I'm 36 and well established. Is switch to trading career realistic?

[AlwaysANoob]

I'm 36 and well established. Is a switch to a trading career realistic?

[EDIT: Please note - all dollar values mentioned in this original post are *U.S.* dollar values, not U.K.]

Hi! This is my first post at Trade2Win. I apologize for the length, but I am in need of a lot of advice - and feel that some background is needed on who I am and what drives me.

I'm 35 years old. I'm very hungry to learn and achieve. Anything and everything trading-related and finance-related excites me, but I have never traded "for real" before. I *have* worked in the trading industry as a (successful) I.T. (Information Technology) professional for several trading firms in the Chicago area. I also play an on-line game called 'Eve' which has complex, extensive player-driven markets with tens of thousands of items that get bought and sold in volume every day. (The game comes with extensive market history and analysis tools.) Every time I have entered the markets in this game, I have A) been passionate about it - loved it - couldn't get enough, and B) Done extremely well.

I love math and I *drool* for probability. I excel at it, and can crunch numbers in my head like no-one's business. I love the notion of being a market-maker - having the best bid and ask on an item and pocketing the difference. And I can explain to my 63-year-old mother-in-law with a passion in my eyes exactly what a market maker is and how they make (and lose) money. I can stare at charts all day if I think there's money to be made. I can talk trading 24/7 if I had the right folks around me. (I may not know all the jargon, but I get a lot of the concepts.)

Anecdote -

When I was in high-school, I turned $5.00 into over $20,000.00 by selling gum and candy to my classmates. I'd buy wholesale - sell retail. Markup was anywhere from 7% to 5,000% depending on item and time of year. One day someone tried to become my competition - he started undercutting my prices and offering buy-2-get-1-free deals. I baited him into a bidding war, constantly lowering our sale prices, until he got caught by his ego. He so desperately wanted to beat me that he ended up offering all his candy for very close to my cost in the main hall of the school. I paid a friend $2.00 to walk over with a fifty I handed him and buy out all of his merchandise. Poof - competitor has no inventory, makes no money (he sold at a loss), and my competition is gone. I immediately then jacked up my sale prices to their original mark. One day my dad went to open the fridge to get a beer. 20+ bags of candy and gum fell onto him. As he came into my bedroom to ask me about it, he saw me (his 14-year-old son) counting a stack of $10's and $20's thicker than the geometry book next to them. He immediately started charging me rent for fridge space. I learned, first-hand (in a high-school sort of way), about supply and demand, overhead, money management, competition, buy-outs, and the dangers of eating (literally!) into one's own profits. I also always wondered to myself - "If I bought this candy bar for $0.17, and could have sold it for $0.50, but ate it instead, am I losing $0.17, $0.33, or $0.50?". Later on in life I learned it's "a real loss vs. an opportunity loss."

In all, I am willing to work - to bust my hump. I am eager to learn. I absorb like a sponge. I will grind it out in the beginning if I have to. I can have the patience. I took an Intro to Options class that was required for all employees at one trading company I worked for - I loved it! I loved the material and did quite well with it.

Here's the catch that I need help with.

Right now, I currently earn $100k per year doing I.T. consulting at 20 hours a week. At any point, I could immediately increase my (pre-tax) income to $200k/year by taking on 40 hours total of work per week - the business is there if I want it.

However, I am taking time off to re-examine myself and determine my purpose / mission on this planet, and the direction I want my life to go in. I am wondering if it is trading.

I really enjoy the I.T. work. I'm very good at it. But I'm not *passionate* about it. It's on an 8 out of 10 scale for enjoyment. If I *had* to do it the rest of my life, I would not be that upset. I can reliably find work, and I can dictate my own time off. With effort, I could probably increase my earning power to $250k / year in I.T. But that would be the max for quite awhile.

My wife earns roughly $110k per year, but is disenchanted with her work. Our mortgage + daycare alone is $4,600 per month. While she won't be quitting soon, she's not thrilled about the prospect of having to work for another 5-10 years.

My wife has always pointed out that I have a passion for the markets and thinks I have what it takes ability-wise and fortitude-wise to be a successful trader.

I understand trading's not a get-rich-quick path. I know there's a lot of learning and loads of hard work, and even then results are not guaranteed. I know there's the proverbial 90% failure club.

