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FXSCALPER2
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??? 8% a month ??? you should have BILLIONSthis is a realistic target, but for going BANKRUPT
I wish you luck this 8% per month you do with too much risk on a too small account
Why do I get the feeling that you don't know what you are talking about. You have been trading for 25 years?! You kidding us? :cheesy:
DaxDestroyer
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FXSCALPER2
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It depends on what you want from life. If you want to play it safe, you will make nothing. If you want to keep the job, the wife, the kids, the cars and the mortgage, you will make nothing. You are the wrong type of person to be trading. I have a lot of respect for people who live a conventional life and enjoy it. On the other hand, I have contempt for people who want to have the conventional life and 'make a living' trading on the side. It is not going to happen.
How much money do you need to trade for a living? That is a very interesting question. Everybody thinks that you will get wiped out trying to make more than 50% a year. So, assuming you live a modest life and need about £20k to live on, you would need £40k to trade with and you better be the best trader around. What this means is: virtually no body can or should trade.
More importantly, it means you need to be an exceptional and extremely unconventional human being. You should also be prepared to lose it all, including your family. Trust me, when the sh'it hits, no one gives a damn about you.
What all that means is one thing. If you are trying to be a trader making a living from trading from your home with no support, the amount of money you start with will have nothing to do with it. What are you going to do? Save enough money, learn how to trade properly, put your house in order, then trade? Don't make me laugh.:cheesy:
How much money do you need to trade for a living? That is a very interesting question. Everybody thinks that you will get wiped out trying to make more than 50% a year. So, assuming you live a modest life and need about £20k to live on, you would need £40k to trade with and you better be the best trader around. What this means is: virtually no body can or should trade.
More importantly, it means you need to be an exceptional and extremely unconventional human being. You should also be prepared to lose it all, including your family. Trust me, when the sh'it hits, no one gives a damn about you.
What all that means is one thing. If you are trying to be a trader making a living from trading from your home with no support, the amount of money you start with will have nothing to do with it. What are you going to do? Save enough money, learn how to trade properly, put your house in order, then trade? Don't make me laugh.:cheesy:
DaxDestroyer
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You should first ask me or inform you, but you judge
Keep flying with your tiny airplane hitting mountains in the fog
Happy new year BTW and if you want to discuss, just start over with something more interesting. You have to enter fog and accept to die, I reach my targets by the right mixture of risk and planning
Atilla
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That's deep and heavy...
Why do you have contempt for me Scalper? :innocent:
Why have contempt at all?
I think you should keep your emoitions out of trading and in your life... Works better that way.:cheesy:
FXSCALPER2
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You should first ask me or inform you, but you judge
Keep flying with your tiny airplane hitting mountains in the fog
Happy new year BTW and if you want to discuss, just start over with something more interesting. You have to enter fog and accept to die, I reach my targets by the right mixture of risk and planning
That wasn't targetted at you mate. It was a general comment.
DaxDestroyer
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FXSCALPER2
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That's deep and heavy...
Why do you have contempt for me Scalper? :innocent:
Why have contempt at all?
I think you should keep your emoitions out of trading and in your life... Works better that way.:cheesy:
I have a lot of contempt for a lot of people in this business. I despise people who sell courses, for example. I cannot stand people who give advice while it is clear they really don't know what they are talking about. Over the years I have read so many books, listened to 'traders', traded with people who consider themselves 'pros' and, with very few exeptions, people are just full of shi't when it comes to trading.
There are just too many cliches and ideas that do not stand the most basic scrutiny and yet people believe in them and and preach them. They tell you 'trading is a business' but then say you shouldn't borrow money to trade'. They say you cannot make 100% a year and do not find it surprising that ordinary people with average salaries try to trade and make a living doing it. It just doesn't add up.
It is simply illogical to try and make a living in a business where you are considered a trading god if you make 50% a year. It means you have to have a lot of money to start with. I have no problem with people believing that you need that much money to make it in trading. What is silly is to then suggest people should try it. If we accept it is exceptional to make 100% a year, year after year, then hardly anyone has the capital to be trading for a living. The question of how much money you need to trade can be answered only in light of how much return you can realistically expect from that capital. If returns of 100% are not realistic, then how many people have the capital to be trading full time? The answer is, 'very few'.
That being the case, you have to ask what kind of person makes it in trading. You have to be either rich already or you have to be very good and prepared to take extreme financial risk. The idea that you can be cautious and make a living trading is, therefore, not tenable. Whatever way you look at it, trading is not something people actually understand. Anyone who has an ordinary job, mortgage, car payments and kids and still makes enough money to live on is either taking a lof risk or must have a partner who pays the bills.
