 | I very much agree with “not4kids” and his comments. Without knowing much about the potential and maximum downsides (please note that these are two different concepts), “elevating” yourself to the status of a Full-time Day-trader is a rather risk-advancing endeavor. Let me tell you a personal story here.
Several years back, an accomplished Day-trader (with years of proven success records) proposed to manage other people’s assets with a share in the returns. In my view, he has been one of very top trading HHs that I have come across in real life so far. By the way, he was able to be a fulltime day-trader because he didn’t need a paid job to support his family after his parents passed on their business to him (about 10+ stores across North America). He hated managing business because he is not a person enjoying counting pennies, nor like dealing too much with many people. So, he went out to hire manager(s) for each of the stores and set some annual profits goals for them, then he went on to staying as a day-trader.
His past records shown that by hedging currency options he was able to double the money in his accounts every 6-8 weeks, so several parties pooled some money together and gave it to him to “play” in the markets. In the first 3 weeks, he doubled the money in the account, and he decided to take half of the profits and gave everyone their seed capitals back. Then he went on with his day-trading business. The account value went up, down, side-way (not necessarily in this order) to a rather sizable amount… Finally, one day in about 8 months later when the market went against the positions so violently that the account had to be liquidated with pennies left and it was frozen for a month.
The group of people got together and told him to try it again by putting back the seed capital again. The same pattern repeated in about 6 months…
Well, to the end, the group didn’t lose the seed money and they had a lot of fun for the two roller-coaster rides.
The merit of this story is, from what I can tell, that even with very experienced hand, it is still very risky to quit your fully paid job and to become a fulltime trader before you are fully prepared. By this, I mean mentally, emotionally, technically, trading skills-wise, financially, etc… It will not be just you as one person involved, it will be you, your family, and everyone around you. Please think through it carefully before you make the decision to jump…
On the other hand, however, only you can tell if you are ready or not. If you think you are, what the heck, go for it! Who knows, you may be able to reach the promising land sooner than you think.
And, again, no pain, no gain, right?
[If interested and time permitted, I can tell more stories of some of those real fulltime traders I have met and maintained contacts so far. Each one of those persons is very fascinating and pure individual. I very much treasure the opportunities of my meetings with them, online and offline. And, I appreciate all the exchanges and lessons I have learned from these guys. ]
Happy Trading!!!
LK
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