Do you have to day trade to trade full time?

[prawn_86]

Re: Do you have to daytrade to trade fulltime?

Ha.. you mean all those clever fund managers that were buying Allco and B&B all the way down to the bottom?

http://blog.sharefinder.com.au/index.php/2009/02/04/taking-responsibility-for-your-investmen

If you can make 20% pa year in year out that would put you in the league of buffett, soros etc. Doing it with 2 - 3 hours per week would make you infinitely beter than them. Think about it...

Admittedly there are a lot of fund managers that dont perform well, but there are others that do.

You are essentuially saying you want to match it with the best of the best, but only commit a couple hours a week. Please let me know if you ever manage to do this

 

[ThingyMajiggy]

Re: Do you have to daytrade to trade fulltime?

I agree with TH here. If your sole aim is to make enough money to match your wage or even to only slightly increase it you will find it difficult to succeed and imo you are better off working for wages. You would only need 1 bad month and you could be in trouble, let alone trying to grow your capital.

If coming off a fairly low wage base say 35-50k pa I think you would have to be able to earn at least 3x that amount trading to make it a worthwhile and having the capital to do this and be able to cover a few bad months is a problem for most. Running any sort of business (trading included) has a lot of hidden costs and problems.

Thats great, but its not my sole aim. My sole aim is to trade well, which in turn will bring profits, isn't that what everyones "sole aim" is?

I'm still working my normal job, and not quitting anytime soon to jump into trading for a living, its one of those things...what are they called again...oh yeah, goals. no one who begins trading is instantly going to make their weekly wage. I see nothing wrong in having a few goals, to try and reach consistent trading.

 

[Timmy]

Re: Do you have to daytrade to trade fulltime?

# I could have easily just traded the aussie200 from 4pm to 4:30 and made a living off that

That sounds like what you wanted to achieve?
Can you say why you stopped doing this (market changed, volatility reduced, bored, something else)?

4s, sorry to go off topic.

 

[nomore4s]

Re: Do you have to daytrade to trade fulltime?

My end goal is to be a full time day trader.

That's nice Waz but the question was:

Do you have to daytrade to trade fulltime?

 

[waz]

Re: Do you have to daytrade to trade fulltime?

My decision to trade full time is a lifestyle decision, my goal is to live an enjoyable life, not to earn a certain amount of money.

If Im living in some cheap country and all I need to survive is 30k, then that might be my goal for the year. (which I may be able to achieve in 3-4 months)

If I did have 100k, I know I could easily loose half of it in a year, or at best tripple it in a year.

PS. I wouldn't be trading direct shares, Im more into index, currency, commodity trading on margin.

I also don't get that question 'Do you have to daytrade to trade full time?'
You would have to define daytrade and full time first.

If daytrade = short term trading
and full time = 40 hours a week and or you only source of income

Then my answer is 'no'

There is nothing stopping you making just one trade a year and calling that your only souce of income which you spent 40 hours a week for 52 weeks researching.

In answer to Timmy's question:
I was usually only making about -$50 to $200 per day in that half hour window.
Hardly enough to make a living from, I went back to full time work as it was just too risky, this being done on margin.

 

[Julia]

Re: Do you have to daytrade to trade fulltime?

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?

I don't sit there and watch it, Aussiest!
Often time it badly, and give back some profit.

i see no ones mentioned the weeks that go by when one takes loss after loss yet ........

Exactly right. I was well in the red up until the rally this week.

I think how easy it is or isn't depends a fair bit on one's capital base.
Much harder to generate a living on multiple small moves, well for me anyway.

 

[nunthewiser]

Re: Do you have to daytrade to trade fulltime?

Thats great, but its not my sole aim. My sole aim is to trade well, which in turn will bring profits, isn't that what everyones "sole aim" is?

I'm still working my normal job, and not quitting anytime soon to jump into trading for a living, its one of those things...what are they called again...oh yeah, goals. no one who begins trading is instantly going to make their weekly wage. I see nothing wrong in having a few goals, to try and reach consistent trading.

and personally thinks well done for not jumping into a pit which spits out and chews up so many bright eyed wannabe zillionaires

nothing wrong with treading carefully and if more did it perhaps we would see more ACTUAL succesful traders not just internet champs

 

[marcadrian]

Re: Do you have to daytrade to trade fulltime?

If you can make 20% pa year in year out that would put you in the league of buffett, soros etc. Doing it with 2 - 3 hours per week would make you infinitely beter than them. Think about it...

