An interesting topic. I am at a stage where what I have earned...

An interesting topic. I am at a stage where what I have earned this year from "trading" is significantly more than the earnings from my job.......I consider myself "semi retired."

I am as close to a full time trader/investor as you could be at my age (29yo) and I spend my days monitoring my investments and 2 1/2 nights a week working up the penalties til midnight (like tonight) to pay the bills.........allowing me to re-invest the profits of my trading.

I've tried the lot from daytrading shares and futures and have eventually come back to a more medium term investment strategy where I hold for days to months depending on the available cash (if I can't find enough top quality shares I trade the leftover cash shorter term). I can recommend trading futures to anyone with some cash they can afford to lose.......it hones your risk management skills like nothing else as most reputable brokers will not even accept your order without a stop loss.

I believe I could pretty much retire right now if I wanted to put the pressure on but I DON'T!!! I am a firm believer that if you are trading to pay your next shopping bill then you tend to start doing silly things to try and make back your losses etc.....It's far better to have another source of income that you can rely on to pay the bills and keep trading profits seperate,at least until the funds invested are of a magnitude where the returns required are not very large to survive.

Having said all that the amount required to trade comfortably is something I think about a lot. As I said I have earned enough this year to live off a few times over but I really won't be considering retiring fully until I have at least half a million in the market. That could be anywhere from 1 year (I'm hoping) to infinity depending on how I continue to perform.

I won't go into my exact performance numbers here but although I believe returns of 20-100%/yr are well and truly achievable would I ever rely on that to pay the bills?? NO.

If you have 500k then if worst comes to worst there are property funds backed by companies like Challenger paying 10% after tax, so if the stockmarket scares the $hit out of you at least you have something to fall back on as you have the funds (unless you blew the lot on stocks!!). As someone above said........make preservation of capital your number one priority.

Hope these random thoughts after work at all hours of the morning (as I do my research for tomorrow's trading)are of some assistance.

Best of luck,

Ed.