I am not saying it cannot be done. What I am saying is, the people who make it are prepared to do what other people don't do. It is a nice thing to believe you can have your cushy life and make enough money to leave the day job and trade for a living. Regardless of how hard or easy trading itself is, I am certain most people just cannot do it because most people want certainty. They like the comfort of the secure family life and regular income. That is a perfectly respectable way to live one's life. However, it is silly to want that safety and still make it in trading. Incidentally, that must be the main reason why people fail at this business.
If you are the type, you will make it with a small amount of money.
Atilla, as to keeping your emotion out of trading, that is another cliche. The trick is to use emotions to achieve what you want to achieve. The idea that you have to be calm and collected to make it in trading is another myth. You have to be crazy to do what I am doing. I must have traded 10 times today. Am I calm and relaxed all day doing this? No, I am not. That is the price I am prepared to pay. I am anxious, alert, often on edge, doing mental calculations, putting trades on, putting trades off. I may have positions in three pairs at the same time, with different brokers. Sometimes I miss lunch, I smoke a lot, I drink a million cups of tea. It is hard, it is fast and it is furious. It is not always like that. Sometimes you just sit there wating for hours. But when things happen, they happen all at once and it is rush. I love it but it not easy. I make absolutely no attempt to control my feelings. I can't do it so I might as well just go with it. I may burn out. I don't know. If it happens, I will do something else and stop trading. However, I am not going to kid myself trying to be zen-like about what I do.
It is comforting to believe you can have everything in order, have no emotions, be financially secure and trade for a living. That is not the reality.
DaxDestroyer
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Very honest! And even I
understand now, what you are talking about :clap:And YES, trading is consuming, BUT you, yes YOU decide, how the game is played.
My personal account has been everywhere between 4 mln down and 40 mln up, then I screwed myself on East German real estate bull**** to save taxes
But anyway, I trade, earn money and have a family, even help my kids doing their homework (sometimes a bit later in the case Daddy is caught in a trade)
My personal experience is, that emotions hurt my P&L. This has nothing to do with being HIGH ALERT and using bad language or missing lunch
I enter a position and KNOW, where I will exit! NO emotions! This is, I think, what Atilla meant.
And "trading is a business" means, to be high alert, to execute your gameplan, to keep emotions out of the play and to have a target which is consistent with your means, money, knowledge aso.
This is what I refered to. It makes no sense to start trading with 10k, if you have to pay 5k bills a month.
Realistic targets, no pink fantasy. You don't have to try it 5 times and going bankrupt.
I bank on my knowledge and risk management, not on leverage and luck.
Take care!
Mathemagician
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You are correct in that the expectations generally expressed in this thread and elsewhere are way off-base (orders of magnitude off-base, in fact -- to the extent that people are essentially planning on winning the lottery). The very best of the best traders tend to wind up with performance in this ballpark: Average annual return approximately equal to maximum peak-to-valley drawdown approximately equal to annualized standard deviation. I'm talking about traders with a multi-decade track record on a decent amount of capital here. In the short-term, much better performances are common, but not in the long-term. However, for any of us to believe realistically that we will perform above this level over the course of our entire trading careers is simply not facing reality.
That said...
With a 250k TRADING account, a 20% return yields a modest but respectable 50k per year with volatility that nearly anyone can stomach. This is not an unreasonable situation to find yourself in. For example, starting with 50k as a part-time trader and allowing yourself to trade at 1.5x while you are still gainfully employed one can reasonably achieve a 30% return with reasonable volatility. This gets you to 250k in the middle of year 6. If you add 10k of your income each year to your trading account, you can get there in year 4. This is an entirely realistic path to self-sufficiency and becoming a professional trader.
What trips people up is that they want to do it NOW and make 50k on 50k. Even those who get lucky and are propelled by sheer variance to a larger account get to thinking they're geniuses and never scale back to a reasonable trading level, leading to an inevitable blowup.
I respect your sentiment that it is not an easy path, nor is it a path that everyone has the discipline to follow. However, it is a goal that is far from impossible to achieve.
jj
4 million down and 40 million up? Is that UK Sterling or Jap Yen matey?
If your account is that large, of course you can afford to be ultra conservative and still make £40K a month. On a £4mln account, that's just 1%. Depends how much you want out of this, and what you need to support you and yours etc.
There is a risk level which would be considered by many to be 'reasonable' and beyond this the 'experts' would accuse you of being a gambler. This has nothing to do with your preferences but entirely on the odds of you wiping out your account based on assuming certain degrees of risk.
