Becoming a Trader

[Spicymoose]

I am going to be leaving my job soon, and was wondering how difficult it is to get into trading.

Assuming I was willing to put in lots of effort reading books on the subject, discussing issues with people who know the subject, and doing lots of research, what are the possibilities of potential income? What is the learning curve to get halfway decent at it?

Also, what kind of bankroll is necessary? I picture trading kind of like poker in the sense that there are EV+ and EV- decisions, but also variance in every trade. If you gave a decent trader $2000 to work with, and had him researching/trading 40 hours a week, what could he expect to make with that? What if he had $20k?

Thanks,
Spicymoose

[RedJoker]

What time frame for trading are you talking about, daytrading, swingtrading, etc? Is this forex or the stock market?

Who will you be discussing the subject with? You will need at least 3-6 months of solid reading/learning before you start.

You will need at least $25k to get started, and expect to lose a lot of this in your first year and have to reload. Most daytraders trail the market/lose money/go bust.

Some do succeed, I don't want to sound too negative but just be aware that it's not an easy thing to do. You have to pay lots of commissions and are in a higher tax bracket.

FYI there were a few threads about daytrading in the past, try the search function to see some more opinions.

[JJay1231]

[ QUOTE ]
I am going to be leaving my job soon, and was wondering how difficult it is to get into trading.

Assuming I was willing to put in lots of effort reading books on the subject, discussing issues with people who know the subject, and doing lots of research, what are the possibilities of potential income? What is the learning curve to get halfway decent at it?

Also, what kind of bankroll is necessary? I picture trading kind of like poker in the sense that there are EV+ and EV- decisions, but also variance in every trade. If you gave a decent trader $2000 to work with, and had him researching/trading 40 hours a week, what could he expect to make with that? What if he had $20k?

Thanks,
Spicymoose

[/ QUOTE ]

I hope your not leaving your job and then going to go straight into trading for a living? I did this and it was a HUGE mistake. Do not leave your job if you cannot replace your income from trading, and you will need A LOT more than $2000 I can assure you.

To become a very good trader (depending on the individual) can take years of trial and error, and using and experimenting with all different trading techniques.

You also need to know what type of trading personality you have, ie; short term, long term, risk averse etc etc. and I would strongly suggest you paper trade first for at least a few months to get a feel of where you may be more comfortable.

There are hundreds of trading books and Ive read my fair share but for a begginer I can highly recommend these;

Trading For A Living + Study guide, by Alexander Elder
Come Into My Trading Room + Study Guide, by Alexander Elder
Trade Your Way To Financial Freedom, by Van Tharp.
Profiting In Bull and Bear Markets, by Stan Weinstein

a technique that is a personal favorite of mine is whats called "Candlestick Analysis" (its not what you think) and can be applied to any market and time frame.

A really good book that I can recommend for this is "High Profit Candlestick Patterns" by Stephen Bigalow.

For trader psychology you may want to check out "Trading In The Zone" and "The Disciplined Trader" both by Mark Douglas.

and finally the grandaddy of them all and an absolute MUST read for any trader is "Reminiscenses Of A Stock Operator" by Edwin Lefreve. This book should be in every traders library and will show you what you can expect in this business. It was first released in 1923 but it's lessons are timeless! a classic.

If you want to start trading I seriously wouldn't start with anything less than $20,000 for shorter term trading and $50,000 or > for longer term and this is assuming your looking to trade stocks. Dont trade with money that you cant afford to lose to begin with becasue this is when you will be making the most mistakes and mistakes cost money.

Anyway GL with it, because becoming a successful trader makes becoming a winning poker player look like childs play, and I'm only being honest.

[xx44]

Unless you are EXTREMELY well capitalized, a prop firm would seem like your best to move to learn about trading. Books wont even get you close to what is learned by exdperience. A prop firm would give you the opprtunity to learn from someone, and the ability to trade their money, with no risk to you. Of course the current state of the mkt dictates what their current hiring policy is (remember, volatility=profits), but I assume now wouldbe a good time.

The downside is that you would be trading very small to start until you can prove yourself, and you receive @ 50% of the netprofit. Either way, you should explore that.

[pig4bill]

They're not going to hire/back you unless you can show them a track record, right?

[xx44]

[ QUOTE ]
They're not going to hire/back you unless you can show them a track record, right?

[/ QUOTE ]

Hardly anybody goes in with a track record, or experience for that matter. They look for people they can train via their own method. Obviously if they give you the opportunity and dont perform while trading small (100 shares) they wont keep you.