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thinking of a career change (day trader?), need advice from the investors

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Posted: #1
I own my own business, it does well, but I don't love it, and I don't have a dream of being the "best in my business" one day.  I think having that dream is crucial in life, and I am starting to think that being "the best in investing", specifically the stock market, could be something I would be interested in achieving.  The reasons are many.
 
This is interesting, because I have no stock trading experience, but trading interests me, let's face it, its legalized gambling without having to watch some asshole brick a free throw at the end of the game. What attracts me most is that most people I know don't even discuss stocks anymore : its a dead time, its a recession, and what better time to get in than now.
 
So, I have an acquaintance who is a day trader here in Miami.  I know he does well, and I am the kind of person who can pick up pretty much anything, not so much as through talent, but through obsessive hard work and discipline.  Combine this with the fact that I am a gambler at heart and very good with numbers, and I have also always had a fascination with stocks, although just no time to dive head first into it.  I am a full believer you must dive head first into any business venture, to go half way is just stupid.
 
If I gave up my business, I could roll out with about 100K to start with in liquid capital.  My business now yields me a very nice salary, its comfortable, but most of the thrill is gone, and I do not want to do it forever.
 
Day trading, besides having a friend who I could talk to, interests me because it seems obsessive and very risky.  I am no fool, I started a great business from scratch that is improving everyday, you can't do that by being stupid.  But in order to make a solid living with a 100K bankroll, it seems day trading would be the best route because every day, you are either winning or losing, and this would be no hobby, it would be a career change.
 
To be honest, I know nothing about trading.  So please give me your two cents on this issue, because I am very interested in the concept and believe it might fit my skill set.  I do have a law degree, but again, I love research and numbers, and yes, the thrill of the action. 
 
Clearly with a good business going, I could even wait to begin until 2010, with a clearly planned exit strategy, and time to understand the new trade, which is clearly crucial. 
 
Any thoughts, opinions, advice, ARE NEEDED ! ! ! !    
 
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Posted: #2
What kind of business do you have right now?

Thats my first question with MANY more to come.

Not sure if you have read the forum here but a few of us DID daytrade for a living in the past, so i am sure we will have lots of horror stories and insight to share.

With the question, give detail of what the business is, the salary you make etc etc..
 
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Posted: #3
i did it for almost 3 years...first 6 months didnt make a dime, next 16 i did great, last 6 very little

its not for the faint of heart.

-every BD you go through will nickel and dime you on everything
-everything is negotiable, payout, bank required, fees
-you will lose some hair, become irritable, run people over getting out of the subway (oh wait, that was me)

it took me a while to learn, but the big boys rule the market, there is usually one order ruling a stock on a day...a buyer or a seller. fing out what type of order it is and who is the buyer/seller and then follow them

i would also advise to trim your universe to 5-10 stocks tops...know them inside and out, know the players, know the news, listen to the conference calls
 
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Posted: #4
Wallstreet---I own and manage a small law firm, which includes marketing, business management, hiring, AND going to Court and winning a bunch of cases on a daily basis.  We do criminal defense and nothing more. Its much work, much stress, but we are good at it.  However, I feel there is a ceiling for profitability based on the nature of the cases I handle, geography, etc.  And, I just don't see myself doing this forever, although its been great starting it up, much satisfaction.  Salary over 100K easy, mixed assets in the business itself, so probably closer to 200K a year.  Over the last 3 years the firm growth has been impressive, but it must plateau at some point because of some basic limitations within the industry.  There are not that many ways to pull out and take less money, mostly because people come to my firm for me, so I am a major part of it, otherwise I could just manage it from my desk, but its not really possible.  I could hire an associate, but he or she WILL NOT be able to do what I can in Court.  If they could, I could not afford them.
 
