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Do you have to day trade to trade full time?

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nomore4s

Commonsense isn't that common
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Obviously the answer is no but I would like to know is it harder to pull a fulltime income from the markets without daytrading? And if it is harder, how much harder? Are capital requirements any higher?

I eventually want to use trading as my primary source of income but I don't really want to daytrade to do it as I find it quite stressful and tbh don't really enjoy daytrading, so I might as well keep doing what I'm doing if it came to a choice.

Thoughts?
 
Re: Do you have to daytrade to trade fulltime?

As a newb i'm wondering the same question.

What tactics would someone who's only looking to trade, at most, once a week, take?
 
Re: Do you have to daytrade to trade fulltime?

maxiewawa said:
As a newb i'm wondering the same question.

What tactics would someone who's only looking to trade, at most, once a week, take?
Click to expand...

I would imagine trading once a week would make it quite hard to draw a regular income (to live off) from the markets but maybe one of the guys with a long term (weekly) system could give more details.

My question relates to trading daily and off EOD or at the most 4 hour charts (forex), I just don't want to be constantly monitioring the markets.

I know guys like Nick Radge do well without daytrading but he also runs a business.
 
Re: Do you have to daytrade to trade fulltime?

Yes, i think you can. You'd have to hold for more than a few days though and pick your entries and exits well. For example, if you had have bought LEI late last week for 21.47, you could have sold today at 24.50. BHP also got down to around 32, it has opened today > 35. I think you would have to have a larger capital base, something in the vicinity of 150k+ as you'd be buying 1k units+ of a few selected stocks.

I read an interview in one of those share trading mags recently (i'll try to reference it for you, i'm not in office at moment) where a particular trader said that you may not make $ for some weeks, that you have to look at it in terms of monthly or "annual" revenue.
 
Re: Do you have to daytrade to trade fulltime?

My secret (ha!) is twofold:

1. A large capital base. I look to make a return on my capital and compound it over the longer term using a variety of mainly trend following techniques. nothing special with these - just taking a longer term approach to their application.

2. Running a business on the side as a hedge for the tough times when they come along. A friend I play golf with suicided about a month ago, not because he had lost a great deal of money, but because he couldn't make ends meet from his trading. He had placed so much pressure on himself and his family that he opted for the life insurance option rather than loss of face of getting a job.

My advice to people wanting to be successful at this game is to keep your day job, learn to trade using a simple yet robust trend following approach and remain patient. The foundations of this concept are simple to grasp, however its human emotion - lack of patience, tenacity, discipline etc, is where most (the 95%?) fail.

Nick




This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
 
Re: Do you have to daytrade to trade fulltime?

FWIW:

Delta Neutral option strategies go a long way to filling the bill. (with caveats)

:2twocents
 

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Re: Do you have to daytrade to trade fulltime?

Options do require higher capital requirements in general though.

Being involved with HF's that pay you a base as well is always good too, but I think the OP is to be completely independent.
 
Re: Do you have to daytrade to trade fulltime?

Don't 'day trade' as predominant means of income. Probably because I'm crap at it.

But have been 'trading/investing' full time for 4 years, making an income.

Agree with Radge, need a decent capital base for a start.

But you don't necessarily need another business.

Just another source of income. Like a partner.
 
Re: Do you have to daytrade to trade fulltime?

I suggest you look at this from a different perspective.

If you know there is a lot of stress in full time trading (whether it's day trading or longer term) to generate the necessary income for your day to day expense, then why do it?

I just realise Nick had made a post while I'm typing this, but his last advice is the key. KEEP YOUR DAY JOB and in my opinion, only until you have accumulate sufficient capital to generate enough passive income to live on without relying on the profits from your trading account.

Trying to generate enough profit every day to pay for your next bill is EXTREMELY stressful and should be avoided at all cost. (lack of patience, impulse trade to get back that lost, etc, like Nick was saying)

So never expect a "wage" type income from full time trading. Treat it as an investment where you want to use your risk capital (that you can afford to LOSE, and maybe at least two or three times) and then build it up through the magic of compounding.

Now back to your original question on how hard is it to generate "income" from the market without full time day trading, it depends on your capital of course. Nick already mentioned it too, a large enough base so you can practise your position sizing strategy while generating enough profit size.

Day trading usually mean more trading opportunities. If you have multiple strategies on multiple markets, you can still generate enough opportunities and thus profit from it. (Of course, depends if those strategies are actually profitable!)
 
Re: Do you have to daytrade to trade fulltime?

Firstly I don't trade full time and don't wish to.
It would bore me to death.

Any decent business with a decent return would set you back around $500k or more. (Sure there are rare exceptions). A good wage would need to be $150k + or 30% return on investment,most business brokers would agree with this returns.

While volatility is rampant the day traders can have a ball.
When it slows then they have real issues turning profit.

Getting on the right side of the long term market and being able to trade long or short is the key in my view.
Getting on the right side at the right time and sticking with the long term move brings profit in big chunks.

Setting the position will often require many short term losses.However wider initial stops and adding to positions as they mature can bring amazing returns.

I don't know if your a Chartist subscriber but if you are take a look at Radges "Growth Portfolio" and it sticks out as plain as day light. (Even without adding to positions).

