Day Traders Vs. Physicians

Posted by Satuki On May - 10 - 2009

Here is the list of 25 best paying jobs in the US . Almost half of the list is physicians of different types. Their average income is about 200k+ benefits. Let’s make it 230k a year.

After 4 years of pre-med, which is like a standard 4 year undergraduate degree, a person could spend about 40k (tuition + all other fees) per year attending a medical school. That will make the total costs around 160k before he/she can become a physician.

After 4 years of college education, with 160k as the trading stake, a person might be able to develop a system or perfect her trading skills before she burns all of the 160k. Even if she is close to burning the entire trading stake, as long as she can statistically prove she has a winning system (not a mechanical system), she will be on her merry way to beat any physician’s in the world. If you can make 30% a year with a 100k account consistently year over year no matter how the market behaves, you can do that easily with a million dollar account provided you trade liquid stocks.

Here is a list of things that day traders might beat physicians

Day traders have more earning potentials than physicians
Day traders have much more flexible working hours than physicians(odd hours)
Day traders have a much better working environment than physicians(blood, broken bones, dying people..)
Day traders have no bosses.

Here is a list of things that physicians might beat day traders

After spending 160k in a medical school, a person is almost on her sure way to becoming a physician. Nevertheless, the aspiring day trader might never be able to develop or perfect her trading skills before she burns all the money
Physician sounds like a more respectable profession than day trader since most people consider day traders as gamblers or people who just want easy money.
Physician’s income is very stable. No matter how good a day trader you think you are, your earnings fluctuate.
Day traders have more stress than physicians. No matter how experienced you are when a position moves against you, the fear sinks in. Experienced traders might shake it off more quickly than less experienced. But the stress is there.

If you ask me, the barrier of entry to becoming a successful day trader who can beat a physician is very high. That is why you can have an enormous reward if you can make it. But when we look around, there might be more physicians than successful day traders because day trading is just that hard.

But you really do not have to beat a physician to become a successful day trader. If you can produce an income that is comparable to what you can make now from your day job(lets say 50k), you should be proud of yourself. You are already a very successful day trader considering there are so many perks you can earn as a day trader.

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jessa
Hey, I love the concept of this post!
MDs: add in making less than 40K during the 3-10 years of residency, plus fellowship years means that a physician doesn’t really start making money until they’re over 30.
On the trader side; I think coming up with that initial capital is the biggest obstacle. I’m only a few months down the learning to trade path, and have struggled with the discipline to keep my hands off my stop loss while trying to swing trade because of the pattern daytrader rules (I started with less than 25K).
But I love the challenge of being able to beat my physician husband’s income. If I ever learn to become a consistently profitable trader I’ll be incredibly proud of it!
jessa
PS: What is the final result of the automated trading experiment??

http://www.momdaytrader.com/blog/ Satuki (Trader Mom)
Jessa, I am going to write a post about that experiment very soon. And you are right about the initial capital. It is very hard to beat your hubby if your account is less than 500K. One year wonder means nothing. 20% a year for 20 years is priceless.

jessa
Hey, I love the concept of this post!
MDs: add in making less than 40K during the 3-10 years of residency, plus fellowship years means that a physician doesn’t really start making money until they’re over 30.
On the trader side; I think coming up with that initial capital is the biggest obstacle. I’m only a few months down the learning to trade path, and have struggled with the discipline to keep my hands off my stop loss while trying to swing trade because of the pattern daytrader rules (I started with less than 25K).
But I love the challenge of being able to beat my physician husband’s income. If I ever learn to become a consistently profitable trader I’ll be incredibly proud of it!
jessa
PS: What is the final result of the automated trading experiment??

http://www.momdaytrader.com Trader Mom
Jessa, I am going to write a post about that experiment very soon. And you are right about the initial capital. It is very hard to beat your hubby if your account is less than 500K. One year wonder means nothing. 20% a year for 20 years is priceless.

http://unemployeddaytrader.blogspot.com/ traderx
I hope we all make Doctors incomes look puny:)
Btw, the capital needed is a highly debated subject. I know many people who would agrue that the size of one’s account isn’t all that important and instead it all boils down to skill and buying power. I personally know several traders who have 50K accounts by choice but have 1 million in buying power(20x). They have also been able to consistently make 500K+/yr over the last 8-9 years.
Btw, how do you twitter someone? I saw you had WFC long Friday and I found your page and signed up but couldn’t figure out how to post to you. I was going to tell you to try and hang in there with the trade because there were just enormous sized MOC imbalances piling up on the stock. Unfortunately while I was trying to figure twitter out you sold just as I was buying.
traderx’s last blog post..Week ending 5-8