I had no idea you or anyone else day traded, but I knew you and others were the right people to go to, and let me assure you, your opinions and insights are MUCH appreciated.  I really want to match my skill set, I am a hustler for sure, born gambler for sure, which matches up incredibly well for a criminal defense attorney.  Don't get me wrong, I could make a very good living doing this for the next 30 years, I just don't see the movement, I get bored very easily, and I like playing with numbers, trends, etc.  How I ended up in my industry is a long, boring story, but lets just say it was not a lifelong dream, or even a crackpipe dream, I just fell into it because I have a certain personality and interest in non-mainstream things.  I was going to quit law school, then I met these rebellious, very strong minded people and fell in with them.  Not sure if that makes sense, but I suppose what I do is unique, and I have a unique ability to deal with certain kinds of people.
 
KOAJ---great advice, as noted, I knew this was right place to ask these questions.
 
What do you guys do now?
 
I think the least of my problems would be the faint of heart issue, not saying it to be a wiseass or anything, but convincing people to let off a child molester or murderer certainly puts hair on your chest.  Not that I choose to defend certain kinds of people, but everyone has a right to an attorney, and I have horror stories you would not believe of people who are in prison for life for the wrong reasons.
 
Anyway, back to the investing advice. 
 
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Posted: #5
So do you have partners with this endeavor or is this a sole venture? If you had partners I would advise you to schedule a few weeks off, vacation like and if the daytrading firm has an office, similar to what Koaj and I worked, to go there and observe for WEEKS..not a day, not an afternoon...for two weeks without making a single trade..

Then you can see if you think it is realistic and worthwhile.

If it were me I would work where you currently do and try to save enough that you could RETIRE, meaning scrape it for a few years and amass as much wealth as you can, THEN when the money is in the bank and you are clear, retire..or sell the business.

I imagine there is no goodwill existant if this is your own operations..so you couldnt sell it at all, is that accurate?
 
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Posted: #6
veech - faint of heart should be inferred as something else. dealing with sickos and perverts is one thing but this is different. if you lose the case you still get your fees and can go home to the wife or kids and have a good dinner (maybe)

this is a different world...my game was different than building small positions for days and days. i flipped large amounts of shares for pennies all day. 7k shares for .01 = $70. make 80 trades, win20, lose 15, flat 45 minus fees and you made about $300 X 250 trading days = 75k a year

its draining...if you need the cash, it doesnt work well for guys in relationships, w/ kids, etc

its an emotional roller coaster...think of dan akroyds speech to eddie murphy before entering the merc in trading places
 
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Posted: #7
wallstreet---my wife (the family accountant) indicates my firm does have goodwill, which she briefly described as an intangible valuation such as a branding or logo and other sources of business.  I have a partner, we are 50/50 across the board.  I really like your idea of the 2 week period, because this is clearly a serious decision that must be thoroughly hashed out.
 
How much is enough to retire?  I know that is a great question people struggle with, but I don't see me making that for at least 20 years, do you?
 
KOAJ---you are right.  I do get to go home, even if the sickos don't, and that is probably one of the best parts of my business.  I know that stomach wrenching ONE AND ONLY feeling of losing a shitload of money in one day, I can only imagine it times 50, because that is what day trading sounds like if you miss.  And I don't know if anyone is ready for that.  I am recently married and will likely try to have kids fairly soon, so it sounds potentially disastrous for that.  Wallstreets idea will likely shed lots of light on this for me.  Obviously part of my job today has to do with the rush of things, going to trial, beating the government, etc.... but playing with your money, thats no joke, for sure.
 
Wallstreet---one last point, there is not much intangible worth, but some, one could certainly sell what we have built, but as noted, 80% of it is based on us as people.  Its a very personal based business.
 
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Posted: #8
The comment I made wasnt a negative, rather just a realization concerning Goodwill. Since you are a 50/50 partner versus say a 10X10 where the income generation could be substituted by another party, that would be goodwill. With this, if you go there is a liklihood that the income could go to ZERO..say versus a Subway restaraunt that could and would continue regardless of if you were running it or not.

