Trade full time or part time? Advice please?

[King Tut]

This isn't a careers advice board I know but I did read someone else ask for some careers advice and the responses were good so I thought I'd ask for this boards sage counsel too.

The choices are to either work full time and trade part time or just trade full time.

Option 1) I used to work in IT and I could stay in this field. There's a job going for trade floor support (supporting Reuters and Bloomberg terminals for a major bank) which i'm confident I'd get. I thought this might be interesting in getting some 'insider' info aswell as a salary but what I don't want is the stress of just another job and making someone else richer. I don't want to be doing this for the rest of my life. (Im 28).

Option 2) The second job I am seriously considering is teaching. The major attractions are the intrinsic rewards of doing something 'good'. I'm hoping to still trade part time by getting a wireless laptop. The kids will never know!

Option 3) The alternative is to trade full time. The good part is that though I didn't really like my old job in IT, it was well paid and I managed to save about 50K in 5 years. I think this is enough to trade - or is it? My intention is to trade CFDs.

What do you think I should do????

Thanks in advance.
M.

 

[Trader333]

In my view and without any doubt whatsoever, you should trade part time in the evening whilst still working. That way you can determine how successful a trader you would be without the pressure of having to be consistently profitable.


Paul

 

[sidinuk]

I pity the poor kid who answers back just after a trade goes against you!

 

[BKuerbs]

I do not know your level of knowledge, but to start a full time trading career might look like this:

- First you have to study the markets , pick your instrument (stocks, futures, preferably one or two or options)
- Develop your method / rules and papertrade it for a while
- then start real time trading
- constantly refine and tweak your methods and adapt to the changing markets.

This may look like the usual waterfall model you know from your IT career, but it is not, there is a lot of parallelism, going back, advancing again etc.

During the first phases you should not trade. At least not for profit, doing some test trades, to become acquainted with your order platform, get a feeling for the market is all what is needed.

During this time your savings will have to cover your costs, including realtime feed, PC etc.

This will take anywhere from 6 -24 months, with 12 - 18 months most likely. But it is impossible to give any reliable numbers here. There must be enough money left from your savings to serve as trading capital.

The alternative: trade part time. Get a not so stressful job and try the American markets in the evening. The last 3-2 hours of ES/NQ/YM or NASDAQ may be very rewarding (or devastating).

The advantages are obvious, the disadvantages are, your working days will be pretty long, and everything might take a bit longer, but there is less stress to be successful.

Regards

Bernd Kuerbs

 

[King Tut]

Thanks

Thanks to everyone who has replied.

The idea of part time trading does sound good to me now that you guys recommend it.

I have traded UK equities for 6 years very sucessfully (I mean real equities not CFDs etc.). by buying and holding them for the long term. I wanted to continue to trade UK equities but as CFDs to take advantage of the margin. It's this that makes day trading a viable option. 50K on its own just isn't enough capital.

But I wouldn't want to trade US shares because I know hardly anything about them. My strategy is just to trade a handful of UK stocks (about 5) that I know really well (the fundamentals as well as short term price history).

BKuerbs, I've pretty much done as you've said. I've been paper trading those 5 shares for the past month. Allied to the 6 years 'normal' trading experience I have (but buy and hold NOT day trading) I think that should be enough experience - or do you guys disagree? Do I need actual day trading experience?

As for the paper trades - so far, so good. I'm up on pretty much all the trades Ive made. Mostly they are 50K trades where I trade the ranges the share trades in. But today, I 'bought' 500K of WPP @ 554. They closed at 560p. I made a paper profit of 5K in one hour! Obviously, I wouldn't risk all my capital on one trade but it just made me think about the possibilities!!

Thanks to everyone who replied.

 

[bigtimetrader]

You can trade full-time, however you have to realize there will be a learning curve and it is very liekely you will lose money for sometime before becoming consistently profitable. You may be able to reduce your learning curve if you can get with a prop firm that has some type of mentorship program or you can just read everything you can get your hands on to figure out the business. Even with the right knowledge it will still take some time to develop your own strategies.

 

[BKuerbs]

...... I've been paper trading those 5 shares for the past month. Allied to the 6 years 'normal' trading experience I have (but buy and hold NOT day trading) I think that should be enough experience - or do you guys disagree? Do I need actual day trading experience?
.....

One month is not enough. Above all, you should trade exactly like you want to trade later. That is use exactly the same risk parameters. And do some real trades, set aside an amount of money you are willing to lose.

