More capital is obviously better. But more importantly, what happens when you're not making money? How do you control your anxieties when your broker ac balance halves due to a trend reversing? Are you prepared to monitor your strategy 24/7? At a firm, there's probably someone there to do it for you - at home, it's just you. Trading is a casino and the emotions it imparts are similar - euphoria when you win, depression when you lose. If you have a job, you at least have a base salary that will bolster your living standard - without it, you're going to struggle in the bad times (unless, of course, you're already rich).

Regarding strategy generation, it's a mix. Quants like me almost always take the systematic, research like approach - analyse data, see if you can ascertain any predictable patterns and then paper trade them in the live market. If it makes money on paper, it might make money in the real market. Then just iterate and refine. Some guys do trade with their gut, but are rarely successful.