Trading, planning for the future, pensions.

[JTrader]

My approach to trading is to try and make a very healthy living over a limited number of years - in order to secure some capital - thus a decent level of finincial security.

The thought of spending the next 30 years sat in the spare bedroom day after day, dealing in uncertainties, perhaps does not do it for me!

For me, if I am not able to make considerably more money through daytrading than in a regular job, then given my youngish age, I do not feel it is worthwhile or beneficial in being isolated from the rest of the working society - perhaps viewing trading as more suitable for an early retired or a semi retired person.

However, I imagine - and understand why - there are people with very different objectives in their approach to trading - who are happy to make a regular income - comparable to in a normal job.

I spoke to an RAF Officer about RAF careers recently. If I were to do 16 years service I would get a pension consisting of a tax free lump sum of around £45,000 + £1000 per month thereafter - not a bad deal!

I also enquired about the Local Government pension scheme. If I were to serve 30 years and my final salary was £40,000 - I would be entitled to a tax free lump sum of £45,000 and an annual pension of over £15,000.

I know that a self-employed person (trader) would be able to get a private pension

What is your opinion of the views that I have expressed here, particularly in my approach to trading?

What are other traders doing in their planning for the future - pensions/retirements?

Thanks again

jtrader.

 

[trendie]

Different people have different objectives.
Some people enjoy the freedom from office politics, thus earning about the same as a normal job is irrelevant.
Some people are fed up with pathetic results from the professional traders, and think they can do better.
( about 3/4 of fund managers UNDERperform, say the FTSE index ). And thus possibly trade through a SIPP. ( self-invest-personal-pesnion ).

Day job - you get paid an hourly or weekly rate. You promotion is determined by others with more power.
Trade yourself - your income reflects your own hard-work.
And if you are good, your income has potentially no limit. You dont have to ask a boss for a raise.

My personal view: I worked in a software house for 10 years. I became freelance, and now earn twice as much. ( OR, put another way, can earn enough in 6 months as I used to working for someone else.
Now I have more money - take holidays when it suits me - and can trade on the afternoons.
Working for myself has much greater upside potential. )

By trading, or learning to trade, you are imprving your chances of a better lifestyle, by simply relying on yourself to get what you want, rather than relying on a boss, or on useless fund managers.

Wish you well on this arduous journey !

 

[melsen]

I have the exact same views as you jtrader. Completely. I'm also hoping to be able to use this a as a way to improve my financial situation later. I just have a problem which is to actually get started... I read page up and page down and get confused as hell to say the least... hehe
What software should I use, where should I get feed, what index should I trade from... and so on and so forth.

 

[Naz]

I have a SIPP with comdirect.

This enables me to put in some of the larger US stocks into my pension fund.I find these move a lot more than the equivalent UK shares.

 

[JTrader]

Hi Melsem

learning how to trade in my opinion, should be treated as a journey and a person should not hope to complete this journey overnight. Take your time, grow into your role as a trader, develop the mindset of a successful trader - by developing an understanding of exactly what will be needed of you day in day out - dedication, a strong work ethic, complete self-motivation, detemination, concentration, discipline and patience.

Speaking as a day-trader, I would also advise you to stay in the day job for as long as possible and to treat the 'learning how to trade' process as you would treat a course/part-time evening class at college.

On this course you may wish to create a log of everything that you have learnt.

Use your 'study' time to develop mechanical systems that you may wish to trade in your chosen markets.

Do not put yourself in a situation where you are reliant upon making a living solely through trading until you have completed a large chunk of the initial learning process. There will also be an ongoing continual learning process once you commence trading full-time.

The good news is that trade2win is the right place to learn most of the things that you will need to learn in order to become successful.


Thanks

jtrader.

 

[JTrader]

Getting back to my opening post.............

I agree - trading has many benefits - namely the ability to set your own salary level and to be your own boss.

In other careers, employees are rewarded for their commitment and service over time with the security of a pension scheme that pays out a 'salary' after the qualifying period - be it 16 or 30 years or once you reach age 60.

Given that trading presents an irregular/non-guaranteed income and that there is no company pension scheme upon retirement I am interested to know what fellow traders are doing to prepare for retirement (besides trying to build up a big pot of cash :!: :cheesy

Perhaps this leads to another question, or perhaps we should have a poll. What are traders objectives - to make a steady regular income comparable to a regular job?

or

To build up a pot of cash big enough to be able to establish some level of financial security and set oneself up for life over the next 5-10 years?

