Trading for a Living?

[Sharky]

One for all you full time traders...

This evening, I had the great pleasure of speaking with our newest BB member, hayesharry. And he posed the question to me, "Is it possible to earn a living from full time trading?".

Now, not being a full time trader myself, I'm in need of some assistance.

I recently opened a US direct access trading account myself, and hope to find the time in the evenings to trade the market close. But I certainly believe that you can make a good living on the markets, now more so than ever before.

The internet has opened up the markets like never before. We now have at our disposal a wealth of documented knowledge, historical and real-time data, and most of all the ability to communicate directly with other traders. And I like to think in our own small way, Trade2Win is able to contribute to this.

I can know execute a trade in a split second and see the same level 2 information available to every other Wall Street/City trader. This is indeed an exciting time to be trading.

But perhaps the real traders amongst us, can share their own experiences of giving up the day job and earning a living from full time trading.

Cheers,
Pigsy.

 

[Riz]

Hi Pigsy,

And welcome our new member, Harry...trading shares for a living? Well I think this is a tough job, but can't say it's impossible as I know people who are doing it...I myself am doing it at the moment, but have to say it wasn't because I gave up my job or business to trade shares..I recently sold my business and therefore am now able to spend more time on trading shares..not bad so far..but I wouldn't sell my business or give up my job just to trade shares unless I have traded for years and proved myself successful.. I understand the opportunities the internet provides, but still I think one needs years of experience and spesific skills and a touch to base one's living on share trading..of course those who are already in such a position also already know if they can do it..but those who haven't got enough experience and therefore still need to prove their skills and successfulnes had better stick to their job or business and trade shares on the side till they are convinced they can do it..even then I don't think it's right to base all hopes on share trading..I think one should always have other income sources handy: a job, a business, an investment, etc. Because when it comes to share trading noone can ever know for sure...

cheers

rizgar

 

[MX]

I hope it is Harry its what I’m trying to do!

I think, as with any other job you have to take some serious training. Trading is a very demanding occupation I can think of quite a few jobs where your wages can vary from a low wage to a good wage in a day. But not many jobs when after working hard for 9hrs you are 2 grand worse off you will have to accept this some days.
So first you need to be financially stable it’s no good trading with next months mortgage. You need to train yourself by reading, watching the markets, talking to other traders, paper trading, etc, etc,
You need a proper strategy its not good enough to read the Sunday Times and trade all the tips you find.
I have been trading for a year now and would compare it to taking a degree the amount I have had to learn. And still learning!
Next you have to have the right Psychology the market eats gamblers for breakfast.
You need sound money management, is no good betting the farm on a tip you get off a web site.
You need to protect your capital using stops, spreading your risks, limiting your trading size Its no good making 6k one week to lose 8k the next.
Money is the traders most important tool without money you are not a trader.

But if you do learn to trade for a living you will have the key to a very big pot of money, there is no limit to how much you can take from the markets.
You can trade from anywhere in the world, how about a yacht in the Caribbean. You can teach your children how to trade and give them financial freedom.
You will not have answer to anybody

But without training self-discipline or the right psychology it will be very hard.


Good luck

MX

 

[Uncle]

Hi Pigsy, and welcome to hayesharry.

May I endorse all Rizgar and MX say, and I would go further....Unless you have at least £100,000 free capital, to give up your day job will be an act of folly. It is a FACT, 80% of all day-traders in the U S lose, so be cautious, learn the business first, it is a hard road, for you are up against the most sophisticated of people and systems when it comes to trading shares.

I would only emphasise seek all the advice and information you can get before you venture.

Pigsy's idea seems logical if wanting to dip a toe into day trading, by using the US market, depending on what time you can finish your normal job. At least that way, you know the salary will be in the bank next month to pay the bills.

And yes...........been there done that.........got all the "T" shirts........so BE CAUTIOUS

Meanwhile may i wish everyone profitable trades

 

[Dippers]

Hi, I'm a new member here but am a full time trader so thought I would just add my two pennith worth.

I have been trading NASDAQ stocks using a direct access broker for the last two years. It took me over a year to learn day trading techniques and develop my own trading methodology. I would endorse all the comments of earlier posters but I think you can achieve it on less than £100k.

To do this for a living you need to accept you will not make consistent profits for at least 12 months so you need to have means to support yourself over this period. I would suggest you spend at least four months reading everthing you can find and checking out chatrooms, the next two months paper trading and using trading simulators then start trading real-time with small shares building up to larger lots as your results improve.

I started with a trading capital of $50k but you can start with less ($25k min I would say) while you are learning on small lots. Be prepared to lose half of this during the learning curve.

You must develop your own trading methodology, following someone else doesn't work. You must set your own rules and goals. If this is going to be your business then treat it as such - WRITE A BUSINESS PLAN!

My rules include:
1. Start market prep one hour before market opens
1. Only open trades during first two hours or last hour of market
2. No overnight holds
3. Do not trades IPOs in first 30 days
4. Do not trade at less than 1:2 risk/reward ratio

If you are serious about following the US markets you must watch the opening 30 minutes, this sets the tone for the whole day. Of course you can trade just the last hour but 80% of my successful trades come from the first hour.

Finally just three things to remember if you want to be successful:
Keep Stops, Keep Stops and KEEP STOPS - the rest is easy.

Good Luck

Mike

 

[ChartMan]

Thanks For the post Mike, and others. It's a BAD BAD world out there!

Martin

 

[cookie]

No Martin - It's a JUNGLE out there !!!

Welcome Mike


Cookie

This is what you'll look like when you become a daytrader.

