If You Had To Live on $4000, How Would You Trade It?

Classic_Cool

Newbie
9 0
Fun topic huh? :rolleyes:

So I'm a former IT guy who became enamored with stock trading back around Christmas. IT had become stagnant and unpleasant to me so I saw trading as my chance to take command of my own destiny and devote time to writing my series of fiction novels.

Unfortunately I got laid off 2 weeks ago, before I was altogether ready to put my new life plan into action. My employer was a cheap ******* who gave me 1 week as severance (part of the reason I don't like IT anymore) and I'm expecting government employment insurance to give me about $2000/month when it kicks in (not a whole lot for where I live). I've got 2800 Canadian dollars in my trading account and about negative 340 US Dollars, though that debt is starting to shrink. I can manage 3-4000 US dollars on margin and I generally risk 2%.

So I have the option to search for another job in an industry I don't much like anymore, during a local economic recession, or I can fight it out in the markets. I've chosen the latter for now but it's tough going.

I joined the Warrior Trading chat room this week and it's been informative but it's still been a really lousy week for trading. I've gotten more conservative and started sticking to 1 day swing trades as I seem to have better odds. I made $40 from that yesterday and $30ish today, with 1 swing trade each. I think I could push the average to $50-$60 based on what I'm learning but my minimum target is $160.

I like reversal trades but even those haven't been working out for me lately. They could still be my best bet though.

I know the odds aren't on my side really, and some of you are probably thinking "get a job" but if you were as stubborn as I am and determined to trade, how would you play this? Thanks.
 

tar

Legendary member
10,443 1,313
You need $100k plus account to make a living in your country ...
 

Classic_Cool

Newbie
9 0
If my risk is $80 then one fully realized (2:1) trade gets me to my goal. That's not counting the cost of failed trades of course. I know it can be done.
 

VielGeld

Experienced member
1,421 179
Get a job. Trading cannot match the security of a steady paycheck at your account size.
 

tomorton

Legendary member
8,408 1,338
Guys I know you mean well but I'm going to trade with or without your help, so lets keep the responses productive.


Your determination to succeed at trading (and avoid devoting enegy to [email protected] employers) is fine, but even a part-time admin / retail etc. job will take pressure off your trading. Your win rate and profitability should improve but more importantly, you will be less tempted to increase risk tolerance to get cash to pay the bills. Most traders have to leave trading because they lost all their money through excessive risk-taking, not because they ddn't make enough profit.
 

tomorton

Legendary member
8,408 1,338
Also, don't trade with your capital to see IF you can make money, paper trade and plan until you know you WILL make money.
 

VielGeld

Experienced member
1,421 179
Guys I know you mean well but I'm going to trade with or without your help, so lets keep the responses productive.

It's unfortunately the most productive answer. Even so, I'm Canadian as well; I get you on the **** job market right now.

But as Tomorton said, a job takes some stress off trading and keeps you going if you hit a bad spot. It doesn't even need to be full-time. You can maybe work 20h/week outside of your trading hours and that could cover some of your basic expenses. It's also something to do to keep yourself sane as you learn.

If your goal is $160/day, this means you need to make 160/4000 = 4%/day without losses. That is quite high given your lack of experience.

I respect your determination, but trading is a long-term affair with a high learning curve. Give yourself a chance with some steady income.
 

tokyojoe

Established member
874 289
CC you have been given some good advice here, I've been at this for 4 years now part time & one thing I have found is that I am very glad to have another income. I'm not sure what you need to live on per month in Canada, but Canadian $2000 to $4000 is approx £1000 to £2000 per month & would be way way too small an income to trade & live in the UK imho, even though you have an amount set aside for your trading account.

My other income is not just for back up, as one thing you will find as you go on is this game is that it is a time zapper if you allow it. I would hate to reach older age & look back & think "sh1t I just spent the last 30 years stuck in front of screens all day"....no matter how much money I have in the bank.

Stick to very strict rules if possible, it's a slow burner, I tried the get rich quick route once & was served my ass on a plate.

