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Multiplicity-: Generating wealth as opposed to paying the rent with trading income.
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Multiplicity-: Generating wealth as opposed to paying the rent with trading income.

  #1 (permalink)
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Multiplicity-: Generating wealth as opposed to paying the rent with trading income.

Many believe the pinnacle of trading is to trade "full time". Defining "full time" as meaning you now make your living trading. Often that is further defined as what it means to be successful in trading. I am not saying that is the correct definition only how it is often defined in peoples thinking. Nothing wrong with that approach. It is one way to define success but not the only way. There is another approach that can be a very powerful wealth generator. I am not saying you cannot pay your bills trading and generate wealth. But it can slow you down and could even keep you from scaling especially in your early years because you are pulling money out that could be used to scale. Money you use to eat can no longer produce more income. It is essentially consumed and no longer works for you.

What if you could develop a system that makes enough that you could make a living and pay your bills out of it but you choose to leave it as a secondary form of income? Meaning you treat it as a passive stream that you allows to build while getting your primary stream through other avenues. At least doing so until you have scaled to the point where your monthly draw to live is a very small percentage of your monthly profit.

My goal in trading is not to make a living. I have made a living trading in the past and could use my trading income to make a living now but that is not my goal. My goal in trading is to generate wealth. By not buying groceries and paying rent with my trading income it gives the ability to scale my contracts much higher than if I was pulling out every month. There are also some very clear psychological benefits to trading being a secondary form of income and not what puts bread on the table.

I trade full time and I own a business that I run full time. There are two ways to do this one is have a strategy that maybe only requires you to be in market a few hours a day. The other is to automate. I automate which allows me to run my business while keeping an eye on my bot. Essentially I have multiplicity. There are two of me giving the ability to have multiple income streams. I have no intention of giving up my business.

I have a few friends that run successful businesses that want to quite the business and trade "full time". My question to them is why? Why give up a successful income stream when you can have two income successful income streams.

The purpose of this post is to get people to think about how you could have many irons in the fire meaning many income streams as opposed to only one. If you have chosen to make your goal one income stream be trading nothing wrong with that approach by any means. But maybe you could have two or three streams and hit your long term goals much faster.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."

Last edited by liquidcci; August 8th, 2011 at 11:53 AM.
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  #3 (permalink)
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Your post talks to me very much.

I've also decided to automate my strategies and will get back to my day job in a couple of months.

I've been trading full time discretionary for 1 year but as you said, I'm sure I'll generate much more wealth with an other stream of income and few strategies that will run auto.

No more stress to pay the bills, and I will wait until my account is well in the 7 figures in order to think of leaving my job again.

It will take some time but there's no rush, trading is a marathon not a sprint !

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TheTrend View Post
Your post talks to me very much.

I've also decided to automate my strategies and will get back to my day job in a couple of months.

I've been trading full time discretionary for 1 year but as you said, I'm sure I'll generate much more wealth with an other stream of income and few strategies that will run auto.

No more stress to pay the bills, and I will wait until my account is well in the 7 figures in order to think of leaving my job again.

It will take some time but there's no rush, trading is a marathon not a sprint !

TheTrend sounds like a good strategy. I like your analogy approaching trading like a "marathon" can have a great eventual payoff.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #5 (permalink)
Fortitudo et Honor
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Well, I think this comes with some assumptions.

A "day job" would not be feasible for most dicretionary traders (who trade RTH).

Additionally, as I've said before, automated <> "unattended" trading.

If you're trading unattended at this point, then in my opinion, you're asking for trouble. It only takes a few minutes flying blind to wipe out several months (or even years) of hard work.

I think if you can swing it, then absolutely, a primary source of income and trading as a supplemental has a lot of benefits. But I know so many people that would love to focus on trading more, but just can't do it. Many people's jobs do not allow them to even glance every once in awhile at a platform and babysit an ATS running.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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RM99 View Post
Well, I think this comes with some assumptions.

A "day job" would not be feasible for most dicretionary traders (who trade RTH).

Additionally, as I've said before, automated <> "unattended" trading.