http://www.momdaytrader.com/blog/ Satuki (Trader Mom)
I never use margin. That would put too much pressure on my performance.
I think it is very hard to make that kind of money, 500K out of a 50k account using 1:20 leverage. It would be a 50% annual return if we look at the buying power. It would be 1000% return if we look at the actual account size. It is very hard to believe. My question is that if they indeed could make this much money, why not run a 500K account? They would have a buying power of 10 million. Then they would make 5 million a year instead of 500k. Trading would be almost the same with 1 million buying power and 10 million buying power.
Madoff scammed so many people because he promised people only 12% a year consistently which seemed realistic. Even with that kind return, some people still questioned him and sent letters to the SEC. If he promised people 30% a year, no one would give him any money and he might not be sitting in jail now. 50% or 1000% a year for 8-9 years is just way beyond being realistic.
I once heard anther story from a trader. He said he knew one very active trader who never had a losing day for 2 years. He was not BSing. He actually believed it. After some debating and reasoning, he said he worked under him for 6 months and heard about it instead of actually seeing it
30% a year consistently for 10 years will make you the king of Wall street.
Let’s take a look at the performance of some hedge funds. Most of them are not impressive at all. That is why the hedge fund industry is dying
http://www.hedgefund.net/hfn_public/marketing_index_new.aspx?template=realtime.html
A interesting read about hedge fund managers called hedge hogs
http://www.amazon.com/Hedgehogging-Barton-Biggs/dp/047006773X/ref=sr_1_1?ie=UTF8&s;=books&qid;=1242016104&sr;=1-1
You can tweet me using @trader_mom

http://unemployeddaytrader.blogspot.com/ traderx
I hope we all make Doctors incomes look puny:)
Btw, the capital needed is a highly debated subject. I know many people who would agrue that the size of one’s account isn’t all that important and instead it all boils down to skill and buying power. I personally know several traders who have 50K accounts by choice but have 1 million in buying power(20x). They have also been able to consistently make 500K+/yr over the last 8-9 years.
Btw, how do you twitter someone? I saw you had WFC long Friday and I found your page and signed up but couldn’t figure out how to post to you. I was going to tell you to try and hang in there with the trade because there were just enormous sized MOC imbalances piling up on the stock. Unfortunately while I was trying to figure twitter out you sold just as I was buying.
traderx’s last blog post..Week ending 5-8

http://www.momdaytrader.com Trader Mom
I never use margin. That would put too much pressure on my performance.
I think it is very hard to make that kind of money, 500K out of a 50k account using 1:20 leverage. It would be a 50% annual return if we look at the buying power. It would be 1000% return if we look at the actual account size. It is very hard to believe. My question is that if they indeed could make this much money, why not run a 500K account? They would have a buying power of 10 million. Then they would make 5 million a year instead of 500k. Trading would be almost the same with 1 million buying power and 10 million buying power.
Madoff scammed so many people because he promised people only 12% a year consistently which seemed realistic. Even with that kind return, some people still questioned him and sent letters to the SEC. If he promised people 30% a year, no one would give him any money and he might not be sitting in jail now. 50% or 1000% a year for 8-9 years is just way beyond being realistic.
I once heard anther story from a trader. He said he knew one very active trader who never had a losing day for 2 years. He was not BSing. He actually believed it. After some debating and reasoning, he said he worked under him for 6 months and heard about it instead of actually seeing it
30% a year consistently for 10 years will make you the king of Wall street.
Let’s take a look at the performance of some hedge funds. Most of them are not impressive at all. That is why the hedge fund industry is dying
http://www.hedgefund.net/hfn_public/marketing_index_new.aspx?template=realtime.html
A interesting read about hedge fund managers called hedge hogs
http://www.amazon.com/Hedgehogging-Barton-Biggs/dp/047006773X/ref=sr_1_1?ie=UTF8&s=books&qid=1242016104&sr=1-1
You can tweet me using @trader_mom

http://unemployeddaytrader.blogspot.com/ traderx
I know it’s hard to believe, but trust me I see with my own eyes everyday. It’s not that unheard of actually as there is usually a few all-stars in every prop shop. Trust me, until you develop a serious track record you won’t get 20:1 margin especially if your trading outside the office.
As for the account sizes. I can only speak for the people I know personally and to the degree that I think I understand their point of view. Based on that there are several reasons for smaller accounts. The guys who use 50K accounts are all true pro’s who’ve been trading for many years and prefer to trade with as little of their networth as possible based on the logic that whats the worst that can happen. If you have a few million whats 50K? Others would say they’re in a comfort zone or have had bad experiences trading larger amounts. Same difference I suppose. Then of course there’s the guys who trade thinner stocks who really can’t utilize more BP effectively.
Don;t think for a minute I’m saying these guys always win. They don’t and when they lose they can lose huge. Not blow up account huge, but huge nonetheless. Biggest I’ve seen is a 340K loss in a about 5 minutes. That would destroy me as a person..LOL!
Btw, another reason I know it’s true is I’ve followed these guys trades with my own money and was able to make 40-50% and I was working fulltime. Certainly could have done more if not for my fear of losing money hence keeping the size down.
Keep an open mind I’m not selling anything here.
traderx’s last blog post..Week ending 5-8

