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13 April 2021, 08:32 PM | #1 |
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Trading as a career
Good Morning All,
I’ve seen the “stocks” threads so I know that there are more than a few people on TRF with knowledge about investing/trading, and that is the expertise I am seeking here. The idea of using trading as a career, where I could take a set amount of money and make daily or weekly or monthly trades and live off part of the gains and reinvest the rest, is very appealing to me. Partially because of my interest in finance, but also because of the idea of being my own boss and “living off of my laptop” so to speak, also is appealing. I understand day trading stocks is often criticized, but in addition to that option, I also know that some people actively trade, but use longer time frames (weeks/months) and more than just stocks (options, currency, etc.). Before beginning the process of fully educating myself on trading, I thought I’d see what the advice is out there, to see if this is actually a viable career option? Thanks, Paul |
13 April 2021, 08:42 PM | #2 |
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Of course it is a viable career...all you have to do is be better at it than a few million people who have dedicated every waking hour of their last 25 years studying and investing.
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13 April 2021, 08:49 PM | #3 |
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I would think that someone with an aptitude and desire could make money off of trading. Could you make a living? Maybe, as a lot of factors figure in and what some people call a living others can call a hardship. My initial thoughts would be where would you get enough capital to invest that would make your percentage of gains substantial enough to live off of? Good luck with this.
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13 April 2021, 09:11 PM | #4 | |
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How much can you afford to lose? How much do you need to earn on your trades, daily, weekly, annually to live? Anyone can learn to trade, the question is can you afford to?
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13 April 2021, 09:30 PM | #5 |
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Hi Paul,
I truly wish you the best if you decide to pursue this as a career. As others have pointed out, it’s not easy. I think when a market goes straight up, and to the right as it has this past year, people become euphoric about the stock market. I had a friend (maybe like you) who decided he’d try his hand at day trading. The “lifestyle” appealed to him. I watched the highs and lows as he worked away at it for about 2 years ... He’d share market “insights” and stock tips with me almost daily. He’d always tell me about his big wins, but I rarely heard about the losses, ( I knew they were there as you can’t win them all). Eventually he lost it all ... low seven figures. It devastated him. Bankrupt in his 40’s. I’m not saying this to discourage you, I’m just saying be careful. The market dictates where a stock is going and honestly, trying to beat the market is a muggs game for most. I realize there are successful day traders, but I’d say they are rare. All the best if you try to pursue it |
13 April 2021, 09:37 PM | #6 |
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When markets are near record highs making money trading seems easy and people tend to gravitate towards this option to make extra money or an entire career. Many experienced professionals see this as a sign of an overbought market heading for a correction.
If you are going to, you need to learn a great deal, how to make money in flat and falling markets, hedging, option trading, indicators of short and long term market trends, just to scratch the surface. As said already, people devote their entire lives to this, many don’t do any better than an S&P fund, most do way worse. Good luck if you take this path, it is both difficult and very high stress. |
14 April 2021, 03:10 AM | #7 |
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Thank you to all who have responded so far! Several of your points have me thinking I should pass on this as a business, and explore some other options. I’d love to start a business I could operate online. I’ve already tried selling products on Amazon FBA, and that was pretty much a break even deal, so I stopped that. I hear some people have made a lot of money with a website or blog, and using online advertising, affiliate marketing, and e-books/courses to generate revenue. This would be a lower cost business, both in terms of startup cost and reoccurring expenses, compared to starting a traditional business, such as real estate, etc. Not sure if any of you have any knowledge about running a website/blog for profit? It seems like a low risk but slow growing option.
The points you all made, that trading is competitive, very high stress, has a huge learning curve, requires a ton of initial capital to make the rate of return enough to live off of, etc. is a good warning. Brian, your friend’s story of losing it all is not the first I’ve heard, although losing 7 figures must be especially painful. Brian (beshannon), to answer your questions, I have about $50k capital to start with, and have no debt of any kind. I could afford to lose it all I suppose, but wouldn’t be thrilled obviously. How much I need to earn to live off of? $50k/year pretax or more would be the minimum to start, hopefully growing from there. My issue is my startup capital is relatively low, so in order to obtain the amount of money I need to live on, without requiring a huge rate of return, means I would have to use leverage in order to increase the capital I’m working with. |
14 April 2021, 03:42 AM | #8 | |
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Go to YouTube, search for Income School, and watch a few of their videos. No gimmicks, tricks or link-building. No MLM, no spamming, no email marketing unless you want to, no required commissions. Just great info on how to succeed by giving people helpful answers and info that other sites have overlooked. It is hard work, and it takes a few years, but it is also very possible to succeed at a high level doing this. |
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14 April 2021, 03:45 AM | #9 |
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The internet is filled with people saying they made thousands out of hundreds or millions out of thousands. In reality that money if made at all is made by scamming people with "investing tips". I have a friend who does fairly well but has over a million in capital and a very low cost of living.
Starting and growing a business is never going to be easy or everyone would do it much less an online business. My advice would be to find something you enjoy or are interested in and find a way to monetize that slowly. If it's something you enjoy you are far more likely to wait for the money to come then if you are just hunting for the next big thing.
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14 April 2021, 05:22 AM | #10 |
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14 April 2021, 05:26 AM | #11 | |
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the first rule of trading is to try never to use your own money. if you have to use your own money you need either a big margin line or a friend who can bail you out. without it your position can blow up quick and the margin call will end your career. there are easier ways to make money with similar cap x and less variability / stress. you would be better suited to invest in multi unit real estate rentals.
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14 April 2021, 05:37 AM | #12 |
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Good luck, because that's exactly what you'll need to succeed.