So even though your income is 100-200k, the goodwill portion, in which you would value a sale, might be 50k max..meaning if I were looking to buy the business, why wouldnt I just open my own shop if I had the skills you did?

Yeah Koaj alluded to it that every single trade could cost you a TON of money if it goes against you. I am a very low stress guy, I dont get worked up and there were MANY MANY days I didnt sleep well thinking about an open trade I had or a bad day I had..it is a very tough racket..it can be HUGELY rewarding, like no other job I ever had but it is way too inconsistent to work for me longer term.

In the market you are merely a bobber in the ocean..the market tosses you and it can toss you for no reason other than it wants to.

I LOVE the market..I watch every day and have that passion and skill and I can still get crushed and crushed and crushed.

I would suggest what I mentioned, go to the site and watch for TWO weeks..and see if the kind of business this is would work for you.
 
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Posted: #9
KOAJ is right as usual, Veech.........big money day trading on Wall Street is made by big boys who move in tandem and have an arsenal of billions and billions of dollars.
 
Get in front of that cartel, and you'll get your ass handed to you in brutal fashion.
 
You got to do what they do...........they always win (or should I say, win about 99% of the time).  It is impossible to argue with the market regardless of fundamentals, technicals, yadda yadda yadda.
 
The golden rule is he who has the cash rules.  Period, end of story.
 
Money can be made, but it ain't going to be big money unless you got access to billions of dollars and know inside info.
 
If you make a lot of money with your law firm, stick with it and trade sparingly to "supplement" your real job.  That's my advice, man.
 
There are more lies told on Wall Street every day than in every single casino the world over put together.  Big money on Wall Street is vicious and will stomp anything in its way.
 
Just agree with the big boys, get in....get out.....be happy with gains.
 
BTW, where is our girl Tati Golovin these days?  I miss her.
 
Cheers
 
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Posted: #10
claycourt---good to hear from you, thanks for checking in!  
 
Tati had some kind of injury and then surgery, I am sure she is recovering nicely in her million dollar condo on Brickell Avenue down here in Miami.  I keep hoping to run into her one day, I will get an autograph for us if so!!! 
 
Stocks are intriguing, the market, etc...  Its just something I have always wondered about, investing, don't think I will be able to say I lived my life to its fullest until I get into it somehow.  I do appreciate your advice and experience, and what you say makes perfect sense.
 
I had a good friend who quit practicing law then took his Series 7, or some exam like that, now he works investing people's money, I think.  I need to call him too.  I just think practicing law sucks, its tiresome as hell, and I think there are ways to make just as much money, if not more, without having to go to Court everyday to fight.  Even for people with aggressive personalities who love to talk, its tough and gets old!!
 
I think most lawyers get out when they can.  Several family members, once they have enough coin from practicing law, they quit.  It takes a good 20 years to build that coin however.
 
If I could go back in a time machine, its really business that interests me, not law.  I've had a great time building this law practice because of the business aspects and decisions I make everyday, not because of the law part.  I should have gone to business school instead, just find it more interesting at this point, and I almost dropped out of law school it was so boring and the people sucked ass.
 
I think I could be a tremendous asset to a business, not sure how to go about finding that job, or even what that job could be, or perhaps I should go talk to some investment people, not even sure what jobs they offer. 
 
Trading on the side sounds nice if you know what you are doing.  I really don't know anymore than the average dude, I spend all my time and energy on the Courts and my business, I really want to change that.  I would give up my law degree tomorrow and never look back to do business or some type of investing.
 
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Posted: #11
I find it cool that some of the people I have enjoyed conversing with the most here on Covers somehow found and responded to this thread.  Thanks fellas.  
 
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Posted: #12
Not a problem, Veech.  Good luck.
 
I'm nothing but a blue collar average sh-thead in this screwed up world, so I only know from my limited experience.  Back in the late 90s (like everyone else), I made decent money trading tech, and, like  the true dumb ass that I am, gave every cent of it back to the big boys from 2000 to the middle of 2002.
 