http://www.momdaytrader.com/blog/ Satuki (Trader Mom)
>>Keep an open mind I’m not selling anything here.
I know you are not selling anything. That is why I spoke my mind. It is a healthy debate. Speak your mind too.
Actually because my mind is open I do a lot research on my own instead of believing hearsay. If one day I could make 50% out of 1 million, I would definitely push for 2-3 million if not 10 million. How could my trading be any different with an 1 million account and a 3 million account after all? That is why I do not believe that kind of returns. You might see them trade a few times. But you might heard them exchange exaggerated trading stories most of the time. Like the exaggerated story(never a losing day in 2 years) I mentioned above. In those prop trading firms, exaggerated war stories are all over the place and you can hear them all day long.
Like Tim ( http://timothysykes.com/ ) who turned 12k into 1.65 million in 2-3 years,it would be a very-hard-to-believe story if it was told by someone. But he had all his records audited and published. That is the only way to believe this kind of returns. Otherwise, it is just a much worse Madoff wannabe. The reason he had it audited is because he knew no one would believe his performance if he just told people. It is true. But how many people can trade like him?
There is a legendary Japanese trader who turned his 20k into 3 Million in 2 years without using any margin. But that is totally an outlier. There is only one trader like that in whole Japan. I would never encourage people to trade like him and expect returns like that.
I consider pushing for performance(using leverage or trading leverage ETFs) is detrimental to the actual performance.

http://unemployeddaytrader.blogspot.com/ traderx
I know it’s hard to believe, but trust me I see with my own eyes everyday. It’s not that unheard of actually as there is usually a few all-stars in every prop shop. Trust me, until you develop a serious track record you won’t get 20:1 margin especially if your trading outside the office.
As for the account sizes. I can only speak for the people I know personally and to the degree that I think I understand their point of view. Based on that there are several reasons for smaller accounts. The guys who use 50K accounts are all true pro’s who’ve been trading for many years and prefer to trade with as little of their networth as possible based on the logic that whats the worst that can happen. If you have a few million whats 50K? Others would say they’re in a comfort zone or have had bad experiences trading larger amounts. Same difference I suppose. Then of course there’s the guys who trade thinner stocks who really can’t utilize more BP effectively.
Don;t think for a minute I’m saying these guys always win. They don’t and when they lose they can lose huge. Not blow up account huge, but huge nonetheless. Biggest I’ve seen is a 340K loss in a about 5 minutes. That would destroy me as a person..LOL!
Btw, another reason I know it’s true is I’ve followed these guys trades with my own money and was able to make 40-50% and I was working fulltime. Certainly could have done more if not for my fear of losing money hence keeping the size down.
Keep an open mind I’m not selling anything here.
traderx’s last blog post..Week ending 5-8

http://www.momdaytrader.com Trader Mom
>>Keep an open mind I’m not selling anything here.
I know you are not selling anything. That is why I spoke my mind. It is a healthy debate. Speak your mind too.
Actually because my mind is open I do a lot research on my own instead of believing hearsay. If one day I could make 50% out of 1 million, I would definitely push for 2-3 million if not 10 million. How could my trading be any different with an 1 million account and a 3 million account after all? That is why I do not believe that kind of returns. You might see them trade a few times. But you might heard them exchange exaggerated trading stories most of the time. Like the exaggerated story(never a losing day in 2 years) I mentioned above. In those prop trading firms, exaggerated war stories are all over the place and you can hear them all day long.
Like Tim ( http://timothysykes.com/ ) who turned 12k into 1.65 million in 2-3 years,it would be a very-hard-to-believe story if it was told by someone. But he had all his records audited and published. That is the only way to believe this kind of returns. Otherwise, it is just a much worse Madoff wannabe. The reason he had it audited is because he knew no one would believe his performance if he just told people. It is true. But how many people can trade like him?
There is a legendary Japanese trader who turned his 20k into 3 Million in 2 years without using any margin. But that is totally an outlier. There is only one trader like that in whole Japan. I would never encourage people to trade like him and expect returns like that.
I consider pushing for performance(using leverage or trading leverage ETFs) is detrimental to the actual performance.