 

[ChartMan]

But without the smile........

 

[Riz]

hehe...

 

[CHARTY]

The sheer costs of getting real time feeds, a good news vendor and all that kind of stuff, is, at least $3,000 a month (including the cost for the communication line).
You can easily spend more if you subscribe the some major vendor.
You need to make quite a good profit to make a living out of trading.
Apart from those who trade within institutions, or those few, who have done so for years and are now independent, I do not think it easy to make a living trading on your own account.

 

[IsaacHua]

Hi Dippers,

How much % returns on capital per month do u think a good day/swing trader can expect to make generally on average? What's your opinion? Is 10-20% a little far-fetched?

Regards
Isaac

Hi, I'm a new member here but am a full time trader so thought I would just add my two pennith worth.

I have been trading NASDAQ stocks using a direct access broker for the last two years. It took me over a year to learn day trading techniques and develop my own trading methodology. I would endorse all the comments of earlier posters but I think you can achieve it on less than £100k.

To do this for a living you need to accept you will not make consistent profits for at least 12 months so you need to have means to support yourself over this period. I would suggest you spend at least four months reading everthing you can find and checking out chatrooms, the next two months paper trading and using trading simulators then start trading real-time with small shares building up to larger lots as your results improve.

I started with a trading capital of $50k but you can start with less ($25k min I would say) while you are learning on small lots. Be prepared to lose half of this during the learning curve.

You must develop your own trading methodology, following someone else doesn't work. You must set your own rules and goals. If this is going to be your business then treat it as such - WRITE A BUSINESS PLAN!

My rules include:
1. Start market prep one hour before market opens
1. Only open trades during first two hours or last hour of market
2. No overnight holds
3. Do not trades IPOs in first 30 days
4. Do not trade at less than 1:2 risk/reward ratio

If you are serious about following the US markets you must watch the opening 30 minutes, this sets the tone for the whole day. Of course you can trade just the last hour but 80% of my successful trades come from the first hour.

Finally just three things to remember if you want to be successful:
Keep Stops, Keep Stops and KEEP STOPS - the rest is easy.

Good Luck

Mike

 

[rathcoole_exile]

Congrats Isaac,
this must be the most aged, ancient thread anyone has ever resurrected !!
I suspect Dippers et al have long gone their separate ways

 

[rathcoole_exile]

and by the way, 10% per annum is doing GREAT, never mind per month !!!!!

 

[IsaacHua]

Lol .. i didn't actually notice the date! ha ha .. Anyway, 10% per annum is great for a day/swing trader? Hmm..

Congrats Isaac,
this must be the most aged, ancient thread anyone has ever resurrected !!
I suspect Dippers et al have long gone their separate ways

 

[shadowninja]

Depends on so many factors: risk management, opportunities for entry and re-entry, volatility of the market, position management technique...

You need to work out what is realistic for the specific method you use for each aspect that makes up your trading style, then you can get a rough idea of what return you could get.

 

[IsaacHua]

Hmm, true .. =) I think 10% monthly is possible. But u got to be really good i guess.. Many are called, few are chosen..

Ninja, which markets are u trading?

Depends on so many factors: risk management, opportunities for entry and re-entry, volatility of the market, position management technique...

You need to work out what is realistic for the specific method you use for each aspect that makes up your trading style, then you can get a rough idea of what return you could get.

 

[LittleKnown]

10%-20% per month is 120%-240% a year, over the space of 270 trading days divided by twelve, between .44% and .88% a day, no losses, pure profit, been looking into it myself and think that 240% a year on a $1000 account would be easier than a $50000 account, emotion, fear, greed, and all that jazz, still aiming to double my micro account in a year, baby steps..

 

[traderunner1]

10%-20% per month is 120%-240% a year, over the space of 270 trading days divided by twelve, between .44% and .88% a day, no losses, pure profit, been looking into it myself and think that 240% a year on a $1000 account would be easier than a $50000 account, emotion, fear, greed, and all that jazz, still aiming to double my micro account in a year, baby steps..

A good daytrader will be able to make a profit in the order of 0,4-0,7 times the initial risk per trade is my experience; it is therefore important to have a system that generates many of these trades per time period. A daytrader making 5 trades a day should be able to get about 2-3,5 times his inital risk put on the table, per day.
this will amount to 40- 70 times the initially exposed risk oer month.
So trading a future system exposing yourselves with a stoploss initial risk of 100 $ per trade will then result in 4000-7000 dollars per month.
However there are two important factors here that are also confounded:

How is the variance in the trade reward? If you get 0,4-0,7 times the initial risk per trade as a rewardbut it is because you have one homerun per 10 opportunities it will be different from having a consistent series of basehits....and the reason is that it is more efficient to size your position with base hits instead of home runs.
Position sizing is the key to great success over trading for a living only.

The foundation for good position sizing is low variance in your trade results.
Low variance in trade results comes from having a good plan and executing that no matter what.
I have learned that the hard way....

Traderunner

 

[citystar]

in the last 2 years i have traded from home spread betting to capitalise and forex, now i am daytrading in and out in 10,1,an hour or all day but no slippage. yes i have lost so thats part of the game,you must have a feed 24hours 7 days to stay in the game,i am happy at it and it keeps me on my toes,when all else fails i drive trucks,until i find that trade. then!!!!! thats the secret

 

[qsera]

No Martin - It's a JUNGLE out there !!!

Welcome Mike


Cookie

This is what you'll look like when you become a daytrader.

LOL I totally agree of being in a Jungle from so many months..