Anyone who wants to trade, not only for side or occasional income but 'to make a living' has no choice but to treat it as just that, a living i.e. business/profession. The training, preparation, apprenticeship, planning, marketing(not needed for trading of course but this is an analogy), funding, risk management/exit strategy HAS to be done beforehand. Many in the trading world, my old self included simply were not prepared to do this. We did not understand what it takes to be consistently successful in trading so we did crazy things and got punished accordingly. Things we would NEVER do in our regular businesses - like take a bank loan to buy more of a product we were struggling to sell in say a shop. Or start a business buying and selling items we did not understand or know the market for.
In my view, to be taken seriously, you have to treat it like any other business endeavour because THAT'S WHAT IT IS.
As for the cliche 'never borrow to trade', that certainly has it's place, but only for a novice trader aka gambler (at least until skills are established). For a professional or other experienced operator who nows how to take market money day in day out, it's nonsense. Almost all the pros I know of use leverage of one kind or another to varying degrees. For them it's not gambling, it's a business tool. If leverage initself was so bad for trading why is it so widely available? The point is, it MUST be used right, or not at all. Of course few really APPRECIATE this until they get burnt, usually a few times.
If your account is that large, of course you can afford to be ultra conservative and still make £40K a month. On a £4mln account, that's just 1%. Depends how much you want out of this, and what you need to support you and yours etc.
There is a risk level which would be considered by many to be 'reasonable' and beyond this the 'experts' would accuse you of being a gambler. This has nothing to do with your preferences but entirely on the odds of you wiping out your account based on assuming certain degrees of risk.
Anyone who wants to trade, not only for side or occasional income but 'to make a living' has no choice but to treat it as just that, a living i.e. business/profession. The training, preparation, apprenticeship, planning, marketing(not needed for trading of course but this is an analogy), funding, risk management/exit strategy HAS to be done beforehand. Many in the trading world, my old self included simply were not prepared to do this. We did not understand what it takes to be consistently successful in trading so we did crazy things and got punished accordingly. Things we would NEVER do in our regular businesses - like take a bank loan to buy more of a product we were struggling to sell in say a shop. Or start a business buying and selling items we did not understand or know the market for.
In my view, to be taken seriously, you have to treat it like any other business endeavour because THAT'S WHAT IT IS.
As for the cliche 'never borrow to trade', that certainly has it's place, but only for a novice trader aka gambler (at least until skills are established). For a professional or other experienced operator who nows how to take market money day in day out, it's nonsense. Almost all the pros I know of use leverage of one kind or another to varying degrees. For them it's not gambling, it's a business tool. If leverage initself was so bad for trading why is it so widely available? The point is, it MUST be used right, or not at all. Of course few really APPRECIATE this until they get burnt, usually a few times.
The reason the 'higher than normal' returns occur at the beginning phase of account growth has to do, in my opinion, primarily with volume and liquidity issues. Secondarily it translates into a measure of acceptable returns. At the beginning and with smaller trade sizes, executions and fills are reasonably straight forward. As long as good trade and account management is employed, the account will grow. Once the account size is such that the trades themselves will potentially move the market, position size will be limited. This therefore has the effect of levelling off the returns achieved against an ever growing account which cannot increase trade size due to market limitations. Basically you can't keep increasing trade size and frequency ad infinitum to match your growing account to achieve the same percentage return you were getting when your account was smaller.
This is why these extreme performances seem that much harder for the long term traders. The same analogy applies to the growth of companies. Go check Microsoft or Tesco's growth in its first ten years vs the last ten years. You'll notice that once they got to a certain SIZE, they simply could not maintain their earlier growth rates though very profitable and generating a lot of cash. At this stage, they grow best by buying and growing smaller businesses which can add value to their current mix and entering new markets they were not previously in. Is Tesco just a supermarket these days?
The trading analogy is to diversify an account into new instruments and markets.
Mathemagician
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As a professional trader, you do not need to compound endlessly. You only need to compound until you reach the point where you are earning what you need to make a living and save for retirement. From there, you can cease reinvesting all of your profits and grow modestly, at about the same rate as the liquidity in the market you trade. I cannot think of a trading style that would run into liquidity issues attempting to make 20% per year on a 1m account, or even a 5m account really.
jj
jj
Mathemagician
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Sorry, duplicate.
jj
jj
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DaxDestroyer
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I like your post. Only one point I see different. You seem to say: If you have money, you can be aggressive, if not, you must be aggressive.
To be honest. it is like telling Michael Schumacher, that he can be aggressive and to tell others they have to risk their life. This attitude does not lead to success!
