Trading as a career

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bigrednich

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Post Number: 2
Registered: 02-2007

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Friday, February 02, 2007 - 03:19 pm:

Hello all!!

Not sure how this will go but I’ll put it out there! I’m starting my career as a full time options trader…(hear me out before you start thinking of ways to fleece me :-)

I got out of school, and went to Uni at UTS for 6 months doing business. After a few work experience stints at investment banks, I decided there was little point working 16 hours a day making everyone else richer.

I then went to Jamie Mackentyres 21 CA (limited use, but a step in the right direction) I have also used material from Daniel Kertcher, Nick Hallic, george fontinalls and a few other education “guru’s”

I went up to work in the mines last year building up my trading capitol, and now have moved back to Sydney with my parents to start my apprenticeship options trading. I intend to learn everything I can full time, as the biggest problem with the markets is how time consuming the initial learning stage is. Full time trading I feel cannot be approached as something to start after work and build it up, I’d just never get the time to focus on it as a career, it would stay a hobby.

I am 20 and intend to treat trading as a 5 year apprenticeship with the view of knowing what im doing (I.e trading for a living) at 25. I am not expecting quick profits or to make the Fortune 500 tomorrow. I figured a uni degree takes 3-5 years and set me up for a job for the rest of my life, if I put 3-5 years into pure study of the markets I would be one up (and its something I’m passionate about anyway)

I have started to dissected things I need to learn and do..

Technical analysis (charting, indicators, etc)
Fundamental analysis
Learn each of the strategies well for all markets (bull, bear, neutral)
Volatility (the greeks, delta neutral positions etc)
Paper trade like crazy
Back test technical analysis strategies with MetaStock

To do this I have many DVD’s from the courses that I’m watching and re-watching. Books and all the information on this forum, all the posts, all Colins points on the site.

I am just wondering how many Full time or successful Options traders there are left on this forum?? I have been using IC for a while, but never seen the forum till now. Any options traders!! Put your hands up, cos I’ll need your help in quantity and quality soon :-)

If there are any traders that have suggestions or comments to make that will help me out or influence the direction of my trading career let me know.

Also the US options market kills Australia for liquidity and choice, why does anyone still trade the Aus market?

My brother trades CFD’s but Options still seem more versatile in their construction of strategies than CFD’s I.e. butterflies and ratio spreads etc etc. CFD’s seem very “flavor of the month”

Any comments or advice would be greatly appreciated. Thanks to everyone for their helpful posts I have read so far, everyone is doing a great job!

I guess what I’m looking for is if any successful traders were in my position - 20, passionate about Options trading, done a few courses, earning about 10k ish each year passive income, with a trading bank of around 30k

What would you do!!!!!!!!!!!!!!! :-)

niK

ohkoolnutz

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Post Number: 483
Registered: 10-2005

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Votes: 0


Friday, February 02, 2007 - 08:37 pm:

I have no knowledge of options but I recognise your viewpoint.

I am 29. I spent my whole life saving money (in a savings account) as taught by my low-risk parents, got screwed when they converted the Mark into the Deutsche Mark, studied for 10 years (BA, BS, MBA) which cost $200,000+ and lots of time, learned afterwards that nobody gives a shit about degrees* and the people working above me are on average as incompetent as the people working below me, always worked 40 hours (also while studying full-time), lived in three countries, speak two languages.

I work a job currently I can do in my sleep because once I have done something for 2+ years its not challenging anymore. I do supply chain management mostly. I got experience in sales, strategic planning, customer service, business management. I earn an average Australian income for all these above average investments I have made. People ignore my higher education and give me little to no respect for the jobs I have done. I am seeing my recruiter again Tuesday and I will be putting the pressure on him: Get me a management job! Unless they offer me $100k per year I know its the usual unchallenging report-writing monkey duty and I won't even give them a minute of my time. Every job I worked was a career change so I am used to getting thrown into the deep water. I have heard the lame excuse, "We need somebody who already has got the experience," a million times.

I started trading stocks 19 months ago because I needed something to challenge me. I work my day job and I basically got no life. My daily grind is getting up at 6am, checking US market, be at work at 7am, do any work they want me to do (if there is any) until 3pm, watch the ASX all day (but don't actually trade because I am terrible at short-term trading), be home at 3:30pm, watch the ASX close, take a nap for two hours, look for opportunities in the US and AU, put together trades, go to bed at 9pm, wake up twice at night and check US market, sleep til 6am. I divide my weekends between trading education and sleeping. I still need the daily paycheck to pay the bills, prop up my bank, allow me to handle the occasional trade slipup and I enjoy working with people which is something trading doesn't offer.

I would be wrong to say I could have skipped uni and gone straight to trading because there would have been no way in hell my parents, who supported my uni studies, would have given me money to trade. I wasn't ready to pursue this when I was 18-20. I have gone through a huge mental change over the last two years. I used to live from paycheck to paycheck and my attitude would show my lack of success which lowers your chances of getting the job you deserve. Since I got money in the bank and a sense of achieving my goals step by step I feel more positive and am able to tell my recruiter to get me the job I want at the price I want. If I don't get it I will keep going full-force as I am now.

