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

[AlwaysANoob]

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 🙂

I have a 6-day vacation coming up where my wife and I are taking our new son to visit my mom. I'll have a lot of spare time. Well, not now with those links. 🙂

THANKS.

 

[Liquid validity]

No problem, just a few links, someone else's hard work putting it together 🙂

 

[Scotty2Cues]

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.)

Is this meant to be a brag post?

Why dont you try it and find out?

You cant be that bothered if you've come on here to ask total strangers if you should give it a go.

If not what about this (although its only £100k a year to start)https://apprentice.fremantlemedia.com/

 

[Scotty2Cues]

Out of interest what would turning $5 into $20k at around 1989 be equivalent to today and how many classmates did you have?

 

[Scotty2Cues]

Surprises me that you havent had a go at trading in the past.

 

[AlwaysANoob]

Is this ment to be a brag post?

Why dont you try it and find out?

You cant be that bothered if you've come on here to ask total strangers if you should give it a go.

If not what about this (although its only £100k a year to start)https://apprentice.fremantlemedia.com/

No - it was not at all intended to be a brag post. I wanted to give a thorough description of my background and motivations, so that experienced members here could hopefully ascertain whether or not I potentially have the "stuff" that could lead to being a great trader.

Also, I have found in the past that people who understand money and make money are willing to TALK about money, including specific amounts. That's why I mentioned salaries - not to brag, but to put the facts out there so that folks can help me make as informed a decision as possible.

But I must emphasize, I was not trying to brag. I apologize if it sounded like I was.

 

[LittleKnown]

200k a year and you want more!
You trying to solve the worlds problems?

 

[HowardCohodas]

I have a 6-day vacation coming up where my wife and I are taking our new son to visit my mom. I'll have a lot of spare time. Well, not now with those links. 🙂

THANKS.

A new son. How great is that!

A new adventure (in addition to having kids) is also a wonderful experience. Getting started is largely a matter of personal learning style. However it is made more complicated by the plethora of opportunities. Now a retired software engineer, I went from inventing OS solutions and DBMS solutions to being overwhelmed by the explosion of development all around me.

The trick will be when to transition from the part of your education related to what it's like to trade to the challenge of selecting what and how to trade. You could not have been successful in our business without making judicious breadth vs. depth decisions all the time. My caution here is that a new knowledge domain need not be any different for you. Trust your gut. Many very talented people I have worked with get too timid when entering another knowledge domain and forget the basic talent that made them so successful.

Have fun, both with your new son and your beginning adventure.

Live long and prosper.
Howard

 

[HowardCohodas]

No - it was not at all intended to be a brag post. I wanted to give a thorough description of my background and motivations, so that experienced members here could hopefully ascertain whether or not I potentially have the "stuff" that could lead to being a great trader.

Also, I have found in the past that people who understand money and make money are willing to TALK about money, including specific amounts. That's why I mentioned salaries - not to brag, but to put the facts out there so that folks can help me make as informed a decision as possible.

But I must emphasize, I was not trying to brag. I apologize if it sounded like I was.

Your head is in the right place.

 

[Martinghoul]

Why don't you re-allocate the N hrs a week you spend on trading fictional things in Eve towards trading stuff in the mkt? You may find that the dynamics are not that dissimilar, provided you're able to deal with the psychological aspects of trading real money. Sounds like you'll do just fine and you may not need to quit your day job.

 

[Mr. Charts]

Your head is in the right place.

That's a relief.

 

[HowardCohodas]

200k a year and you want more!
You trying to solve the worlds problems?

Very successful people understand that money is not the goal, it is a measure of accomplishment. If the goal is entering a new knowledge domain and excelling at that as well, money is a good measure of the extent of accomplishing the goal.

There are three large theme parts of life; learn, earn and return. You don't know how our new trader accomplishes the return part of his life. Frankly it's not for us to judge. I happen to know personally a large number of very successful people. They have all been generous all their lives, even before they were very successful. But after child rearing responsibilities diminish, they tend to devote more of their time and resources to the return theme.