The severe lesson that I took from those years was this.....I ain't jack shit to the market and those that run prices up and down.  But what I did learn was to be disciplined with trading (brutally disciplined), take fractional gains, and bail my sorry ass out of winning trades before the big money decides to take something the other way.  Since 2002, I've done "OK," but that's it.  Enough to beat the SP average, but chicken shit chage compared to what the big players can make.
 
I just flat out don't believe it's possible over the long run to make BIG money trading unless you got these 2 things:
 
1) Billions of dollar access
and
2) Ability to work in collusion with similar syndicates
 
But hell, man, I hope you do well.
 
And if you see Tati Golovin, man, try to get more than an autograph!!!  What the hell do you have to lose?
 
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Posted: #13
is it true that in the long run if you invest in your money in ETF funds, you will earn a higher gain than most traders?
 
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Posted: #14
theveech,

I have to say that I dont think you understand the DIFFICULTY of trading for a living.

You dont like what you are doing, but you havent done what you are considering.

I would seriously and I mean seriously go to the shop and watch for a good two weeks..watch your pal and others who are also trading, tell the firm you have 200k but are new to trading and would like to observe for a few weeks..

Having gone through it myself, it takes someone with extreme ambition, tons of dough and some serious mental problems to make it being a lone trader. Now you can go and work for a firm where you prop trade using their capital, that might be a better plan..or you could go to a place like Bright Trading and go through one of their seminars and see if you could do it after listening.

The 7 and 63 and 55 are required to trade in most cases, especially on your own account..and they arent easy exams to pass.

I dont want to dissuade you but I would say you should grind it out doing what you do, see what you can do to expand business and try to get out after being able to retire rather than throw away the business you built to go and trade.

It is a TERRIBLE living..it can be awesome and it can be marriage breaking..it is NOT for most I can tell you that.
 
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Posted: #15
wallstreet-----I categorize my frame of mind right now more as talking to people about alternative careers, including but not limited to investing in general, possibly trading and certainly other things.  I completely appreciate, and I am starting to understand, trading is maybe one of the toughest jobs out there, and it very well is likely not right for me.
 
Its weird, I just turned 30, just got married, business is doing well, I just feel like every 3 or 4 years, change must be made to increase income, and I mean fairly drastic change, and this theory of evolving and never getting comfortable has worked quite well so far, I think most people just give up and convince themselves they are satisfied.  Better for us!!
 
So I will likely make a big change within my business, possiibly changing my role within the structure in order to try to bring in more business, or something like that.  Complete career change is much tougher, but people must evolve, I get bored easily, and I do believe over time people gravitate to where they REALLY belong, I don't think most people know that at 18, or 21, or 25, or even 30.  I suppose most don't undergo the self-examination process as often as I do, maybe its obsessive, most likely.
 
I would love to understand "the markets", I need to in order to feel complete and that I was a productive member of this society.  Not necessarily as a day trader, but I am an extremist, and I do believe the only way to master something is to throw yourself into it with no lifevest.  I would never do anything without doing exactly what you recommended.....watching for a long time, we are talking about potentially a 2 year "escape plan", that's the smart way to make any change.
 
For now I am just talking to friends and family, but everyone agrees there is a definite ceiling as to what any practicing attorney can make, and I do not think I like that very much.   
 
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Posted: #16
veech - if you have the cash, you're better off buying into a daytrading firm instead of becoming a trader

trading everyday is a game of liars poker and one the little guy never wins over the long haul

if you own the shop you can make nickels and dimes on every trade in and out and sleep at night
 
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Posted: #17
 
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Posted: #18
Interesting thread. Veetch - I'm considering it too....
 