Nobody knows if a stock is going to go up, down, sideways or in circles. |
14 April 2021, 05:57 AM | #13 |
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OP,
You can find success across any venture/endeavour you take. After 26 years across 3 different industries i have found 3 truths. 1. Life and career are like carousels. Sometimes you are on an upswing and other times not so much. Learn to embrace the beauty in both. 2. Outsource as much as you can. Success comes from when you can really focus on what truly matters to drive your business and you can accelerate it with scale but you need the resources to do so. Free up resources by outsourcing. 3. Very few of us have "a calling". Those that do, heard it already. So instead find moments of joy in everything you do. Those little moments often motivate you more than the big hits. This also means you spend more time enjoying the moment rather than chasing hypotheticals and all the stress and anxiety that comes with it. |
14 April 2021, 05:58 AM | #14 | |
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Leverage or not you will either get wiped out slowly or quickly.
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14 April 2021, 06:07 AM | #15 |
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I read a report from a uni up in Canada that studied the day trading craze of the dotcom era. They found that of the people who started trading and self-identified as a day trader in 1999, .3% were still day trading in 2002 (1 in 333). I'd link the study but that link is dead and I can't find the pdf on this computer.
Today reminds me of that era. My advice, don't do it unless you have a large nest egg to fall back on. I work in private equity and have been trading stocks since 1990. It took ~10 years before I consistently made money and felt like I knew what I was doing. I got blanked (lost everything) twice. It's not that much fun either, it gets old real fast. Particularly these days when you have to listen to the political garbage on CNBC, FBN, etc. |
14 April 2021, 06:08 AM | #16 | |
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not saying you can't do it op. but you need to take losses as a trader to survive. without building the base up you just cant take the hits and expect to have enough capital, without risking it all, to generate the return needed to throw off that much earnings. you could YOLO it however. horrible trading strategy.
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14 April 2021, 06:59 AM | #17 |
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Thank you all for the continuing responses! Wow, the more I read here, the more I think I’m going to just reject the idea of being a trader for a living without bothering to invest any of my time in education on it, or invest any of my money in trying it out. Thank you for saving me from that potential pitfall.
I also want to thank TC94 for his advice regarding blogging. I do enjoy writing and am happy to work hard, I just like the idea of being my own boss and having the flexibility of having my business be online. The fact that it seems to have a low startup cost & low reoccurring expenses is appealing too. I think I will try to learn more about this option. Several of you also mentioned looking for my passion and I will admit that although I have several different hobbies and interests, I don’t have a “life passion” as it were. I know people who love what they do so much that they work into their 80’s and die on the job. That’s not me. However, I do enjoy a lot of different things and I also like reading and learning new things too, so even if I ever became rich enough to just sit around and do nothing, that wouldn’t be me, I’d still be learning, reading, traveling, having fun, etc. At this point my desire to have a business/career be online is more about control and flexibility of my time. If I can find something like blogging, or who knows what else, that I can manage and run from my computer and phone, I’d be thrilled with that, so I have more options to have time with family, travel, etc. Any more thoughts on this are welcome! Thanks all! |
14 April 2021, 08:42 AM | #18 | |
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From there you can jump off into their numerous shorter and newer videos with updates as well as their success stories shared by other members building websites. I’ve been a member for 18 months. My first site earns $2k/month at 16 months and I expect that to double over the summer. Sites 2-5 are in various different growth stages. The number of topics you can choose is unlimited, as long as you avoid medical, legal and financial topics unless one of those is your actual day career and you have credentials to prove it. There are people making 6-figures per year writing about frogs. Or cactus growing, electric bikes, cruising, how to maintain your yard...unlimited. |
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14 April 2021, 10:44 AM | #19 | |
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Paul |
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14 April 2021, 11:16 AM | #20 |
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I'm thinking that you are referring to becoming a day trader and trading on your own. My advice would be don't. I have some of the top qualifications (or what many consider the top) in this space, passed all the CFA exam levels years ago etc. and I wouldn't begin to ever think of trading my own stocks as a day trader. Buying a few as a hobby and/or for fun maybe. You just don't have the infrastructure in place to ever trade for a living on your own. You can dabble but, your trading will be extremely inefficient. You'll never afford the proper softwares at least at a decent breakeven. Nor trade in lots large enough as a single trader. Find a professional money manager and if an interest trade some stocks for fun and/or find a trading simulation software. Non of this is investment advice, just career advice. Be careful getting in over your head, especially with complicated investments. You're only one person and can only focus on so much at once. Good luck
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14 April 2021, 12:45 PM | #21 |
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Im no trader but Burton Malkiel's contention was that a blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts. I believe this was replicated by studies as well.
However, the reality is that the market goes up over the long haul. You can actively or passively manage it and you will win both ways. Why not passively manage it, which would likely reduce your risk, and do something else fun. If not, I have known folks that take a few grand and play around to see what they can do. Play around and test the waters, but remember Warren Buffett beat the snot out of the called expert hedge fund managers who were using actively managed funds. |
14 April 2021, 01:19 PM | #22 | |
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Dr Malkiel is the reason I use Wealthfront for my passive portfolio.
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16 April 2021, 05:47 AM | #23 |
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Is there any chance, you’d be able to get a job as a trader with an investment bank? Say, in FX or something.
It’s more fun, and safer, to gamble with someone else’s money. You’d be working with experts and after a few years, you’d know if it was something you could make a living out of. Qui audet adipiscitur! Sent from my iPhone using Tapatalk |
16 April 2021, 09:39 AM | #24 | |
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16 April 2021, 06:51 PM | #25 |
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My advice to you is to read a random walk down wall street.
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