But I am wondering, given my traits, abilities, passion, and *hunger to be excellent at it*, if I stand a chance of being very successful within a few years. I have read that it's a bad idea to focus on the money, especially on a quick time frame; instead, one should focus on becoming as good of a trader as they can be. I am indeed willing to focus 110% on developing my skills. I can live/breathe/sleep it - no sweat.

However, I'm not 20. I'm not even 30. I'm about to turn 36 with a growing family. Even if my wife quit, I could, at the snap of a finger, bring our total household income to $200k/year pre-tax, from I.T. work.

I am going to be brutally honest with myself here. If I were to get into trading such that it consumed all of my professional work hours, and some of my personal time (learning and discussing it), I would be extremely disappointed if I worked and learned my tail off, and in 3-5 years, wasn't above the $200-$250k / year mark. So given all of this, I think I have my list of questions ready:

- If I decide my heart's in trading, should I seek employment with a previous trading company that's familiar with me, knows I'm very bright and motivated, and is also willing to offer lots of training? I just don't think I'd be comfortable (or safe), as new as I am, trading from home to start.

- Let's assume I have the necessary talent, instincts, drive, and discipline. Is $200k (or significantly more) per year *reasonably likely* in three to five years? (Let's assume we're talking trading as an employee of a private trading firm with a good amount of capital.)

- Do the rewards for trading on a private company's capital usually scale with performance? IE, do rock star results get rock star compensation? In a theoretical scenario, if I'm out-performing 4 guys sitting next to me by 40%, I would expect to be compensated 40% higher than they. (The reverse is true - if I underperform, I expect to be compensated less.)

- If a new trader does very, very well for a company - generally how long does it take for the stigma of being "new" to wear off in terms of compensation and bonuses?

- If I find a good firm and love the work, and do very well at it, is it reasonable to make one of my personal goals: "Perform well enough to be granted an ownership stake in the company." ?

- Besides diving into this forum, what are some good action items to determine if trading is the direction my life should take? I'm thinking about finding some old acquaintances who are traders and taking them out to dinner to pick their brains.

Any and all advice is much appreciated. The more details you can offer, the better. If five years is too much of a hurry no matter my willingness to learn and work, please be honest about it. Like I said, I'll try hard to focus on being a good trader and not on the money, but I already make a good chunk of money. I'll be giving up a lot in terms of annual income to make the switch, and if I'm successful, I know it won't be overnight.

Thanks, and feel free to flame me if you think I need it!!!

 

[shadowninja]

I haven't read it all; I don't think many will. Fact is, it could take 2 years or more before you break even so you could be losing pretty much every time you trade for the next 2 years with your balance zigzagging downwards with no end in sight. If you play it right, it might only cost £100. If you let the devil take thee, it might cost you your house and even your family as they decide you're a degen and leave you. Do you find trading on Eve a thrill or a tediously boring activity but continue because it makes money? If you love the thrill of it, trading may not be for you as you may have a gambling problem yet to surface.

Also, expect your salary to be anything between £0 and £10,000 if you do make the 3 years. If you are earning £150k in 3 years' time from trading and don't lose £500k the following year, I will be impressed. Also, it's entirely possible to make £50k in the 3rd year, lose £75k in Year 4, then make £25k in Year 5.

Some things to consider...

 

[Masquerade]

You have too much to lose and not enough to gain. Maybe you can take sabbatical and try get into a trading company as it's better than wondering "what if?"

Should you quit your job and invest a ton of your money to learn the markets? Probably not a great idea. You'll need to take big risks with your own capital to make the sort of money you're talking about and it doesn't sound like it's the right time and maybe it's not right for you (as well as a lot of people) psychologically. Saying all that, it's not as if you can't do some longer term investment stuff on the side whilst still working.

 

[counter_violent]

Re: I'm 36 and well established. Is a switch to a trading career realistic?

Hi! This is my first post at Trade2Win. I apologize for the length, but I am in need of a lot of advice - and feel that some background is needed on who I am and what drives me.

I'm 35 years old. I'm very hungry to learn and achieve. Anything and everything trading-related and finance-related excites me, but I have never traded "for real" before. I *have* worked in the trading industry as a (successful) I.T. (Information Technology) professional for several trading firms in the Chicago area. I also play an on-line game called 'Eve' which has complex, extensive player-driven markets with tens of thousands of items that get bought and sold in volume every day. (The game comes with extensive market history and analysis tools.) Every time I have entered the markets in this game, I have A) been passionate about it - loved it - couldn't get enough, and B) Done extremely well.