 

[DashRiprock]

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!

Hi mate 🙂

well, for me this route sounds perfect for you.

If you choose to give it a go, I would recommend:

http://www.amazon.co.uk/Mind-Over-M...0538/ref=sr_1_1?ie=UTF8&qid=1299608382&sr=8-1

http://www.amazon.co.uk/Markets-Pro...9094/ref=sr_1_2?ie=UTF8&qid=1299608382&sr=8-2

Alot of locals/pros I know use market profile, and it is especially suited to US futures and trading the open (which is what you'd be doing)

Also, these books

http://www.amazon.co.uk/Daily-Tradi...8566/ref=sr_1_1?ie=UTF8&qid=1299608486&sr=1-1

http://www.amazon.co.uk/Enhancing-T...-Psychology/dp/0470038667/ref=pd_bxgy_b_img_b

http://www.amazon.co.uk/High-Perfor...=sr_1_1?s=books&ie=UTF8&qid=1299608526&sr=1-1

are good for helping you with the psychological aspect of trading (brett steenbarger also has a blog, google for him)

the other reason I mention them is that both market profiling and brett steenbarger are well known in the industry, so there is a very good chance that the other traders you meet in chicago will at least be familiar with the material, if not use it directly (they may even know the authors).

I would also recommend not depositing money with a broker yet, but getting Ninjatrader with an external feed (kinetic seems to get a good rep) for maybe $150 per month. That way you can develop your strategy without having to worry about your broker going bust, and Ninjatrader is a great little package (big user community, great paper trading facilities etc).

With these, you can set yourself up with the right balance of technical learning (market profile etc), actual trading (its much better to do 3 good hours than 10 average hours) and books to help you coach yourself to profitability. So you get 3.5 hrs in the morning and then can review the day after your "normal" day of work.

Obviously I am going to be a bit biased because this is what I do, but really I don't think you could ask for a better route to trading professionally.

 

[AlwaysANoob]

Out of interest what would turning $5 into $20k at around 1989 be equivalent to today and how many classmates did you have?

I haven't done inflation calculations YET but that is a very good question.

Allow me to share some fun and amazing details of the school I went to and the candy trade I went into. I think you'll find it entertaining and amusing. If not, I apologize. 🙂
Also, I hope this is in some way inspiring.

I went to a high school of about 1,100 students. There were a couple of neat factors that worked out for me to do very well in the candy business.

1. The school was very long and narrow - only one main hall. I could set up in between classes in several potential locations where students HAD to pass by - they'd always see me. What would you call that - a captive market? I don't know my terminology.

2. It was a closed-campus. Students were strictly forbidden to leave for lunch or snacks. The vending machines were ridiculously expensive. Cafeteria food (desserts - my main in-house threat) were terrible. Therefore, I was the only option for reasonably priced goods.

3. It really was like the drug trade. I had students who were addicted to candy. They'd hand me a $10, and if I was slow getting them change, they'd just say "You know what - just remember I gave you the $10, and give me one candy bar for each of the next 20 days."...
"Um... no .. problem. You got it." (I eventually had a friend help me with the credit account book-keeping). I still have his green spiral notebook as a souvenir.) I mean, kids were blowing their LUNCH money to buy from me. They were spending LAB fees to buy from me. If they had cash, and they saw that shiny goody bag coming their way, odds are the cash went into my pocket. Eventually I had to refuse business to a guy because candy was ALL he was eating. I felt terrible - he was so overweight and I knew I was a partial contributor.