Admittedly there are a lot of fund managers that dont perform well, but there are others that do.

You are essentuially saying you want to match it with the best of the best, but only commit a couple hours a week. Please let me know if you ever manage to do this

Hold up son, I said 2-3 hours a DAY.

Are you telling me there is no one on this forum making 20% pa returns? Surely anyone trading through 2003-2007 with a decent ASX system should have far surpassed that. Even doubling up on the index would have smashed that during those years!

 

[nomore4s]

Re: Do you have to daytrade to trade fulltime?

Thats great, but its not my sole aim. My sole aim is to trade well, which in turn will bring profits, isn't that what everyones "sole aim" is?

I'm still working my normal job, and not quitting anytime soon to jump into trading for a living, its one of those things...what are they called again...oh yeah, goals. no one who begins trading is instantly going to make their weekly wage. I see nothing wrong in having a few goals, to try and reach consistent trading.

lol Sam relax. I'm not saying you're going to do anything or that you shouldn't have your goals for trading, all I'm saying is you might need to shift the goal posts a bit, earning what you're earning now might not be enough if you are trading fulltime.

There are other things to think about - Holidays (no income while on holidays), getting sick/injured and not being able to trade, a bad couple of weeks/months with negative returns, having money put aside for tax, trying to grow capital, general business expenses etc, etc.

 

[ThingyMajiggy]

Re: Do you have to daytrade to trade fulltime?

lol Sam relax. I'm not saying you're going to do anything or that you shouldn't have your goals for trading, all I'm saying is you might need to shift the goal posts a bit, earning what you're earning now might not be enough if you are trading fulltime.

There are other things to think about - Holidays (no income while on holidays), getting sick/injured and not being able to trade, a bad couple of weeks/months with negative returns, having money put aside for tax, trying to grow capital, general business expenses etc, etc.

Yeah, I am relaxed, you guys are quoting me and saying these things making it sound like these are my intentions. Then saying I am making the assumptions?

I 100% agree that earning what I earn now, might not be enough in trading full time, but that as a goal NOW, whilst still working my regular job, is a reasonable goal I think, and as I said in my original post, I can move on from there, my "sole aim" is trading well, with consistency.

Anyway, enough of me, back on topic.

 

[nomore4s]

Re: Do you have to daytrade to trade fulltime?

I also don't get that question 'Do you have to daytrade to trade full time?'
You would have to define daytrade and full time first.

lol, fair enough.

By daytrade I mean short term trading, not holding overnight etc etc - standard definition of daytrading I would have thought.

Fulltime is probably more open. To be able to draw a decent income - sole means of employment(ie not working for someone) but doesn't have to be sole means of income. Decent income is obviously going to vary a bit from person to person.

 

[The_Bman]

Re: Do you have to daytrade to trade fulltime?

I didn't believe you need to be a day trader to trade full time i.e. derive an income primarily from trading.

However, I'm now assuming to derive the income you need to manage many trades for short term returns or have many positions for long term growth and cash them in like term deposits.
The question I have for those who have (or say you need) a lot of capital is how would you apply it to derive the income?

Seems to me by its nature, if you need to pull ~$10K a month out you need to spend a lot of time at the screen.

*Admits have done no research into either day trading or trading strategies with large wads of cash *

 

[bonkerrs]

Re: Do you have to daytrade to trade fulltime?

By daytrade I mean short term trading, not holding overnight etc etc - standard definition of daytrading I would have thought.

Not holding overnight. Isn't that called Intra-day trading

# You can turn into a bit of a social recluse (your friends are people on forums that you have never met).

Friends that are not on the internet! Man, that's sooo 80's!

 

[prawn_86]

Re: Do you have to daytrade to trade fulltime?

Hold up son, I said 2-3 hours a DAY.

My bad, would help if i could read

Obviously it is possible, but to do it consistently is the question.

 

[waz]

Re: Do you have to daytrade to trade fulltime?

The reason why I need to a lot of capital to make enough to earn a living, is that most of my trading is derived from scalping/arbitrage.

When you are scalping you are only going to make a very small percentage gain. Half my trades are within 0 to 1% and the rest Id be happy for up to 3%.

So If I only had 10k and made 5% for the week with approx 200 trades, thats only a profit of $500. Hardly enough to quit my full time job and rely on it as my sole income. What if I dont make any money at all that week, or loose 500. Im screwed.

Whereas If I had 100k, with the same 200 trades earning 5% for the week, I would have made 5k. Now I can comfortably quit my full time job. At the same time I could also loose 5k, but with 95k still left over, I wouldnt need to keep my eye on seek.com.au just in case.