Perhaps these questions are a bit personal for some traders. If so I apologise for being nosey and can understand why you may not wish to answer.

I'm just trying to reach a better understanding as to the objectives and motives of traders and ideas as to how we can prepare for the future.

Thanks again

jtrader.

 

[JumpOff]

30 years of isolation?

The growth of the internet has led to the ability of traders to "sit in the spare bedroom." Back in the mid nineties, there was a "day trading" phenomenon that swept throught the U.S. A couple of Young Guns named "Block" from Texas, got the great idea to put together a trading parlor package that could be sold as a franchise system. They put together the computers, the data circuits, the fellows in the licensed red and gold jackets. The franchise buyers group rented the building and ran the advertising.

At the time, I had sold a computer retail business and was looking for another investment. Part of the due diligence had to do with figuring out how you were going to "fill those station seats." It took a medium-large city with a certain kind of demographic to provide a steady stream of people who were willing to burn through 10-20,000 dollars. (it was common knowledge that almost all people who started day trading at that time would lose their stake)

Well the day before the deal went through, I decided to step aside and my new franchise buying group partners went on without me. I just wasn't comfortable getting into a business where my interests would be so much at odds with my clients. I lost track of them, and went on to another business opportunity.

Then about 18 months later I heard the news on the television. One of those clients who'd lost his 20K came into the parlor with an automatic weapon and opened fire. Several people died and another 1/2 dozen were injured. I'm not blaming the franchise guys - this shooter was mental case. But I've only recently become interested in trading again - as you can imagine, the experience kind of soured the whole topic for me.

So I've been thinking about the isolation issue. One thing about a public parlor - it was a lot of fun. Your mates are there struggling with the same ideas, sharing techniques - kind of like a private club. And there were some people who knew how to make money trading and would give you some basic tips to get started. The market is so big that your success did not mean their failure. I've been wondering about the loss of contact if I choose to do this full time. (Ha, - first I have to figure out how to make my demo account go UP instead of Down, Down, Down.)

Do you trade alone? Does an anonymous internet board like this provide enough contact?
JO

 

[Trader333]

I cannot speak for others but I trade entirely on my own in a quiet room without the possibility of being distracted. I didnt always do this but I have found that if I am surrounded by others they could unduly influence my decision making. I find it much better to follow my own strategy without others who could question its validity.


Paul

 

[JTrader]

I'm more talking about isolation not in terms of being on you own in the spare room all day, but a trader is also isolated in terms of the role they are playing, the skills they are using - which aren't really that transferable to other/'normal' jobs out there in Society. Say for some reason the trading goes tits up after 5 years. How would you be able to sell your experience as a trader to a mainstream employer? It is fairly non-specific.

Thanks

jtrader.

 

[JumpOff]

The part of trader333's situation that I find ideal is the goal of no distractions. I find that I can't relay relax and look at the look at the chart and *wait* for an opportunity unless I know I have some uninterupted time in front of me. Knowing that I have a phone conference call to make in 1/2 hour distracts me here and now.

I do wonder about the social aspects of all of this. How to explain it to a employer in the future (although I've been self employed for so long - it's hard for me to imagine that I am employable anyway). And I also can't see myself having a social conversation about what I do at your typical social gathering.

One of the really positive aspects of learning this skill (or perhaps I should say developing this talent), is that it can provide interesting work and income well into old age - regardless of your physical strength.. As long as you are healthy and alert, seems like you could just keep trading.

Another positive aspect with regards to pensions, planning for the future etc.. is that if you are successful at it, you will not be dependent on someone else providing you with a 'pension.' Here in the States, our population demographics don't bode will for people who plan to retire around 2030. I like the idea of having a little pile of gold in a swiss bank account.

I hear a lot of traders talking about the holly grail of "I'll make so much at this that I'll be able to retire to the beach in 5 years." But I expect most successful trader will want to keep their hand in the game occasionally to keep their skills sharp. I'm currently 'almost satisfied' with a pretty low income. I am at the stage in my life where I can't really think of anything I 'really really really want to buy'. But I can see that it would great fun to fund charitable foundations, research grants for non-traditional science, or anonymously send a promising youth through medical school.

JO

 

[JTrader]

Thanks JumpOff

I agree - Isolation in terms of not being distracted is very important for a trader.

Any more thoughts on financial security/pensions after retiring from trading and the fact that other careers provide security by making provisions for a pension/source of income after retirement?

Cheers

jtrader.