It took just under three years to convert the $5 to $20k. It didn't happen overnight, but profits DID come in consistently. I was up to $25 in the first week. The fact I quintupled my money in a week is what got me starry-eyed and made me think I was on to something. The main factor in ensuring I was maximizing my profits was to expand what I carried. Eventually I had 24 varieties of candy bars, 7 kinds of gum, and a brand of suckers that everyone loved which had a 340% profit margin. (2,500+ % if I could snag them on post-Halloween sales.) I had to learn bizarre trends, though. Did you know high-school students prefer minty-flavored items 300% more often between the months of November and February? I sure didn't... at first. Cinnamon is the least-preferred of any of the common flavors of gum. In the early 90's, a quarter was the most likely amount of money a student could be quickly convinced to part ways with. Not 30 cents. Not a dime... a quarter. Trends like that...

I also developed good upper-body strength - I had to carry a heavy bag that had specially-designed interiors to keep things cool on a hot day.

My senior year, the school made me quit doing it. They said that I was getting in the way of all of the fundraiser efforts of various student groups. (You know - where they go around selling the generic candy bars so they could go on field trips.) I was furious. My dad was in tears he was laughing so hard when I came home to moan about it. I even remember telling the assistant-principal "Maybe the student groups should learn to get their hands on a product they can actually move?" (Those were my exact words.) She was not at all pleased with that comment. I was not at all pleased with the huge opportunity loss my senior year. Word was passed down to all the teachers that they would be in big trouble if they continued to let me "deal" in class.

C'est la vie. I think the learning experience was worth just as much as the profits.

One other thing you might get a kick out of. I was (and am) a computer nerd my whole life. About 1992, as my candy business was dying due to "new regulations", I got a new PC and discovered this thing called "Microsoft Windows." I could tell it was going to be how everyone would want to interact with a computer over the coming years. I asked my dad what I should do if I was a big believer in an idea or product. I mean, I was NUTS about this idea. He told me a little more about the stock market, and said I should buy some stock in any company that I expected to do well because of an amazing product or idea. So I took about eight grand of my earnings (I have no idea how I picked that number), and asked my dad to help me figure out how to "invest in Microsoft". He thought I was crazy, but he was a Fidelity customer, so he got on the phone with a rep where I could listen in, and he started an account for me. I think it might have been a special custodial account or something - I was under 18. As a kid, for whatever reason, I was fully prepared that I might lose the whole chunk. It was "no big deal". My dad kept emphasizing that over and over - I could lose it all. "You sure you want to do this bud?" But part of me just HAD to do it. I couldn't get over this whole notion of using a mouse to move around a graphical screen. I kept telling my parents "This is what will help make computers less confusing to the rest of the world. Everyone will want one after they try this!"

I bought just over $8,000 of MSFT at age 17 and held on to it through my college career. I cackled with glee as I saw 68 computer labs open up on my campus, each with around 30-35 PCs running... Microsoft Windows. I started seeing commercials for Microsoft. Everyone now knew who they were. In 1999, I was old enough to look around at the tech bubble and say "This is kind of ridiculous." I had split multiple times, did the math, and decided to cash out. A few hours after the sale went through, my dad taught me about this concept I needed to be aware of called 'long term capital gains'. I think it's at that point when I became a republican without knowing it. 🙂 But during that conversation, a moment of Zen broke through...

The fairly hefty cash balance I was looking at was originally born from.... five dollars and a kid with a bag of bubble gum who wanted to try to make some money.

Take from this story what you will. And thanks for all the advice. Please keep it coming.

 

[AlwaysANoob]

Why don't you re-allocate the N hrs a week you spend on trading fictional things in Eve towards trading stuff in the mkt? You may find that the dynamics are not that dissimilar, provided you're able to deal with the psychological aspects of trading real money. Sounds like you'll do just fine and you may not need to quit your day job.

This was a great post, and it made me take pause. "Yes, why AREN'T I doing that."
And after 30 seconds, my gut told me the answer: "I have fear. I am afraid that I am not prepared. I don't know what to trade, or how to do it."

I am going to work hard on answering those questions - studying here, then investing a SMALL amount in a market that is open during a timeframe that works for me. You're right - I should replace my Eve trading time with REAL trading time.

