In early 2022 sold a retail brick and mortar business that had a strong online presence and e-commerce component after operating it for over 10 years.
A major factor in why I decided to sell the business was not being able to spend time with my family and kids. The summer was the busiest time of the year, so we could never travel as a family during the kids’ summer break. Every long weekend or statutory holiday, my staff had off and I had to cover those days.
After exiting that business, my options were either I could apply for a corporate finance job or start a new business. The challenge is I now have 2 young kids, so getting a new business to operate without you having to work super long hours takes a few years, and working a 9 to 5 after determining my own hours for a decade would be a tough adjustment.
After getting rekt on Bitmex and Deribit a few years ago, I never thought about trading as a full time job, but a smart computer engineering and risk averse friend of mine introduced me to a swing trade service called In The Money Stocks he subscribes to that yielded him very decent returns and high win rates. I was super skeptical but they listed all their trades going back several years, both wins and losses and their track record was impressive.
Anyone can post random trades and claim they are real, but after a few months of subscribing to their swing trading services, I started to trust them and their track record since each trade was actually executed. After some impressive gains, I poked around their website more and noticed they also offered a day trading service. This intrigued me as I could use a swing account to build wealth and a day trade account to pay bills. Here is a screen shot of their recent trades:
While operating the business I just sold, I also did consulting as a business analyst, doing lots of financial forecasting and feasibility models for large companies.
As a Finance major and former business analyst for a publicly traded company, I was educated to be aligned with a similar investing philosophy to Brian Feroldi.
Safe to stay, I was very skeptical of technical analysis and purely trusting charts.
Coming back to deciding between day trading or starting a business, I created a financial forecast spreadsheet, typical of what I would produce for a large company with revenue streams, expenses and capital expenditures. Having owned a B2C business, I needed to take a loan out to fund the build out of the store and working capital, I needed to spend money on marketing, rent and as we grew, labour costs were our highest line item. We had revenue streams from in store sales, online sales and corporate accounts.
With a similar logic, I built this financial forecast tool.
|In store product / service sales,
|Payroll, Rent, Inventory, Marketing
Utilities, Credit Card Processing Fees,
Interest Payments, Professional Fees
(Accountant, Lawyer, Consultants)
|ITMS Monthly Fee,
Losing Trades, Commissions,
Optional Services (Trading View)
Here are some key assumptions made in the above forecast, which come from extracting 3 years of historical trades posted on the ITMS Day Trade Page:
Average Trader Per Day: 1.2
Using pivot tables and pulling in a couple years of historical trades posted on the ITMS Day Trade Page, they had an average of 1.8 – 1.9 trades per day.
From my experience, sometimes we’ve gone 2 or 3 days with no trades, and occasionally we did 4 trades in a day.
To be conservative, I used an average of 1.2 trades per day. Then to add ANOTHER layer of being conservative, I took the total number of trades per month and reduced it further by 25%.
Average Position Size: 23% of Your Portfolio
Position size is very important. Typically, Gareth Soloway will leg in, usually starting a position with 1/6th of what you want to risk. If we are long and the price goes below the entry price level by $0.50 to $1.00 depending on the stock, he will add another position to make it 2/6th in order to lower your average price. If the stock is very volatile, I’ve seen multiple times where we went full position (6/6). Nick Santiago will usually only do full position sizes and not leg in.
To be conservative, the assumption in this forecast is using 23% of your portfolio
That being said, on occasion Gareth Soloway will go 12/6th or more!
Stay tuned for my takeaways, tips and review of ITMS.
Portfolio Size: $200,000
Assumes a starting portfolio size is $200,000.
This portfolio size is meant to be the amount you are willing to risk day trading. That does not mean your entire portfolio you have available. Only what you’re willing to risk, and I recommend starting small when first starting out.
Owners Compensation (Paying Yourself): $40,000
Based on the above assumptions, since they are quite conservative, there is a good chance after 12 months you’ll earn about $88,000 from day trades.
After paying for various expenses such as the ITMS service, commissions, interest payments and other fees, you’ll have enough to pay yourself approximately $40,000 and around $10,000 as contingency or to pay down a portion of the loan assumed.
I am now almost 1 year into day trading and swing trading with In The Money Stocks (ITMS) I now see Technical Analysis is the way. Had I started swing and day trading with ITMS years ago, my portfolio would be significantly higher than it is now.
Being able to make money whatever direction the markets are moving is a great feeling. When I had the business, the pressure of ensuring there was enough cash in the bank to make payroll and rent was much more than being in a trade that went against me.
If you’ve been thinking about giving day trading a try, download the day trade earnings forecast tool below and see if it’s worth it!
Get The Forecast Tool Free
Wondering if you should try Day Trading?
Enter your own assumptions and see what you could earn day trading.
If you’ve taken a look and have decided to give day trading a try, I highly recommend joining a day trade chat room to help guide you as you start out.
There are quite a few day trade chat rooms out there, here is my 6 month review of In The Money Stocks’ Live Day Trading room.