You have to accept, that you need money, knowledge and TIME to be successful. Time is a big factor! If not the most important.
So as you start, you can influence only the knowledge and the "time of survival".
Money you have or have not
If you have the knowledge and time, success comes to you!
Money only guarantees NOTHING!
So I stick to my opinion. (I started out with 2.000 DM and mate, the currency is not Yen, but Euro) With time, riskmanagement and the execution of your gameplan, you can reach close to everything. If not, you are a gambler hoping to be lucky.
8% a month is not realistic. And I had years, where I made 40% every month. BUT BE AWARE OF THE DRAWDOWN!!! OMG :smart::whistling
DaxDestroyer
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what is wrong with people on here, why would you want to discourage people so badly, your style of trading may require you to have over £100,000 or £250k, but many people just don't need that kind of bank and are willing to have there risk levels a little higher, don't mean they won't make money as many do, especiallly in the futures markets.
Imo you don't need that kind of bank to start out, with compounding you could quickly build an account up, and also many peoples situations are different, for example some people may diversify and have different income streams, so their risk levels can afford to be higher.
I've been talking to a couple of american tarders for some time now who trade e-minis and average $400 a day on 8 contacts, that may seem ridculously high risk to some but they do it.
If i re-morgaged my house, like many could, i could put £100k into my bank, but i don't believe it is required............im quite happy to start my bank with £25,000 and risk 2%on every trade i make, You could quite realistically make $1000 a week with this kind of risk model, now to me this would be my goal and i would be happy with this, and when the time comes, with compounding, my return will increase, but my risk won't. I feel confident i could do this, and as i run my own business too and other income streams i can handle the risk, this would be my business model for my trading. Some others may be full time traders so i understand their risk levels may be different, but this is exactly my point, everyone is different and in different situations in their lifes and quite willing to accept different money management rules and risk tollerence, don't mean that you can't make money on a small bank because you can of course.
jason
Imo you don't need that kind of bank to start out, with compounding you could quickly build an account up, and also many peoples situations are different, for example some people may diversify and have different income streams, so their risk levels can afford to be higher.
I've been talking to a couple of american tarders for some time now who trade e-minis and average $400 a day on 8 contacts, that may seem ridculously high risk to some but they do it.
If i re-morgaged my house, like many could, i could put £100k into my bank, but i don't believe it is required............im quite happy to start my bank with £25,000 and risk 2%on every trade i make, You could quite realistically make $1000 a week with this kind of risk model, now to me this would be my goal and i would be happy with this, and when the time comes, with compounding, my return will increase, but my risk won't. I feel confident i could do this, and as i run my own business too and other income streams i can handle the risk, this would be my business model for my trading. Some others may be full time traders so i understand their risk levels may be different, but this is exactly my point, everyone is different and in different situations in their lifes and quite willing to accept different money management rules and risk tollerence, don't mean that you can't make money on a small bank because you can of course.
jason
Well I take my hat off to anyone who can regularly make $1000 (£?) a week from £25,000 of capital. Achieving those kind of regular returns would be fantasic and suggests that the success rate is well north of 75%.
So in my own case although I have achieved an IRR of just over 50% there have been periods of losses extending to 3 consecutive months, so it would be difficult to have a regular income with a decent sized "bank" to draw on.
So in my own case although I have achieved an IRR of just over 50% there have been periods of losses extending to 3 consecutive months, so it would be difficult to have a regular income with a decent sized "bank" to draw on.
i mean £500 a week or $1000 on a £25,000 bank or $50,000 bank..........don't try and tell me this can't be done..............there is a quote from somebody on this forum somewhere that says 'there will be people on this forum that say it can't be done, drive around these people', to me that sums it up perfectly. Just because you can't and don't know how does not mean other's can't.....................there are so many different systems and methods out there..........look at people that trade spreads in prop houses, are you gonna tell me they don't make money, and just look at some of their trades as i did recently in a interview at one, it would probably give some of you a heart attack. Some people trade fundamentals, some day trade, some swing, some prefer market neutrel positions, some prefer directional, some trend trade, some just trade ranges etc................see all the different styles, and because of this there are many different risk models people are willing to accept, you can't just say things like it can't work or imply it, as its too negative, and to me trading is all about having a postive attitude. Ive come along way in my trading and i would say to any newbie not to give up, be realistic with yourself, be honest with yourself, trade your systems untill consistently profitable on a simulator, no matter how long it takes, then when you feel you have built yourself your own little 'casino' model meaning you have a system that can accept drawdowns because you know like a casino you'll get it all back and more, when you feel like this its time to start real money but in very small stakes and build it up.
jason