WallStreet Addict
I’m actually planning on becoming a daytrader, as a profession and living
Im taking out a 25K loan for a daytrading account from my uncle and starting out with a margin account and will start trading..
Ive been working under virtual trading for 2 years and with a real account with 1 or 2 grand only… but since i turned 18 i realized that my own personal account is making profits if i could daytrade I could magnify those profits…
I also live in Middle East so i can focus on daytrading after I finish my classes in university so timing is SIMPLY PERFECT..from 4:30 PM to 11 PM!
WallStreet Addict
I’m actually planning on becoming a daytrader, as a profession and living
Im taking out a 25K loan for a daytrading account from my uncle and starting out with a margin account and will start trading..
Ive been working under virtual trading for 2 years and with a real account with 1 or 2 grand only… but since i turned 18 i realized that my own personal account is making profits if i could daytrade I could magnify those profits…
I also live in Middle East so i can focus on daytrading after I finish my classes in university so timing is SIMPLY PERFECT..from 4:30 PM to 11 PM!
WallStreet Addict
an by the way IT IS NOT EASY MONEY AT ALL
the stress, discipline, and patience needed is much more difficult than most professions and many people lack these to daytrade anyways, its like gambling to them
WallStreet Addict
an by the way IT IS NOT EASY MONEY AT ALL
the stress, discipline, and patience needed is much more difficult than most professions and many people lack these to daytrade anyways, its like gambling to them
AR
>> If you can make 30% a year with a 100k account consistently year over year no matter how >>the market behaves, you can do that easily with a million dollar account provided you trade >>liquid stocks.
This is just idiotic. You speak of 30% as if its just some easy return. Even getting a consistent 15% return is extremely difficult. Hence the comparison between physicians and day traders is useless. Its like comparing doctors to gamblers.
As a side issue, I never understood why so many self described “traders” have trading blogs. The best traders in the world, the ones you and I never hear about, are the ones who don’t feel the need to create silly blogs about trading and waste their time. Why not do more research instead of blogging, or anything else that may develop your skills? T

http://www.momdaytrader.com/blog/ Satuki (Trader Mom)
You need to read it more carefully. That statement actually means it is very hard to make 30% consistently year over year for a long period of time.
As for your fallacious argument about blogging, it does not take me too much time to blog. Even if I write a post every day recording my trades, it takes about 30 minutes. But I do not blog every day. Without this blog, I would write a trading journal anyway. So it is not a waste of time.
You do not have to be the best in the world to be a successful trader. As long as you can make a living from trading and quit your boring day job. you are a successful trader.
What is wrong with comparing doctors with gamblers? The reason your gave is absurd, which absolutely has nothing to do with comparing these 2 professions. Here is how you could have put it ” because I think day traders are gamblers, I do not have respect for them. Hence doctors and day traders are not comparable.”
Most day traders fail. That is true, But a few successful day traders I know make it like peanuts what a doctor can make.
BTW, I post my trades real time in my portfolio. Is there anything more real than that?
Check it out if you care http://www.momdaytrader.com/Portf/getPortf.html?showPortf

AR
>> If you can make 30% a year with a 100k account consistently year over year no matter how >>the market behaves, you can do that easily with a million dollar account provided you trade >>liquid stocks.
This is just idiotic. You speak of 30% as if its just some easy return. Even getting a consistent 15% return is extremely difficult. Hence the comparison between physicians and day traders is useless. Its like comparing doctors to gamblers.
As a side issue, I never understood why so many self described “traders” have trading blogs. The best traders in the world, the ones you and I never hear about, are the ones who don’t feel the need to create silly blogs about trading and waste their time. Why not do more research instead of blogging, or anything else that may develop your skills? T

http://www.momdaytrader.com Trader Mom
You need to read it more carefully. That statement actually means it is very hard to make 30% consistently year over year for a long period of time.
As for your fallacious argument about blogging, it does not take me too much time to blog. Even if I write a post every day recording my trades, it takes about 30 minutes. But I do not blog every day. Without this blog, I would write a trading journal anyway. So it is not a waste of time.
You do not have to be the best in the world to be a successful trader. As long as you can make a living from trading and quit your boring day job. you are a successful trader.
What is wrong with comparing doctors with gamblers? The reason your gave is absurd, which absolutely has nothing to do with comparing these 2 professions. Here is how you could have put it ” because I think day traders are gamblers, I do not have respect for them. Hence doctors and day traders are not comparable.”
Most day traders fail. That is true, But a few successful day traders I know make it like peanuts what a doctor can make.
BTW, I post my trades real time in my portfolio. Is there anything more real than that?
Check it out if you care http://www.momdaytrader.com/Portf/getPortf.html?showPortf

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