Another thing about Eve is that compared to real markets, I am suspecting it is very "slow". On the most heavily traded products in Eve in the big market hubs, a "Busy" product has maybe 3 new sell orders and 3 new buy orders posted updated in 5 minutes. You have plenty of opportunity to think and decide whether you undercut the other guy or limit your losses and get out. (Or pick him off to get him off the boards if his quantity is small enough. Is that the right terminology?)

I also need to learn what real life gaps are between bid and ask. In Eve, it's luxurious. I buy some items for 100mil in-game cash and sell them for 120mil in-game cash - and I'm STILL the best bid and best ask. I would find it most likely that the bid/ask spread in real markets is very tight and can be very volatile. This adds to my fear - that I wouldn't be prepared for a major move in a tight market, and could screw up big time.

But yes, YOU ARE TOTALLY RIGHT. When I'm prepared, the eve trading needs to go away, and get replaced by real trading.

Thanks for the thought!

 

[AlwaysANoob]

200k a year and you want more!
You trying to solve the worlds problems?

I heard on the radio that the anticipated cost in 15 years for a 4-year education is over a quarter of a million. And my wife wants more kids. 🙂

In all seriousness, I would really like to have more to contribute more. I could be see being a part-time philanthropist, but ONLY once my family is completely set, and we are financially independent.

 

[AlwaysANoob]

Very successful people understand that money is not the goal, it is a measure of accomplishment. If the goal is entering a new knowledge domain and excelling at that as well, money is a good measure of the extent of accomplishing the goal.

There are three large theme parts of life; learn, earn and return. You don't know how our new trader accomplishes the return part of his life. Frankly it's not for us to judge. I happen to know personally a large number of very successful people. They have all been generous all their lives, even before they were very successful. But after child rearing responsibilities diminish, they tend to devote more of their time and resources to the return theme.

Thank you for helping me to find the right words for this. Cash is not my goal - success and achievement is. When I go to the gym, I take a little notebook with me to keep tabs on how many reps I do of each exercise, and how many sets. It ebs and flows depending on my stamina, day of the week, how I feel, how long it's been since I last worked out, etc.

But the important thing is the MEASURING STICK. It helps keep me focused. More importantly, it helps keep me aware of where I'm at. It's a measure of relative success, and shows me when I might not be doing things as well as I could be.

Same thing with the money. It's a measuring stick to me.

 

[Chartsy]

trade daily charts for 2 years and keep that salary!

 

[arabianights]

Am I the only one who read the OP's screename as "alwaysanob"? 😆

P.S. I'd ignore the people who are highlighting the 200k as if it's an incredible amount of money... they're thinking of it as pounds in their head, I think...

P.P.S. Are you willing to lose your wife? If not then don't do this. If you are, then I say go for it!

P.P.P.S. Don't **** around, stick 50k in a futures account now. Start initially trading 1 lots, for sure, but get some money at risk!

 

[coopster]

Thank you for helping me to find the right words for this. Cash is not my goal - success and achievement is.

Say that when you're a few points down on a trade for the 20th time in a row and not switching your computer on would have been more lucrative than the hours you've just spent giving other people your money!

Trading is the worst thing in the beginning for someone wanting success. At each attempt it beats you down until you consider giving up. Then you get an easy win and suddenly its the best job in the world. Repeat until etiher you get good or the money runs out. I'm still repeating after 14 months of trading!

I admire your enthusiasm but don't sacrifice anything until your account shows a regular profit, you have documented all your trades and learnt to deal with the emotions involved with trading.

Anything else is just madness. I am in a similar boat, just without the family commitments and i can't even bring myself to quit work on the off chance i get good at trading by devoting more time to it. I have changed my working hours so that i can watch the US market open for 3 days a week. Something like this for your intended market would be my suggetion to you.

Arabian is ultimately right, get some money on the line and see what your made of. The rest is all speculation.