I love math and I *drool* for probability. I excel at it, and can crunch numbers in my head like no-one's business. I love the notion of being a market-maker - having the best bid and ask on an item and pocketing the difference. And I can explain to my 63-year-old mother-in-law with a passion in my eyes exactly what a market maker is and how they make (and lose) money. I can stare at charts all day if I think there's money to be made. I can talk trading 24/7 if I had the right folks around me. (I may not know all the jargon, but I get a lot of the concepts.)

Anecdote -

When I was in high-school, I turned $5.00 into over $20,000.00 by selling gum and candy to my classmates. I'd buy wholesale - sell retail. Markup was anywhere from 7% to 5,000% depending on item and time of year. One day someone tried to become my competition - he started undercutting my prices and offering buy-2-get-1-free deals. I baited him into a bidding war, constantly lowering our sale prices, until he got caught by his ego. He so desperately wanted to beat me that he ended up offering all his candy for very close to my cost in the main hall of the school. I paid a friend $2.00 to walk over with a fifty I handed him and buy out all of his merchandise. Poof - competitor has no inventory, makes no money (he sold at a loss), and my competition is gone. I immediately then jacked up my sale prices to their original mark. One day my dad went to open the fridge to get a beer. 20+ bags of candy and gum fell onto him. As he came into my bedroom to ask me about it, he saw me (his 14-year-old son) counting a stack of $10's and $20's thicker than the geometry book next to them. He immediately started charging me rent for fridge space. I learned, first-hand (in a high-school sort of way), about supply and demand, overhead, money management, competition, buy-outs, and the dangers of eating (literally!) into one's own profits. I also always wondered to myself - "If I bought this candy bar for $0.17, and could have sold it for $0.50, but ate it instead, am I losing $0.17, $0.33, or $0.50?". Later on in life I learned it's "a real loss vs. an opportunity loss."

In all, I am willing to work - to bust my hump. I am eager to learn. I absorb like a sponge. I will grind it out in the beginning if I have to. I can have the patience. I took an Intro to Options class that was required for all employees at one trading company I worked for - I loved it! I loved the material and did quite well with it.

Here's the catch that I need help with.

Right now, I currently earn $100k per year doing I.T. consulting at 20 hours a week. At any point, I could immediately increase my (pre-tax) income to $200k/year by taking on 40 hours total of work per week - the business is there if I want it.

However, I am taking time off to re-examine myself and determine my purpose / mission on this planet, and the direction I want my life to go in. I am wondering if it is trading.

I really enjoy the I.T. work. I'm very good at it. But I'm not *passionate* about it. It's on an 8 out of 10 scale for enjoyment. If I *had* to do it the rest of my life, I would not be that upset. I can reliably find work, and I can dictate my own time off. With effort, I could probably increase my earning power to $250k / year in I.T. But that would be the max for quite awhile.

My wife earns roughly $110k per year, but is disenchanted with her work. Our mortgage + daycare alone is $4,600 per month. While she won't be quitting soon, she's not thrilled about the prospect of having to work for another 5-10 years.

My wife has always pointed out that I have a passion for the markets and thinks I have what it takes ability-wise and fortitude-wise to be a successful trader.

I understand trading's not a get-rich-quick path. I know there's a lot of learning and loads of hard work, and even then results are not guaranteed. I know there's the proverbial 90% failure club.

But I am wondering, given my traits, abilities, passion, and *hunger to be excellent at it*, if I stand a chance of being very successful within a few years. I have read that it's a bad idea to focus on the money, especially on a quick time frame; instead, one should focus on becoming as good of a trader as they can be. I am indeed willing to focus 110% on developing my skills. I can live/breathe/sleep it - no sweat.

However, I'm not 20. I'm not even 30. I'm about to turn 36 with a growing family. Even if my wife quit, I could, at the snap of a finger, bring our total household income to $200k/year pre-tax, from I.T. work.

I am going to be brutally honest with myself here. If I were to get into trading such that it consumed all of my professional work hours, and some of my personal time (learning and discussing it), I would be extremely disappointed if I worked and learned my tail off, and in 3-5 years, wasn't above the $200-$250k / year mark. So given all of this, I think I have my list of questions ready:

- If I decide my heart's in trading, should I seek employment with a previous trading company that's familiar with me, knows I'm very bright and motivated, and is also willing to offer lots of training? I just don't think I'd be comfortable (or safe), as new as I am, trading from home to start.

