Self-supported trader - advice?

[si1503]

Hi,

I have been trading for a few months now on spreadbetting sites and in less than 2 weeks I will be leaving my current job at an IB and going pro (self-supported).

I would be really interested in speaking with other professional day/position traders that have their own set-ups, do their own research etc, as to being with I will be pretty much a one man team, having to do all my research myself, identify my own opportunities and manage my own positions/strategy.

For the record I am currently profitable trading part-time and have spent the last 2 years of my life learning and reading as much as I can regarding the profession, I am ready to give 100% of my time to this.

It would be great to speak with self traders that would be happy with giving up a little time to really help someone starting out.

Thanks

 

[Rhody Trader]

If you're a good part-time trader, why give that up?

Second question: Is your part-time trading strategy scaleable to full-time trading?

Third question: What kind of returns are you going to need to generate to having your full-time trading match your current salary + part-time trading profits?

 

[si1503]

Hi John, thanks for your questions.

1) I am a daytrader. So part-time = less time for research, and also a lower quality and quantity of opportunities. In a nutshell I believe that the demands of my current profession are a constraint to my potential as a trader. If I was trading full-time I would be far more prepared each day, no doubt about it.

2) Absolutely, frequency of trades will change little, I am a few believer of few good trades as opposed to a handful of good and bad, if I could live off making a couple of great trades a week I would (slight lack of capital for this at the moment however!), but in terms of selectivity and quality of my trades, one would hope I would see some improvement here. I am aware being too consumed in the markets can work against you also, trying to catch too many moves, but I have learned from this on days off work sat in my room all day and had the worst days trading of my life... I am moving into an office to trade from and will be working on other projects alongside, so hopefully the environment will help.

3) I feel this is of little relevance (for me anyway), what is more important to me is having enough to survive and being able to grow my bank, I have a strategy in place with daily and weekly points estimates that I attempt to reach, these points targets are set around 2/3 of what I have generated on average part time, so very conservative I feel. If I achieve my weekly points X(multiplied by) a recommended stake based on the size of my bank then I will make enough to live from plus grow my bank at a healthy rate. FYI over the year my income withdrawals will be about equal to my earnings from my current job, my bank will have grown to a few times my current annual salary.

For any more detail into my plan/strategy feel free to message me.

Simon

 

[Rhody Trader]

Have you taken taxes and other benefits in to your required earnings calculations? That's something a lot of would-be full-time traders fail to do - until they get slapped with the bills, of course.

 

[Lee Shepherd]

Have you taken taxes and other benefits in to your required earnings calculations? That's something a lot of would-be full-time traders fail to do - until they get slapped with the bills, of course.

He's a spreadbettor, providing he continues with spreadbet companies and not CFD's or DMA he wont have to worry about tax's in the U.K as an individual.

 

[si1503]

He's a spreadbettor, providing he continues with spreadbet companies and not CFD's or DMA he wont have to worry about tax's in the U.K as an individual.

Correct Lee. Eventaully when the cost of the spreads begins to outweigh the cost of relocating abroad I will probably look into that and start trading futures and other (usually taxed) derivatives from a location where I will not pay any tax... but I will enjoy pondering over that decision further as and when.

 

[Rhody Trader]

I realize the tax implications, and I won't claim any knowledge of how payroll and other taxes come into play outside the US. What about other employer provided benefits, though?

I bring this up because my question about the types of returns you would have to achieve to meet your current income + trading gains was basically ducked. It's not irrelevant to this case because if you tell me you would have to make 20% per month to meet your objectives I'd say you probably want to keep your resume up-to-date. I bring this up because we see loads of newbies coming through asking questions like "Can I trade for a living on $5000?"

Plus, the fact that you've only been trading profitably "for a few months" is something which raises concerns in my admittedly conservative view.

 

[si1503]

I embrace your skepticism with open arms, however please rest assured my current business model,if successful, will allow me to support myself and grow my trading funds quite rapidly. I am in a very fortunate situation in the sense I am moving into family office space which to begin with I am not having to pay for (in exchange I will be able to chip in with some work when there are no opportunities about, but my primary focus will be on my trading). The family member supporting me is impressed by what I have made thus far part-time, I believe my edge is sustainable, and infact will work even better when conditions are less choppy.

 

[Rhody Trader]

Family member, eh? I wish you luck, but be very careful about raising expectations. It can lead to lingering bad feelings.

 

[timsk]

Hi si1503,
I agree with John and Lee's comments and would add that if you're daytrading, I'd be concerned about doing this via a spread bet Co. Although spread betting and day trading aren't mutually exclusive, it is generally agreed that they don't make the best of bed fellows. I'm not from the anti SB league that thinks SB Co's are all crooks that will pull any and every trick in the book to part you from your money. However, clearly there are issues that you have to take account when SBing that direct access traders don't have to worry about. This game is tough enough as it is without taking on unnecessary additional 'issues', IMO. These will either be a significant or not depending upon your trading style. If you're attempting to capture large intra day moves lasting hours, then you might be okay with the SB Co. However, if you're in 'n' out in a matter of minutes, then the SB bias and spreads will, in all probability, eclipse any edge that you have. Even if it doesn't and you're so good that you can make money scalping via a SB Co., then you'll make truck loads more the minute you switch to direct access. Anyway, best of luck with your venture - let us know how you get on.
Tim.