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Here is an email that expresses a desire to switch from a stable job to full time trading.
QUOTE
Hi Sudarshan,
Currently working in a software company but wanted to switch to trading as a fulltime profession.
Here is a brief info about my trading experience:
I started trading since oct, 2008. first time i lost lot of money and stepped back for a few months to analyse my mistakes and learned more by reading books and watching the market. Similarly I attempted 3 times, everytime the amount of loss came down. This time I am in profit 🙂
earlier I was trading in stock futures, this time I liked commodities. I started around june 2011 with 2lakhs of capital, and made about 1lakh profit by dec, 2011. everytime, my main objective was to avoid losses, and that worked well.
everyday, I spend a few hours on analysing the market after i come back from office. I take a position if I find a good opportunity.
Please share your thoughts on whether i am in a right position for a switch:
I’ve saved 1yr worth of living expenses and 10lakhs as capital. Do you think I need to save more? how much should it be approximately?
Any other advice you may want to share?
UNQUOTE
My Notes:
I think you are well on the way to become a consistently profitable trader. You have the most essential requirement for successful trading – an aversion to losses. After your first attempt resulted in losses, you stepped back and studied. I hope the new traders reading this follow your example .
Your switch from F&O to commodities is just a matter of tactics. Such moves will keep on coming during your trading career, it is not of importance.
Let me discuss your desire to switch from part time trading to a full time trader. As a full time trader, you will have more time to spend on research and analysis. You will also be completely focused on trading rather than on your current job.
So, should you make the switch? Here are the drawbacks. Rs 10 lakhs in trading capital is not enough to create an income stream that will replace your current compensation from your job (whatever that amount is). You will need a lot of luck to earn enough to meet your expenses and Luck really should not be part of trading plans.
You really want to have the best of both the worlds. Continue with you present job and remain a part time trader. As your trading quality improves, you may consider increasing your volumes. Slowly!.