- Let's assume I have the necessary talent, instincts, drive, and discipline. Is $200k (or significantly more) per year *reasonably likely* in three to five years? (Let's assume we're talking trading as an employee of a private trading firm with a good amount of capital.)

- Do the rewards for trading on a private company's capital usually scale with performance? IE, do rock star results get rock star compensation? In a theoretical scenario, if I'm out-performing 4 guys sitting next to me by 40%, I would expect to be compensated 40% higher than they. (The reverse is true - if I underperform, I expect to be compensated less.)

- If a new trader does very, very well for a company - generally how long does it take for the stigma of being "new" to wear off in terms of compensation and bonuses?

- If I find a good firm and love the work, and do very well at it, is it reasonable to make one of my personal goals: "Perform well enough to be granted an ownership stake in the company." ?

- Besides diving into this forum, what are some good action items to determine if trading is the direction my life should take? I'm thinking about finding some old acquaintances who are traders and taking them out to dinner to pick their brains.

Any and all advice is much appreciated. The more details you can offer, the better. If five years is too much of a hurry no matter my willingness to learn and work, please be honest about it. Like I said, I'll try hard to focus on being a good trader and not on the money, but I already make a good chunk of money. I'll be giving up a lot in terms of annual income to make the switch, and if I'm successful, I know it won't be overnight.

Thanks, and feel free to flame me if you think I need it!!!

I think you need to slow this whole thing down. You seem to be going all over the place here.

Why not take up trading as a hobby in the first instance.... thus maintaining some kind of balance until such time as you can make an objective and informed decision based on 12 months of good/bad results.

Keep positions small relative to funds in account and test the waters. Time frame is very important...the longer the time frame the less stress and the easier to manage. The big mistake is to assume that shorter time frame trading equates to more opportunities blah blah. Well this for most people is a crock. In reality it will mean more losses in a quicker period of time.

 

[sinimini]

Perhaps you should read this. Dont waste your life on EVE either, its imaginary.

http://www.trade2win.com/boards/trading-home/2862-33k-loss-after-1-year.html

 

[AlwaysANoob]

I haven't read it all; I don't think many will. Fact is, it could take 2 years or more before you break even so you could be losing pretty much every time you trade for the next 2 years with your balance zigzagging downwards with no end in sight. If you play it right, it might only cost £100. If you let the devil take thee, it might cost you your house and even your family as they decide you're a degen and leave you. Do you find trading on Eve a thrill or a tediously boring activity but continue because it makes money? If you love the thrill of it, trading may not be for you as you may have a gambling problem yet to surface.

Also, expect your salary to be anything between £0 and £10,000 if you do make the 3 years. If you are earning £150k in 3 years' time from trading and don't lose £500k the following year, I will be impressed. Also, it's entirely possible to make £50k in the 3rd year, lose £75k in Year 4, then make £25k in Year 5.

Some things to consider...

Your thoughts are appreciated. I'm fairly certain I don't have any unsurfaced gambling issues - as I hate situations where I'm playing without an edge. I refuse to shoot craps, play blackjack, or any "house game". I really enjoy playing the markets in Eve as it feels gratifying, even if it's not real money, to understand the supply and demand of the product I'm trading, along with its trends, and be making money when both my buy and sell orders hit. (IE, I really enjoy being a market maker on the products I trade.) After awhile it can get tedious, and I stop, because it's not producing REAL money and there's other areas of my life I get more value from.

I do not plan on risking a large portion of my assets on trading. I won't even come CLOSE to putting the house at risk. This is why I'm wondering if going down the trade-for-a-private-firm might be a better route?

 

[AlwaysANoob]

Re: I'm 36 and well established. Is a switch to a trading career realistic?

I think you need to slow this whole thing down. You seem to be going all over the place here.

Why not take up trading as a hobby in the first instance.... thus maintaining some kind of balance until such time as you can make an objective and informed decision based on 12 months of good/bad results.

Keep positions small relative to funds in account and test the waters. Time frame is very important...the longer the time frame the less stress and the easier to manage. The big mistake is to assume that shorter time frame trading equates to more opportunities blah blah. Well this for most people is a crock. In reality it will mean more losses in a quicker period of time.