So my response is no and like you not preferable.
 
Re: Do you have to daytrade to trade fulltime?

I would ask the question who actually makes a fulltime living out of trading. Very hard gig on a small capital base. You have to realise that every week you pay yourself is a drag on performance. Like another bad trade. Probably contributes to failure more than lack of trading ability.

Nick thats shocking news!! :(
 
Re: Do you have to daytrade to trade fulltime?

Nick Radge said:
My secret (ha!) is twofold:

1. A large capital base. I look to make a return on my capital and compound it over the longer term using a variety of mainly trend following techniques. nothing special with these - just taking a longer term approach to their application.

2. Running a business on the side as a hedge for the tough times when they come along. A friend I play golf with suicided about a month ago, not because he had lost a great deal of money, but because he couldn't make ends meet from his trading. He had placed so much pressure on himself and his family that he opted for the life insurance option rather than loss of face of getting a job.

My advice to people wanting to be successful at this game is to keep your day job, learn to trade using a simple yet robust trend following approach and remain patient. The foundations of this concept are simple to grasp, however its human emotion - lack of patience, tenacity, discipline etc, is where most (the 95%?) fail.

Nick
Click to expand...

Thanks Nick.

I'm in a pretty good position atm and run a profitable business and at this stage I won't be looking to go fulltime in the market for a number of years.

I would also be thinking of 'leasing' my business out which would then let me draw an income from it still and I would also be looking to run business projects on the side - hence part of the reason of not wanting to daytrade as I would have other distractions.

Sad news indeed Nick.

wayneL said:
FWIW:

Delta Neutral option strategies go a long way to filling the bill. (with caveats)

:2twocents
Click to expand...

Unfortunately options is one thing I haven't really had a chance to study but is next on the list but until I have the time to study them properly it will have wait.
 
Re: Do you have to daytrade to trade fulltime?

nomore4s said:
Unfortunately options is one thing I haven't really had a chance to study but is next on the list but until I have the time to study them properly it will have wait.
Click to expand...
Yep, good decision. Options do require a time commitment to learn.
 
Re: Do you have to daytrade to trade fulltime?

Aussiest said:
Yes, i think you can. You'd have to hold for more than a few days though and pick your entries and exits well. For example, if you had have bought LEI late last week for 21.47, you could have sold today at 24.50. BHP also got down to around 32, it has opened today > 35. I think you would have to have a larger capital base, something in the vicinity of 150k+ as you'd be buying 1k units+ of a few selected stocks.
Click to expand...
Agree. I pull a living in this way. e.g. if you have, say, 2000 MQG and it moves around $4 over a few days, that's $8000.
 
Re: Do you have to daytrade to trade fulltime?

Trembling Hand said:
I would ask the question who actually makes a fulltime living out of trading. Very hard gig on a small capital base. You have to realise that every week you pay yourself is a drag on performance. Like another bad trade. Probably contributes to failure more than lack of trading ability.
Click to expand...

The more research I do the more I realise just how big a capital base is needed to be able to do what I plan to do. Not just for trading but for my other business plans.
I already have a decent size capital base but am currently only using around 25-50% for trading but I would probably need to double my base from here to have any chance of making this work.
 
Re: Do you have to daytrade to trade fulltime?

Nick Radge said:
My advice to people wanting to be successful at this game is to keep your day job, learn to trade using a simple yet robust trend following approach and remain patient.
Click to expand...

I agree with Nicks comments that for the majority using a trend following system would be the best and/or most profitable approach in the long run.

However, I would also imagine that most people who are looking to trade full-time would have an issue with the first point ... as its likely they are wanting to go down that path of trading full-time because they either:

a) seriously dislike their current job/career,
b) dont have regular work/income,
or c) they're in a job/career that doesnt provide them with enough disposal income to fund their current lifestyle, let alone provide enough trading capital to get started.

sleepy :D
 
Re: Do you have to daytrade to trade fulltime?

Right on Julia, thats the strategy I use.

Only trade the Big Blue ones eg MQG, CBA , ..these both
moved over $4 this week.
Got to be quick to get in and out.
 
Re: Do you have to daytrade to trade fulltime?

Julia said:
Agree. I pull a living in this way. e.g. if you have, say, 2000 MQG and it moves around $4 over a few days, that's $8000.
Click to expand...

Aww Julia, that's awesome! My problem is i don't hold for long enough.

Julia, how do you get the patience to wait for those larger moves? Do you have a hobby that you indulge in?
 
Re: Do you have to daytrade to trade fulltime?

I used to want to do it... trade full time. But through reading posts here and picturing myself in those situation some posters talk about, I've realised it isn't for me - stress/boredom/constantly monitoring the market (staring at the screen). Most of them I didn't really think about before ASF.

Sure, I hate my job (very much). But at least it is a steady income regardless of whether I have a good or bad day. Ideally, I would like to be in a position where I can make shares and employment (different job - part time only) provide an income. That is my Zen :D

This brings me to ask. What do you consider a comfortable income? Being able to make mortgage repayments and take the kids out to dinner/movies every now and then (if this is you, it's me)? Or doing all that and drive the latest BMW too? My comfortable may not be your comfortable.

edit: Nick, very sorry to hear about your mate. That is terrible.
 

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