While papertrading is necessary, real trading is different. However realistic these trading simulators are, real executions will be different.

But above all, most likely your own reaction will be different. It is one thing to watch a trade in your simulator and another to do it realtime. It may not be true for you, but this a big difference most people experience.


Regards

Bernd Kuerbs

 

[waytogo]

Option 2) The second job I am seriously considering is teaching. The major attractions are the intrinsic rewards of doing something 'good'. I'm hoping to still trade part time by getting a wireless laptop. The kids will never know!

Day trading and teaching both require your fullest attention - you will not be able to do both at the same time! (and the kids always know!! :cheesy: )

 

[DIN]

Totally agree. it is the only way to go for long term success.

 

[Roberto]

I managed to save about 50K in 5 years. I think this is enough to trade - or is it?

It is if you're good enough. I think what matters is how long you can keep going without income. If you can start with 40k and the remaining 10k will keep you going for most of a year if necessary, then you have a good opportunity to start. But don't start imagining that you're "trying it out"; it needs more commitment than that. "Do, or do not; there is no 'try.' "

 

[Tuffty]

I like the book 'How I trade for a living' by Gary Smith. Not because it shows you how to trade but tells the story of someone wanting to trade successfully for a living. He says and I quote 'I stumbled blindly for 19 years as a part-time and break-even trader'.

 

[Roberto]

I like the book 'How I trade for a living' by Gary Smith.

I've often wondered about that book ... how does he actually trade for a living? What I'm asking is which markets is he involved in? Is it all to do with "level 2" stuff on individual US stocks or something?

 

[TWI]

Get together some capital, give yourself 6-12months full-time, if you don't like it or fail go back to wherever you came from. Suggest you try to find people who already make a living from trading and talk to them about it and maybe pick up on what methodologies they are using. It is very different from trading on the side or even trading for somebody else.

 

[starspacer]

Roberto

Smith trades in mutual funds (unit trusts in UK speak). He started with $2,200 in 1985 (after experiencing a long period of break-even results) and built this to $650,000 by 2000. He admits to being a technophobe so his strategy is not concerned with the detail of Level 2, but rather the broader market trend. He is big on sentiment indicators and tries to capture the trend and claims that he avoids the crashes. He largely ignores technical indicators. His motto can be summed up by the saying that the market always does what it has to do to make the majority wrong.

The book is now 4 years old so it would be interesting to find out how he has coped with the bear market. Anyone know?

 

[TWI]

His motto can be summed up by the saying that the market always does what it has to do to make the majority wrong

Is he the incessant buyer of bonds at the moment by any chance?

 

[Alphabet]

I wouldn't want to trade US shares because I know hardly anything about them

I started out trading UK shares but found that it was cutting into my work. I was spending too much time on the net looking at my positions and not enough time on my job. I now trade US stocks in the evenings after my day job. I day trade and always close out all positions by the end of the day so I'm not affected by any news or whatever as I'm not able to be at home for the market open to close out any loss making positions.

 

[anley]

Many people don't realise that Keynes was himself a super successful speculator in his day, making fortunes not only for himself but also the Cambridge College fund which he managed (can't remember which one it was though).

He did all his work and research for just 30 mins a day while still in bed in the morning.

Working long hours is not always the right way to succeed. Of course if you're short term trading it's a must but I still can't work out why most people seem to think that short term trading is the way to go. Odds are very much against you and the cost of doing business (comms and bid-offer spread) for most people will be the reason for their downfall.

 

[Tuffty]

I read an article about a year ago in which Gary Smith hadn't got caught out by the Equity markets downturn and had indeed moved into bond markets. From what I can remember he was a big fan of large % move days, and would jump on any follow through. He'd also look at divergence of indecies.

I personally found his story more inspiring rather than his methodology of trading (as every one has to find their own way to trade that suits them).

 

[TomTom]

£50K to trade with ehh ?
Well all traders makes mistakes, from expieriance its the money management that ruins traders.
Best to do some reading on risk/money management.
Also be good to know what knollage you have about this game.

If this was me open an account with £5k with an opropiate risk / money management stratogy before commiting any big money to this.

We all make market calls , some right/wrong , he who dose not change his opinion in this game will soon have no change to change .

Good luck .#

 

[donaldduke]

Good luck .#

TomTom,

This thread is 4 years old. I wonder how King Tut did?