Can you describe the rough difference between a hobbyist vs. career trader in terms of general approach to trading, how often they place and execute trades, etc? I guess I was under the impression that to really get good at trading, or at least SEE if I could get good, I'd want to invest 100% of my energy into it... ?

 

[AlwaysANoob]

Perhaps you should read this. Dont waste your life on EVE either, its imaginary.

http://www.trade2win.com/boards/trading-home/2862-33k-loss-after-1-year.html

I consider doing the markets in Eve a couple hours a week a very valuable learning tool. The in-game money is hard to come by, so there is in fact a legitimate sense of "loss" and "gain." I couldn't possibly consider it wasted time. And yes, I get that Eve is imaginary. I don't spend a lot of time on it. It's a learning tool by using the markets, and a stress relief / form of entertainment when exploring other aspects of the game. One could easily say, "Don't waste time watching television - it's imaginary.", or "Don't waste time reading fiction - it's imaginary." or "Don't waste time playing Monopoly - it's not real money." Everything has it's time, place, and value, including a basic learning tool.

EDIT: Also, thank you for the link. I read it. I may not be an experienced trader, but the guy in that article sounds like a complete moron; a disaster waiting to happen. I have no intention of behaving as he did or putting my family / financial stability in jeopardy. "At one point, he had about £25,000 invested - almost half his entire portfolio. " ... uh, hello? That's begging the market to bend you over and destroy you. The First Steps stickies here emphasize the need to come up with a strategy / plan, back test it, then paper trade it, then trade it for real, carefully, and STICK TO THE PLAN. It doesn't sound like this guy had a plan to control risk. It sounds, quite frankly, that he was *hoping* to make money. Seems like trading on hope just gets you clobbered.

Again, I must emphasize, if I do switch and go the trading route, I'm giving thought to becoming an employee and trading on a firm's capital. I'm just not sure what I can reasonably expect to make the first few years.

Thanks for the post!

 

[counter_violent]

Re: I'm 36 and well established. Is a switch to a trading career realistic?

Can you describe the rough difference between a hobbyist vs. career trader in terms of general approach to trading, how often they place and execute trades, etc? I guess I was under the impression that to really get good at trading, or at least SEE if I could get good, I'd want to invest 100% of my energy into it... ?

Ok well a hobbyist has the luxury of not having to perform day in day out whereas a professional career trader will only be as good as his last set of trading results. Non performers will be shown the door very quickly. So in this sense and given what you and your family already have going ....it would be a great deal to lose....simply to take the chance in the first instance.

I'm sure you don't need to rush into all this...stick around and ask lots of Q before making any hasty decisions.

Try and speak to members like arabianights and martinghoul for a pro perspective. Hopefully they can tell you like it is !

 

[AlwaysANoob]

Re: I'm 36 and well established. Is a switch to a trading career realistic?

Ok well a hobbyist has the luxury of not having to perform day in day out whereas a professional career trader will only be as good as his last set of trading results. Non performers will be shown the door very quickly. So in this sense and given what you and your family already have going ....it would be a great deal to lose....simply to take the chance in the first instance.

I'm sure you don't need to rush into all this...stick around and ask lots of Q before making any hasty decisions.

Try and speak to members like arabianights and martinghoul for a pro perspective. Hopefully they can tell you like it is !

Thanks - I really appreciate that reply. I didn't mean to sound as hasty as I did in my post. I'm not in a hurry. I'm just very enthusiastic and curious. I will indeed hang around a lot and ask lots of questions. In all honesty, I wouldn't even know where to begin. (But I'm working my way through the where-to-start stickies.) I also plan to look up old co-workers / traders that i got to know while I was a techie, and ask them frank questions. I have a hunch I'll get frank replies.

Thanks again!!

 

[shadowninja]

I do not plan on risking a large portion of my assets on trading. I won't even come CLOSE to putting the house at risk.

It's not planned - the devil takes thee and before you know it, you're in a very big hole. Leverage is a wonderful thing when used wisely. In any case, start small and expect failure. Be very suspicious of any successes.

 

[DashRiprock]

hi mate

i would say why can't you do both?

leaving your job with a wife and kids is a bit stupid I think. But you are in chicago right? If your an IT consultant you should get a bit of flexibility in your hours? so you can trade the first few hours of the t note session cos it starts at 7:20 your time.

so you can trade from 6:45 to 10:30 and then go and do your normal job. 20hrs a week gives you alot of spare time.

as well you might be able to make friends with some other traders? explain what you are doing with your own money and buy the beer and maybe they will give you nice hints.

thats what I would do, just open an account with an FCM and trade for yourself for a few hours. there is great misconception that you can only make money of you are trading 10 hrs a day. if you have the make up for it, trading well for 3 hours can make you mega rich.