If you're trading unattended at this point, then in my opinion, you're asking for trouble. It only takes a few minutes flying blind to wipe out several months (or even years) of hard work.

I think if you can swing it, then absolutely, a primary source of income and trading as a supplemental has a lot of benefits. But I know so many people that would love to focus on trading more, but just can't do it. Many people's jobs do not allow them to even glance every once in awhile at a platform and babysit an ATS running.

That is a draw back that could limit some from taking my approach. I have access at all times to market if I need it. I really don't watch the market at all until my system alerts me a trade was taken. Then I keep one eye on it while I do my work. One approach would be to develop main stream of income that still allows to keep an eye on things.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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Fortitudo et Honor
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liquidcci View Post
That is a draw back that could limit some from taking my approach. I have access at all times to market if I need it. I really don't watch the market at all until my system alerts me a trade was taken. Then I keep one eye on it while I do my work. One approach would be to develop main stream of income that still allows to keep an eye on things.

I guess an appropriate type thread would be "what occupations are best suited to work and still trade?"

Any type of "work at home" job.....
home based businesses like accountant, home inspector, etc.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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RM99 View Post
I guess an appropriate type thread would be "what occupations are best suited to work and still trade?"

Any type of "work at home" job.....
home based businesses like accountant, home inspector, etc.

At home is optimal or if in large city could be out doing a job around town if have wireless access via laptop to a remote server. That could open up other possibilities. I think key would be a job that has flexibility that you could divert your attention to market whenever needed.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."

Last edited by liquidcci; August 8th, 2011 at 06:27 PM.
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Income vs wealth trades


liquidcci View Post
That is a draw back that could limit some from taking my approach. I have access at all times to market if I need it. I really don't watch the market at all until my system alerts me a trade was taken. Then I keep one eye on it while I do my work. One approach would be to develop main stream of income that still allows to keep an eye on things.

I have a job and I trade from work. Most of the time I am able to trade from my computer at work, but there are other days where that I have a lot going on at work such that I cannot trade. So I just let those days be and trade when I can.

As far as wealth and income are concerned, I have seen (and am implementing) an approach where each trade taken is "labelled" as INCOME or WEALTH trade. I guess you could put whatever labels you want on your trades such as scalp or swing trade, but I consider most of my trades on my IRA as wealth trades because targets are usually bigger or those than my intraday trades.

I look at my trading as a means to fund my other streams of income, for instance, buy real estate, throw more money into tax sheltered investments, and so on. I am very fortunate because both my wife and I have good paying jobs and hence anything I make on trading goes straight to savings or other projects. My ideal situation would be a job that let's me come into the office at noon and leave at 5pm . Just my 2 pips.

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Thanks for starting this interested (and inspiring!) thread Liquidcci - not your first thread that got me thinking. (Though I normally only read)

liquidcci View Post
[..]

I have a few friends that run successful businesses that want to quite the business and trade "full time". My question to them is why? Why give up a successful income stream when you can have two income successful income streams.

[..]But maybe you could have two or three streams and hit your long term goals much faster.

If I may ask, what kind of business (meaning operating in which sector) do you have? My assumption is that it's something programming or advanced mathematics related - and here's why: I agree with your premise that it should be possible to have multiple income streams, one from trading and one from other activities. However, and you as an automated NinjaTrader user will probably agree, there is an tremendous amount of things to be learned, created, tested, implemented before a "good" automated strategy can be implemented. I'm wondering how you can do that besides a full-time day job, if you're not a programmer for who the learning curve (for programming) is less steep - though even then there's still plenty to learn.

There's a good chance this is a limiting thought from me, but I can't see how one can successfully design and implement automated trading strategies by 'just' doing this in the evening and weekend.

As I understand from your post, and earlier ones, you were already a successful trader before you started automating, so I assume you already had a lot of experience before you designed it as a secondary income stream. Against that background, what would your advice be to your friends who quit their business and trade full-time? Would they, as beginners new to trading, benefit from the extra available time or would you still urge them to do it besides their regular work?

Best regards,
Jura

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