 

[The_Bman]

Re: Do you have to daytrade to trade fulltime?

Exactly, to derive your income you're trading a lot and most likely everyday.

And assuming the average person would need ~$13K Gross per month for a medium family with mortgage etc you would need ~$800K trading capital on the assumption you can return 20% (Twice All Ords)

So coming back to Nomore's question, what would the capital and trading routine for someone living off trading.

There would have to be a number of constraints:
- Ensure alternative income is available
- Save for the bear
- Minimise debt (no mortgages etc)
- Minimise emotional risk (e.g. family stable, no large expenses other rely on e.g. education etc)

 

[Mr J]

Re: Do you have to daytrade to trade fulltime?

The less often you trade, the more capital you will need. Daytraders can making a living with a smaller capital base than swing traders, and a much, much smaller base than longer term traders.

You do realise that there are hundreds (if not thousands) of fund managers (and private investors) out there who do this 40+ hours a week and cannot even get these sort of returns?

I think you are deluding yourself.

This is a really silly statement. A manager of a decently sized fund plays a completely different game to a small retail trader. I could achieve far better than that with less time, but give me 50 mil and my return will take a dive. Apples to oranges. There's also the fact that many fund managers aren't skilled, or handle amounts too large for their skill.

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.

What's your point? To suggest that it's hard to make a career out of 10-20k? Sure. 50k? I consider that very adequate. 10-20k can get it done if we don't have to worry about paying bills (i.e. you have plenty saved for expenses, partner paying bills etc).

Seems to me by its nature, if you need to pull ~$10K a month out you need to spend a lot of time at the screen.

Depends on capital and trading ability. Some people may need to work 60 hours a week to make that much, others may only need to work few hours. It varies significantly even with the same amount of capital.

As for myself, I don't daytrade for a living fulltime, I just daytrade fulltime. I want to make a living, but I need more success before I'm comfortable making that claim.

 

[marcadrian]

Re: Do you have to daytrade to trade fulltime?

Yes, it needs to be remembered that large fund managers can't often just "go to cash" when the bad times roll. If you are managing 500m in funds, you can't just pack up bags and tell your investors you are sticking it all into the safest investment possible. They are expecting that you will find the best shares that are outperforming the market, even if the market is tanking by 50%. Point in case being most equity based funds over the last 2 years.

Being small enough to have the flexibility of applying a simple on/off valve for certain trading systems puts us way ahead.

 

[Temjin]

Re: Do you have to daytrade to trade fulltime?

The reason why I need to a lot of capital to make enough to earn a living, is that most of my trading is derived from scalping/arbitrage.

When you are scalping you are only going to make a very small percentage gain. Half my trades are within 0 to 1% and the rest Id be happy for up to 3%.

So If I only had 10k and made 5% for the week with approx 200 trades, thats only a profit of $500. Hardly enough to quit my full time job and rely on it as my sole income. What if I dont make any money at all that week, or loose 500. Im screwed.

Whereas If I had 100k, with the same 200 trades earning 5% for the week, I would have made 5k. Now I can comfortably quit my full time job. At the same time I could also loose 5k, but with 95k still left over, I wouldnt need to keep my eye on seek.com.au just in case.

Do you even realize that if you could achieve that kind of phenomenon return consistently over many years, you will be regarded as ABOVE the legendary?

Going back to Tech/A's previous thread on wealth accumulation idea, try using the compounding equation on that kind of return and reinvest all profit. Do this for 5 years and look at the numbers.

If you feel you have the confident to do this, you need to think OUTSIDE the square. Compound your profits and use the accumulated capital to be financially free.

I see too many people who want to quit their job and trade full time and hope that their $50k capital will make their dream come true. They want instant gratification and never take full advantage of compounding.

Ok, I know you were making up the figures (5% per week), but you get the drill. I hope.

 

[tech/a]

Re: Do you have to daytrade to trade fulltime?

What's your point? To suggest that it's hard to make a career out of 10-20k? Sure. 50k? I consider that very adequate. 10-20k can get it done if we don't have to worry about paying bills (i.e. you have plenty saved for expenses, partner paying bills etc).

$500 to Joe if you can show 12 mths trading statement returning an income of $50K + ---any less and thats hardly a career.(Not a one off win but some sort of consistancy.)
Near impossible in my view,I'm sure I'm not the only one who would like to see a 20-50k capital base returning a career!