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Posted: #19
Just saw this thread.  Some very good advice shared.  I had done very well trading my 401K the past several years, and thought I would try it full time.  So, I just started investing fulltime a couple of months ago.  Not trying to day trade, per say, but find distressed stocks that appear to have upside potential without filing BK.  A lot of distressed stocks these days, down approximately 90% of off their 52 week highs.  I have been using pharmacueticals and financials mainly, and have been about 50/50 gains and losses so far, while still holding a few positions.  As the exprerienced guys have stated, I have found that discipline is the number one must for me.  I have held winners and turned them into losers by trying to make a few extra bucks.  Sooooo stupid.  As someone once said, "You can never go broke, taking a profit, now matter how small".  I have found I am pretty good at choosing a purchase price, but have trouble getting out.  I have to correct that, or I do not have a chance to be successful.
 
Also, as KOAJ stated, focusing on a few stocks will make you a much better trader, as you will learn the trends and the players, which is key to success.  Also, something else I do, is try to trade stocks with decent volume, so it is not to difficult to get out. 
 
I stongly considered it for almost two years before taking the risk.  I have an engineering degree and 20 years work exprerience to fall back on, if I cannot make it.  That was a huge factor in my decision. 
 
Best of luck.  I am interested to hear what you decide. 
 
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Posted: #20
lostball - exiting a trade is the hardest thing to do

if you sell, it runs, if you hold, it crashes - never fails

just take your profit and move on
 
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Posted: #21
And hindsight is always 20:20.
 
The truth is that none of us knows......not even the ones who manipulate the market-----they don't even know.
 
Koaj is right.....take your money and move on to the next thing.
 
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Posted: #22
Thanks, guys.  That does seem the way it usually goes.  Do you put in stop loss, of say 3 or 5 %, to limit your risk?  I figure you would adjust if the stock rises in value instead of decreases.  Also, do you pre-establish your exit point on the positivie side soon after your purchase? 
 
I told a friend of mine, I thought it was best to establish a plan during the hours the market is closed, when you can think less emotionally, and then execute the plan when the market is open.  Just wish I can follow my own advice sometimes.
 
Thanks for your guy's input.  You cannot beat experience.
 
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Posted: #23
Thats not true the little boys can play it too, but you got to have a creative stragey. By that I mean you can't go out in a herd trading the same stock everyone else is.  Long-term investor ok, but it all comes down to personailty for short-term trading.  The techniques you use in short-term trading have to fit your character in using them.  Certain things come closer to your instinct at certain times of the market.  Like for example you are reading charts, or pinpointing weakness somewhere when the market falls.  You have to study every move and every action.  Each trade you make should be like a business contract.  It should look as if you were a asute merchant buying and bartering fishes for wine.  You got to have a hungar for digging into everything for the eternety of your life.  Elliot waves, propertiey ratings, betas, alternative stops, etc.........all these things got to fit the picture.  The forces of nature, and the gravity that comes into play.  You have to use no mind too in trading like meta-physics, and there can't be emotions invole.  If its right than its rights from the start. If your wrong than its part of the game. Or there is the other wrong mean the quality of thought wasn't all there. Sun Tzu says the war is won before its fought. That simple.
 
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Posted: #24
Agreed that "the little guy" can make money day trading, but no way in hell is it going to be "big money," which is exactly why it is best to keep your day job if it is giving you a good return.
 
It's not that "the little guy" is a dummy, but it's more that the big money players, I mean crime syndicates, work in collusion with billions and billions on a daily basis and have access to inside info.  In other words, they cheat.  No way for "the little guy" to outperform cheaters unless he becomes one.
 
Plane and simple.
 
 
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Posted: #25
Veech -my man in Miami -
 
I was a partner in a money -management firm for nearly 5 years in the late 90's .
I was the front man with the capital and when I sold , I took some of my cash and day -traded ... I took a 20% hit because I over-traded ..
 
Know 5-10 stocks in a particular industry -that's great advice .. having some industry contacts would be helpful..
 
KOAJ , Clay Court and WSC are Wise men with their comments ..
shoot me an email if you want to know more about my personal experience ..
Definitely paper trade before you actually do it -
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