Day Trading Rule #8 – Forget the Day Job but Don’t Forget the Day Job

I got into this game when I was a high-earner who was being turned into a low earner by financial advisors. I had no intention of giving up my day-job running a software factory.

I ended up day trading. Partly because of the fact I’m hyperactive, partly because of the impact on my psyche of those long term investment losses. My holding times got shorter and shorter because of my fear of being in a position. 

I did not give up my day job to trade. I would advise you don’t either – yet.

The reason is simple. If you are learning to trade, and you give up your day job, you will be under an unreasonable amount of pressure to perform. This will derail your efforts.  When you are learning, you need to do just that – have a laser-like focus on getting your act together as a trader. This isn’t me telling you how I think it should be, I’ve been in the industry a while and heard stories that would make your heart bleed:

Traders that give themselves a year off work to ‘learn how to trade’. Feels great at month 1, but they don’t have a rational roadmap defined, and then I’ll get a call at month 11.
A single parent in his 70s that was going to run out of money in 6 months.
A guy that lost $200k AND 2 condos.
Someone that lost $40k and didn’t tell his wife!

If you aren’t working – the losses are painful. If you ARE working – you still get a paycheck. It’s painful, but not catastrophic.

There are those that say “you can’t learn to trade part-time”- that’s BS. The reality is that your available time IS a limiting factor that you need to work around.

I’ve traded in Los Angeles – a 5am run, then prep for a 6:30am open. I’ve traded Asia, where the S&P opens at 8:30/9:30pm. Europeans can catch the afternoon session.

Somewhat tougher is those in Central/East coast American time zones. The overnight session is quite “technical” on markets like S&P500. Low liquidity but decent runs. Highs/lows of the previous day are often reaction points. Downside: opportunity can strike anytime over 10 hours. 

There’s a ‘dead zone’ between U.S. close and Japan open. Nikkei futures (CME or JPX) offers good plays. This narrows your scope of opportunity, but that’s good. Start with one or two markets. Learn their personality deeply. You’ll sit on your hands a lot. Master that patience part-time. Then scale.

Now – the title also says “forget your day job”. The reason for that is simple – trading is a very specific job and your ‘day job’ skills are unlikely to help.

Pilots are the worst:

Pilot:  “I need a dashboard to trade the market” 

Me “you mean, like a cockpit?”

Pilot “Yes, exactly”

Me “you want wings with it too?”

Programmers rank #2 They try to code their way to profitability. I did too. Then the epiphany hit: every system my teams ever built (R&D, manufacturing, complex tech) started with knowing how it worked in real life, or hiring someone that did. Trading? No spec sheet. No consultant. No blueprint. Watch a few hundred pullbacks, and you’ll start to get a feel for when one side gives up. But automating that ‘feel’? You’ll pass –  it’s a monumental task you won’t feel worth the effort.

Same with plumbers switching to become farmers – totally different skills. So no matter what you do or how good you are at it – if you try to use those work skills in trading, it’s likely to fail.

What does help, though – is having learnt a skill/competitive sport. Both of my children are musical, I got them into it even though I’m tone-deaf. My reason was simple – I wanted them to experience the process of getting really good at something, grinding through the initial pain, then starting to see rewards and finally getting to the point where they just play and sing for pleasure. People that play sports or any competitive game understand the process, have a higher chance of success and are more likely to get hired by bricks and mortar prop firms because the experience of developing a skill is invaluable.

So – it’s still not too late to pick up that banjo you got when you were 18. For trading, treat it as a new skill and don’t let your day job skill interfere with your progress.