I really enjoy it now, mainly because I am in no hurry nor am I anxious to make big £'s everyday, why ?? because I have a back up & a life outside of the screens.

Part time work in your specialist field is my best advice to you for longevity in this game. I am a sub-contractor & I will only book myself out for 2 to 3 days per week for 6 months of the year & approx 4 to 6 days per week for 3 months, then 3 months completely free, maybe you could do similar, it suits me perfectly for this game.

Good luck with it anyway.
 
Last edited:

alexaherself

Established member
560 149
I know you mean well but I'm going to trade with or without your help, so lets keep the responses productive.

The conversation has perhaps reached something of an impasse.

You're asking for advice, on a subject of which you know little and have very little experience indeed, from a group of people all of whom have considerably more knowledge and hugely more experience than yourself, but you only really want answers that either begin with something like "Yes, you have a realistic chance to do this ..." or (if not saying that expressly) are at least based on an underlying assumption that you have a realistic chance to do this, when none of us really believes that to be so.

Do you consider reality to be "productive"?

The reality is that (a) you're trying, without significant accidents or mistakes, to make 4% per day by trading a tiny account from which none of us would hope to manage anything approaching that at all, and (b) some of the world's top professional traders, who have put in their "10,000 hours" and are earning 7-figure annual bonuses from their hedge-fund/investment-bank employers on the basis of their trading results, hope to achieve only the tiniest fraction of your stated target (they consider an average of 6% per month, doubling their account annually by compounding that average result 12 times during the year, to be "successful").

That's why it's very difficult indeed to help you, and based on my own trading knowledge and experience, I would instinctively be rejecting as unrealistic the opinion of anyone who says (or implies) "Yes, you have a realistic chance to do this".

if you were as stubborn as I am and determined to trade, how would you play this?

Badly. I'd lose most of the money through desperate overtrading without knowing what I was doing and without having or acquiring enough experience to succeed at it. Stubbornness and successful trading ability are mutually exclusive attributes.

Sorry it wasn't what you wanted to hear, and I wish you well. :eek:
 
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Big_P

Active member
100 19
CC,

I did exactly what you are considering.

In my early 20s, I worked as a broker in London earning a bloody fortune. I was successful but also burnt out at a young age, so I decided to jack in a 6-figure income and turn to trading.

My circumstances were different to yours, in that I had a huge amount in savings. I worked out that I could survive for 3 years without an income. Surely enough time to crack the trading?

So I stuck £10,000 in a trading account and off I went. (I'd like to add at this point that I already had a good foundation in the markets and had a idea of what I was doing)

The upshot?

I went through all of my savings. Ended up borrowing money from my parents. I didn't become profitable and ended up going back into my old job with my tail between my legs.

Things have worked very well for me again, but I've been lucky. Very lucky.


Please just don't do it.


By all means keep a job and trade on the side, but don't put all of your eggs in one basket.
 
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0007

Senior member
2,376 663
CC,

I did exactly what you are considering.

In my early 20s, I worked as a broker in London earning a bloody fortune. I was successful but also burnt out at a young age, so I decided to jack in a 6-figure income and turn to trading.

My circumstances were different to yours, in that I had a huge amount in savings. I worked out that I could survive for 3 years without an income. Surely enough time to crack the trading?

So I stuck £10,000 in a trading account and off I went. (I'd like to add at this point that I already had a good foundation in the markets and had a idea of what I was doing)

The upshot?

I went through all of my savings. Ended up borrowing money from my parents. I didn't become profitable and ended up going back into my old job with my tail between my legs.

Things have worked very well for me again, but I've been lucky. Very lucky.


Please just don't do it.


By all means keep a job and trade on the side, but don't put all of your eggs in one basket.


It doesn't come much more straight-talking than that! An extremely valuable input.
 

VielGeld

Experienced member
1,421 179
Well, all that said, $4k is more than plenty if you're just trading on the side. You can set yourself the goal of breaking even for the year. Just that would be good.
 
 
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