Evolution of a Trader

[D94ccm]

Greetings!

I thought I should introduce myself as I aim to be around for a while, although the markets may have better ideas!

I'm a 33 year old male currently studying an MBA and have 9 years previous experience in teaching and sports coaching. I won't bore you with how I came to be doing an MBA.

I have always been interested in trading, ever since the age of 11 when going on a trip to Disneyland in Florida and my Dad changed some pounds for dollars. I remember thinking about how you could surely exploit the difference when the exchange rate changed, alas at 11 I had little to invest.

My interest continued but my motivation to learn about anything waned as i played more and more sport, chased more women and drank more beer!

To the point where i find myself now, still very interested in trading and having been a motivated learner for the last 2 years want to see if I can pursue a career in trading from home. Why do I want to do this.

Ok, well maybe an explanation of my ideal life will give you some insight.

6am wake up
6:30am get to the gym
7:30am return from gym, turn on CNBC/Bloomberg. (I get a kick just turning these programmes on in the morning, I don't know why!)
7:35 Prepare and eat breakfast (So much nicer when you cook your own)
8:00am UK Market open
8am - 12pm Trade
12pm - 1:30pm Lunch
1:30pm - 4:30pm Trade to close
4:30pm - 5:30pm Down Time
5:30pm - 6:30pm Review and Plan for next days trading
6:30pm at leisure

Now while this may not seem an ideal to some it incorporates what I enjoy.

My daily gym routine
Cooking my own relaxed breakfast
No commute to work
Decent lunch break
Finish at 6:30pm with no commute home

Outside of the day specifics that I highlight I also like the fact that, I could work anywhere in the world, I also like the fact that if I want to take the Friday and Monday off so that I can have a long weekend, I can. If I want to travel for 6 weeks, I can.

In terms of income I don't need to earn millions! Although it would be nice. I would like to earn about £60-70,000 pa. To enjoy my lifestyle with my friends that's all I need.

On top of that when I am 50 I stand to inherit a significant number of Mortgage free assets with cash flow and I want to be able to invest this money wisely.

So here is my plan.

Finish my MBA while reading up and around the trading articles on T2W and elsewhere and create a trading plan and strategy to employ

Get a job in teaching for in order to have a consistent income. During this time I will paper trade with my strategy for 6 months to a 1 year. Towards the end of the year I will move slowly across to real money trading, if my strategy has been successful of course. The aim from here is then to slowly but surely move to a position where I earn enough money to be able to quit my teaching job.

I look forward to being involved in discussions over the up coming years!

D94

 

[bbmac]

Good Luck

 

[Brumby]

Having difficulty understanding how is the MBA connected to teaching or trading.

 

[The Artist]

Having difficulty understanding how is the MBA connected to teaching or trading.

Not only that, I certainly hope you're not paying >£20k for it, which would be an opportunity cost of the highest order.

You seem like a rather down-to-earth and structured person, plus I'm sure your competitive spirit will help you towards your goal.
But I'd like to play devil's advocate here for your own benefit and go over a few things.

First of, how much trading experience do you actually have? You mentioned being a "learner" for 2 years, what do you mean by that? If you plan on paper trading your strategy for 6 months to a year but have only began to actually trade recently then the odds of you developing an edge that quickly are quite low (or, to be accurate, quite high).
The second thing is that you need to make sure your effort is commensurate with your objective. That is, you're looking at becoming an independent, full-time trader. Regardless of the claims to the contrary made by a seemingly uncanny number of people having transformed $10000 into millions, it truthfully is a very difficult task which requires a massive amount of work, dedication, and mental strength. Relying on trading to generate your daily income creates a psychological pressure and an emotional toll which you have to be ready for. Trading part-time while teaching will not prepare you for that.
Finally, there's the question of the starting capital. If you want to earn £60k per annum (let's assume that's before tax), how much do you think you need? Let's say you start with £100k. Let's also forget about the myth of compounding since you have bills to pay, "a lifestyle with your friends" to enjoy, and want to be able to take long weekends and holidays. In year 1, if you want to do that, you'll then have to make on average £5k/month just to keep your initial equity intact for the next year and hope you strategy is still valid. 5% ROI monthly is not extraordinary, but it goes both ways. So can you handle a 5% drawdown? A 10% drawdown is £10k. Imagine it happens at the beginning on month 1. Add your monthly costs and by the start of month 2 you're down to £85k and now you need to make £20k (25%) just to get back to normal for month 3. So perhaps £100k initial capital won't cut it. Perhaps £150k is better, I don't know, just play with numbers and see what you are comfortable with but don't cheat yourself. I'm not even going to go over the likelihood of taking £60k out of the market with a £50k starting capital without having to push risk parameters to seriously dangerous levels.

I rarely address posts by kids in high school or starting college who want to start trading for a living because they usually have nothing to lose. They can just jump in, get burnt, and learn from the experience. I know did, and it's the best schooling possible.
But at 33 it's a different story. I just want to make sure you fully understand the financial, psychological, and, when both are at play in adverse scenarios, psychosomatic implications of trading for a living on your own.