I spend 19 months 7 days a week 6 hours a day working on "learning how to trade" on top of my day job. I can only recommend you go for what you feel like. You got no time to waste! Make sure you cover your downside. You can't allow yourself to go broke because when you are broke you end up being the slave.

*Nobody gives a shit about higher education anymore because universities are a sesspool of incompetence. It's just another money-making machine. Half the class (if you are lucky enough to get the American teaching experience this includes your lecturer) can't speak the language of the country you are in and gets an automatic pass. University education is the practice of testing people how well they can regurgitate textbook material.

Did anybody watch "1 vs 100" this week? I caught the end of the show when they restarted the next round. 1 new contestant and 100 new challengers including 3 Mensa guys. My friends in the room say: " Woah, three Mensa guys. She is going to get her ass kicked." I say: "Who gives a crap! Mensa doesn't mean shit! They passed a standardised test which they studied for. Big deal!" My friends look at me in disbelief. I say: "Just wait!" The first question: "What word in English expresses the same as the Russian word Da and the German word Ja." 11 out of 100 got it wrong. 1 of the 11 was a Mensa guy. I turn to my friends and say: "I told you Mensa doesn't mean shit. If you ask a person a question they are as likely as anybody else to get it wrong if they don't know the answer." If they don't know how to submit their answer properly (which may be a challenge on the first answer) they are also screwed.

Eddie McGuire quips: He may have an IQ as large as the GDP of Australia but he doesn't know ...

(Message edited by ohkoolnutz on February 02, 2007)

---
ohk

Lies, Damn Lies and Technical Analysis

rockon

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Post Number: 132
Registered: 08-2003

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Votes: 0


Saturday, February 03, 2007 - 01:01 pm:

Hello again Big Red,

Certainly nothing wrong with your education strategy and timeframe. I was in a similar position where I had enough time to treat this trading thingy as some sort of tafe course and without the added burden of trying to trade while I was learning.I dread to think just where I'd be now if I only had enough time to read half a chapter every night before I flaked.I loaned a book to a friend who wanted to "get into this" about four months ago and so far he has progressed about sixty pages not because he doesn't want to read it but because of all the other things in life that spring up. Maybe he needs a bit of your passion.

The thing that helped me the most was understanding that the market would still be there next year if I wasn't up to the job this year. This made it heaps easier to re-read chapters over and over again until I understood what that chapter was all about.A few books were also re-read. Try doing that when your'e studying for an exam.

So thats about it for my little bit of support.There's worse ways to learn your trade than the way you are going about it so best of luck.

Regards. R.

P.S. I bet your Mum & Dad are rapt about you moving back in after having the place to themselves for a couple of years so when you are making your fortune, don't forget all the delayed tuition fees.

P.S.P.S. I should add that I'm neither an options trader nor a full time trader, but the path that you describe could be used for any venture.. cheers..

(Message edited by rockon on February 03, 2007)

curtains

Member

Post Number: 16
Registered: 11-2003

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Votes: 0


Monday, February 05, 2007 - 03:19 pm:

Hi Nik,

First of all - good luck.

I am impressed by your planning so far into what you have to learn. Its not going to be easy. It is interesting to see your chosen trading vehicle as options, as they are the hardest of products to trade simply because they have so many risk factors (greeks).

What kind of strategy do you have in mind a the moment? With options, you will quickly learn that are a thousand ways to make and lose money. Essentially, you want to be trading with a defined risk exposure, IE, what greek are you going to be exposed to in order to make money. Are you going to attempt (i use attempt, because its not easy) to keep the other risk factors neutral.

You might like to add in a study of theoretical options models into your plan. You don't need to understand the maths behind it, but you need to appreciate who is using them, why are they using them, and what this means in the marketplace.

You're right about the thin liquidity in aussie options, but certain stocks, like BHP, RIO and the 4 banks all offer tight spreads in the near months. You'll also find that the spreads will only get tighter as the years drag on as more market markets are attracted to the current options climate in aus.

In order to start you on your way, i suggest you read 'Options volatility and pricing' by natenberg. You'll probably end up reading it twice every year over the next 5 years as it all starts to make more sense. I don't think there are any market makers or prop traders who haven't read it. If you need some other book ideas, let me know.

If you have any specific questions i'm more than happy to help. Just don't quiz me on theoretical model mathematics.

maxboost

Member

Post Number: 107
Registered: 12-2005

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Votes: 0


Monday, February 05, 2007 - 04:44 pm:

Hi nik,
If you are looking to trade options can i suggest you consider looking at option on the agricultural futures and softs. I find they offer some good opportunities with good risk reward ratios. You can get into some of the positions for under US$200 which makes your capital go a long way. Of course there are margin considerations.
The only problem is it's night hear when the markets are open but if your not working then that should not matter. After all sleep is unproductive.
Like curtains suggested above, you will have to take a look at the theoretical options models.
regards

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