(ps this is what i do except im in uk)

but don't leave your wife and kids without secure income!


Oh and you should as well have a good talk with your wife, because she will have to be in it with you.

 

[pboyles]

I'm just not sure what I can reasonably expect to make the first few years.

A reasonable expectation is that you'll make nothing, in fact you may lose a great deal of money not to mention lost earnings etc. If you can pull in 200k working 9 to 5 I don't understand why you'd even consider giving it up to get involved in trading. It may appear attractive now but when you still havnt made a penny after 1 or 2 years and youre watching your savings steadily disappear it wont seem such a good idea.

 

[donaldduke]

Ideally you will have a trading plan already in place before you leave your IT career, the plan should detail and prove that it is realistic to expect to make whatever money you want to make, otherwise it isn't going to happen. It is just wishing and hoping that something will turn up.

Over the next five years you could make 1 million dollars as an IT consultant, as a trader starting out you are unlikely to make anything like that in the first five years. It could happen, you could get lucky or perhaps you are a born trading genius.. but the odds of that are tiny.

The pressure on you will be intense. It will always be nagging at you, how much opportunity loss you making. In many ways you will be at a psychological disadvantage to someone who is coming to trading from a low paid job or straight out of college.

Give trading a go, but expect to fail and have to return to IT within six months. And expect to keep doing that until you either give up or eventually develop a way/plan to make big money from trading.

 

[HowardCohodas]

There are few pleasures in life greater than being able to support your family doing what you love. If you don't love it, it is harder to do it well.

The real dilemma is transitioning from here to there. Trading for a living vs. trading as a hobby has, in my view, at least two dimensions. The psychological demands and the time demands. Without doing it with real money, preferably small money, you will not have tested your psychological metal to know if it can stand up to the demands of trading being your living. This is not a complete stress test, but an important first step.

Once you have narrowed the area of trading you are interested in, you will need to select a strategy. Many strategies can be traded with different levels of time commitment. E.G. twice a month decisions, twice a day decisions, once every two hours decisions and continuous decisions. Each level of commitment can provide you with greater return, and will likely expose you to greater risk. The advantage of such a strategy is that it lets you increase your time commitment without learning a new strategy.

A trading system is made up of two key components; the strategy and the trader. A successful strategy traded by an undisciplined trader will still lose money.

Good luck on your adventure.

 

[AlwaysANoob]

hi mate

i would say why can't you do both?

leaving your job with a wife and kids is a bit stupid I think. But you are in chicago right? If your an IT consultant you should get a bit of flexibility in your hours? so you can trade the first few hours of the t note session cos it starts at 7:20 your time.

so you can trade from 6:45 to 10:30 and then go and do your normal job. 20hrs a week gives you alot of spare time.

as well you might be able to make friends with some other traders? explain what you are doing with your own money and buy the beer and maybe they will give you nice hints.

thats what I would do, just open an account with an FCM and trade for yourself for a few hours. there is great misconception that you can only make money of you are trading 10 hrs a day. if you have the make up for it, trading well for 3 hours can make you mega rich.

(ps this is what i do except im in uk)

but don't leave your wife and kids without secure income!


Oh and you should as well have a good talk with your wife, because she will have to be in it with you.

Outstanding advice - thanks! I have chatted with my wife extensively, and she is 100% behind me whatever I choose to do. The only thing she made me agree to is that, if any endeavor doesn't pan out, that as a last resort I be willing to bite the bullet and go to work as a full-time employee for someone else to provide financial security until I can get something else going.

I was indeed under the misconception that I needed to trade full market hours to do well. As I get my feet wet and start learning, I will investigate the route you suggest. 7:20 to 10:30 am sounds perfect for me. You're right - I could indeed go to the consulting work afterwords.

After all - they say when in life you come upon a fork in the road... pick it up.

Thanks again for the advice - it just might send me on my way!

 

[AlwaysANoob]

It's not planned - the devil takes thee and before you know it, you're in a very big hole. Leverage is a wonderful thing when used wisely. In any case, start small and expect failure. Be very suspicious of any successes.

