.

What about scalping?

Don't I need level2 or direct access, and more trading experience to do that? At the moment, I don't have much patience - something I am trying to develop..but I guess I am doing a form of scalping, by taking small profits here and there..

My starting capital at that time was INR 45000 or around $1000 at that point of time 9 years ago. I am pretty sure now that atleast $50000 is okayish to start the business if one were to trade cold bloodedly. Any one trading below that amount i salute that person for handling the stress as i feel we develop tendency to be "right" on everytrade which wreaks havoc on ones mind & i can tell you from my experience its no good. I started without backtests , strategies & i was blown up 3 times when i traded that low amounts.

To newward, I believe you have fantastic background and right moment for starting trading.
Not sure, if it's necessary to train in such expensive companies - there are a lot of information in the internet, video courses and books. Of courser education takes its time, but it's worth it.
Good luck with trading and don't be risky.