Trading For A Living - Part 2Written by Geoff Turnbull
In part 1 of this article I started to look at financial implications of giving up day job to instead start trading full time for a living. There are more than just monetary considerations as we will see later, but for now, there are some more costs to ponder.More Costs! Let’s move on to equipment. Presumably you already have a PC and internet connection by virtue of fact you are reading this on internet. But are these both up to job of trading full time? Again specifications for both hardware and ISP will depend largely on your trading style, but if you’re relying on a 100Mhz Pentium II and a dial up service, you’re setting yourself up for failure. So budget for quality equipment, budget to keep it up to spec, and budget for some repairs too – expect unexpected. Many traders make mistake of saying “This will do me whilst I start out, and I’ll get something better when I make some real money”. This is quite simply false economy, you are unlikely to ever make real money with a substandard setup (and this applies equally to substandard software and data feeds). This is a cut-throat business and 95% fail, you must give yourself every advantage you can. You wouldn’t enter Indy 500 in a go-kart with intention of buying a better car when you’ve won a few races, and same thing applies here. Earnings When you’ve added this all together, you have a pretty good picture of how much money you need to generate from your trading in order to live. Does your past performance suggest you will be able to meet this target? It’s tempting to say “When I go full time I’ll make much more”, but how do you know this is case? Perhaps you can take a couple of weeks holiday and try it out – if you don’t make enough in that two weeks then you’re not ready. A few weeks really isn’t enough time to know if you’re going to succeed though. An ideal next step then is to cut your day job hours to part time and trade maybe two or three days a week. This way you know you have some money coming in, you get to trade for real, and if it all goes horribly wrong you are probably better placed to get back into full time employment than someone who quit working world completely. The option of part time work is a luxury many of us don’t have however. So does it have to be all or nothing – trade or work? Why not keep day job and trade outside your working hours as well. If you are trading and end of day strategy, then this is easily achieved by doing your research in evening and placing appropriate combinations of Stop and Limit orders with your broker. For day traders, certainly practising is easier if your intended market is not your home market, for example if you want to trade US and you live in UK where you can come home and paper trade in evening. There are other try before you buy options open to day traders who want to practise trading their home market outside of normal hours though. eSignal allows you to download tick data for any symbol and play it back in real time or speeded up so you could trade whole day in an hour. Other vendors have similar offerings, and if you have an IB account you can use AutoTrader to record tick data during day for playback into a demo version of SierraCharts or QuoteTracker for free.
| | Globalize to SurviveWritten by William Cate
Globalize to Survive By William Cate Published September 2004 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]Civilization in 21st century is in serious trouble. Modern economic models that manipulate public's perception of economy's stability aren't working as well as they have in past. The cost of repairing environment is beyond financial and technical means of governments to do. Population is growing while resources are diminishing. Demand for a Western lifestyle is almost universal, while civilization's ability to meet that demand doesn't exist. The result will be social upheaval, political instability and economic uncertainty. The individual will be sacrificed to needs of government bureaucracy. As an individual, your civil rights are subject to whim of your government. Most people prefer illusion of security above personal freedom. Thus, most citizens are willing to give up their rights in belief that it offers them greater protection against forces arrayed against their government. You can see it in fact that it took American Government about six weeks to repeal Bill of Rights after attack on World Trade Center. The Russian Government plans to give its citizens rights they had during czarist times, thanks to Breslan School siege. Governments tax their citizens to pay to maintain illusion of national security and economic wellbeing. During Roman Empire, income tax rate varied from 1% to 3%. From Dark Ages to Renaissance, income tax rate was usually 20%. In modern times, income tax rate averages about 50% of your income. History teaches us that no government or civilization will survive over time. Whatever you are buying with your taxes, it isn't long term security for your family and descendants. Business investment is risk. Governments expect their citizens to bear full risk of creating local employment. If you succeed, you pay local taxes. If you fail, you are broke. However, those same governments will share your risk when you aren't a citizen of country. The government won't tax your profits.
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