When you say "leverage", is this basically a type of trade where the amount you stand to lose or gain is significantly more (like, 10 to 100 times more) than the actual amount of funds you have to put up?

I like the idea of each trade consisting of a very small fraction of my capital, and the amount of funds I put up for the trade represents the maximum amount I can lose. I want to play for the notion of long-term expected value - lots of trades - some winners, some losers, but the winners add up to more than the losers in the long run. I don't want to hit the ball out of the park - I don't (and hopefully won't) be lured to hit a grand slam by putting 5-10% of my capital at risk on a trade I'm confident will go in my favor.

When the devil gets you, is in the form of "Whoa look - I made a successful trade. I have cash. Whoa - look - I made a bigger successful trade - I must know what I'm doing. " And then you slowly put up more and more at risk - kind of like a gambling problem? If I do go into a trading career, I want to be honest with myself and alert to all of the warning signs before I'm in hot water.

Thanks for any thoughts!

 

[AlwaysANoob]

Ideally you will have a trading plan already in place before you leave your IT career, the plan should detail and prove that it is realistic to expect to make whatever money you want to make, otherwise it isn't going to happen. It is just wishing and hoping that something will turn up.

Over the next five years you could make 1 million dollars as an IT consultant, as a trader starting out you are unlikely to make anything like that in the first five years. It could happen, you could get lucky or perhaps you are a born trading genius.. but the odds of that are tiny.

The pressure on you will be intense. It will always be nagging at you, how much opportunity loss you making. In many ways you will be at a psychological disadvantage to someone who is coming to trading from a low paid job or straight out of college.

Give trading a go, but expect to fail and have to return to IT within six months. And expect to keep doing that until you either give up or eventually develop a way/plan to make big money from trading.

That's one of the concerns I read about in the First Steps stickies - if you start out focusing on the money, you can be at a huge psychological disadvantage. I think I can work past that so long as my wife continues to work. I think expecting to fail is probably good advice.

Would it be worthwhile talking to successful traders and asking why they feel that they are successful but others are not? The ones I have in mind are actually very friendly and open about what they do. Seems like I could gleam some useful insight.

I think I've got one thing going for me above all else in this. While yes it does seem like the money is the primary goal, it's actually not. **I love to excel at things.** The more complex, the better. The more there is to learn, the more I eat it up. I'm motivated by accomplishment and combining work + brains + preparedness to produce success + profit. I've failed before in life in certain areas, so I think I can check my ego at the door and decide, in time, that "I'm just not cut out for this." if I am, in fact, not good at trading.

I'll review the posts on "what makes a good trader."

Thanks again for your thoughts.

 

[AlwaysANoob]

There are few pleasures in life greater than being able to support your family doing what you love. If you don't love it, it is harder to do it well.

The real dilemma is transitioning from here to there. Trading for a living vs. trading as a hobby has, in my view, at least two dimensions. The psychological demands and the time demands. Without doing it with real money, preferably small money, you will not have tested your psychological metal to know if it can stand up to the demands of trading being your living. This is not a complete stress test, but an important first step.

Once you have narrowed the area of trading you are interested in, you will need to select a strategy. Many strategies can be traded with different levels of time commitment. E.G. twice a month decisions, twice a day decisions, once every two hours decisions and continuous decisions. Each level of commitment can provide you with greater return, and will likely expose you to greater risk. The advantage of such a strategy is that it lets you increase your time commitment without learning a new strategy.

A trading system is made up of two key components; the strategy and the trader. A successful strategy traded by an undisciplined trader will still lose money.

Good luck on your adventure.

Thanks! This post, along with 1-2 others, has really got me more hopeful that I may be able to start part-time with small amounts of capital. But first, I need to learn thoroughly about all of the items that GET traded, when they're traded, and come up with a strategy.

I'll let you know how it goes.

 

[Liquid validity]

To OP.

I Would stay in the job for now, do not even consider quitting yet.
You have nothing to quit for yet.
You are U.S. based, so trade the Asian session with loose change after work until you get a feel for the process, just to dip a toe in really.

Read some books, do some research, then read some more and research more.
This site is a good place to start for research and books:
http://www.trade2win.com/boards/trading-faq/30637-books-should-beginner-read.html

Also have a read of this:
http://www.trade2win.com/section/articles/764-interview-stock-trader-richard-joyson-mr-charts/p/1

That lot will keep you busy for a while, answering a lot of questions whilst posing new ones.
Good luck