How much capital do you need to trade full time?

[jayjay121]

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

dax, i got no problem being called a gambler, as to me i enjoy taking chances, and everyday things can sometimes be a gamble................why is 8% a month not realistic, just because you said so, com'on why do we all think we know it all when there are so many probablilities in the markets..........see i remenber when i was a newbie, reading posts like this just put me off trading as its all too negative. How do we actually know if you are making money trading?, how do we know if people on here are actually lying or if people are so ego driven they just come on here to show off..........im not saying anyone is doing this, im really not, im just saying you gotta be carefull what you interpret.


jason

 

[Baldwreck]

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,

No that not what I was saying at all - all I was saying is that to achieve that week in week out with no losing weeks would be fantastic. I've just never heard of anyone being able to achieve that kind of consistency - but perhaps you can tell me otherwise.

 

[Mathemagician]

This thread is about being a properly banked professional trader, not someone trading a small account on the side looking to hit it big. Nobody says you can't do 200% per year on a small amount of capital that you don't care if you lose. But, if trading is to be the sole source of income for you for the rest of your life (i.e. you are a professional) then you must reduce your variance and that means trading small -- much smaller than you are talking about here -- and not with borrowed money. Making a good-sized absolute return while trading small requires a relatively large account. There's not much one can do about this.

jj

 

[seguna]

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.
OMG :smart::whistling

Hi, not sure I get the gist of the above but I don't think it's not what I'm saying. The decision whether to be aggressive or not (i.e. higher risk trading ) depends on what a person understands about trading and what they want to get out of it. For me it's not initially about account size. I.e. you can be just as aggressive with a small account as you can a big one. If you risk 10% and lose 10 times in a row, your account is gone - large or small.

What I was saying (meant to say), is that it's easier to manage trades and execute entries and exits closer to where you want without slippage and without market impact at smaller trade sizes than larger ones. I accept that accounts can grow to large sizes before this starts to happen. It's more a trade size issue than an account size issue really. Some markets are far more liquid than others.

 

[seguna]

Peeps

At the end of day, a gambler can do whatever he wants and is happy with. If he gets away with it, fine, the odds are that he won't.

A professional on the other needs to think, plan and act like one and be funded like one.

For me this is what distinguishes the two. It's not meant to dissuade anyone from trading. Some of us are just sharing our experience in the hope that we can all help each other. We should all know what we are getting involved in and not stick our heads into pipes and start dreaming.

I too do not like some of the scaremongering that goes on in these forums but generally I find it balances itself out.

 

[PualoP]

Here's what legendry pit trader Lewis Borsellino says about being capitalised to trade for a living:

 

[DaxDestroyer]

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

Whatever you say, Sir I think it is demanding, and telling the truth should be allowed because we are not here to promote trading by itself. We are here to help ourselves and others to get better! Just my opinion.

 

[DaxDestroyer]

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

I am glad to read, that we are coming closer
50k and 500 profit sounds different
anyway, some are better, others not, so I stick to my opinion and still appreciate your thoughts!

 

[DaxDestroyer]

dax, i got no problem being called a gambler, as to me i enjoy taking chances, and everyday things can sometimes be a gamble................why is 8% a month not realistic, just because you said so, com'on why do we all think we know it all when there are so many probablilities in the markets..........see i remenber when i was a newbie, reading posts like this just put me off trading as its all too negative. How do we actually know if you are making money trading?, how do we know if people on here are actually lying or if people are so ego driven they just come on here to show off..........im not saying anyone is doing this, im really not, im just saying you gotta be carefull what you interpret.


jason

again my friend whatever you say. I won't fight with you, I just tried to express my honest opinion. The rest is up to you. If you think, that someone lies or shows off, do it like me. Ignore him

 

[DaxDestroyer]

This thread is about being a properly banked professional trader, not someone trading a small account on the side looking to hit it big. Nobody says you can't do 200% per year on a small amount of capital that you don't care if you lose. But, if trading is to be the sole source of income for you for the rest of your life (i.e. you are a professional) then you must reduce your variance and that means trading small -- much smaller than you are talking about here -- and not with borrowed money. Making a good-sized absolute return while trading small requires a relatively large account. There's not much one can do about this.

jj

I fully agree!

 

[DaxDestroyer]

Peeps

At the end of day, a gambler can do whatever he wants and is happy with. If he gets away with it, fine, the odds are that he won't.

A professional on the other needs to think, plan and act like one and be funded like one.

For me this is what distinguishes the two. It's not meant to dissuade anyone from trading. Some of us are just sharing our experience in the hope that we can all help each other. We should all know what we are getting involved in and not stick our heads into pipes and start dreaming.

I too do not like some of the scaremongering that goes on in these forums but generally I find it balances itself out.

With your last 2 posts I totally agree!!! Cheers Carlos

 

[jayjay121]

ok sorry if i have annoyed anyone or offended anybody, but i just want a healthy debate and hear so many different opinions on this over the years that i just gotta thrash it out.

Firstly, please tell me why, exactly why we need such a large bank so i can understand as i may be a bit ignorant............then can anyone tell me why trading in any capacity is not gambling, please as i don't generally know, and i've always seen it this way, even grey1 on these boards who is probably one of the most consistent traders on here and posts his p & l to prove that, is taking risks, even if they are so small and even if his macci, market direction, top down is all correct there is still a chance he could lose on that particular trade at that moment, surely this is gambling as there is risk, it don't matter if he bets 1 percent of his bank and it is so un-likely he'll ever go bust, risk is still involved so its gambling. Can someone please put me right on this as if i've got it wrong then i really wanna know so i can change my philosophy on this.

Also lastly, say your drawdowns never get that bad and you have over allowed yourself with the 1 percent or less rule of your bank, is this not wasting the money, and maybe the funds could be better spent on other investments??.............also why is it traders in prop houses make consistent money, ok not all of them granted, but some do or they could not do it as the costs are so high, and their risk management is not in line with what people are saying on this thread.


please if someone could answer the above points, you'll be doing me a favour, as like i said i may be wrong and i can accept that.

jason

 

[DaxDestroyer]

ok sorry if i have annoyed anyone or offended anybody, but i just want a healthy debate and hear so many different opinions on this over the years that i just gotta thrash it out.

Firstly, please tell me why, exactly why we need such a large bank so i can understand as i may be a bit ignorant............then can anyone tell me why trading in any capacity is not gambling, please as i don't generally know, and i've always seen it this way, even grey1 on these boards who is probably one of the most consistent traders on here and posts his p & l to prove that, is taking risks, even if they are so small and even if his macci, market direction, top down is all correct there is still a chance he could lose on that particular trade at that moment, surely this is gambling as there is risk, it don't matter if he bets 1 percent of his bank and it is so un-likely he'll ever go bust, risk is still involved so its gambling. Can someone please put me right on this as if i've got it wrong then i really wanna know so i can change my philosophy on this.

Also lastly, say your drawdowns never get that bad and you have over allowed yourself with the 1 percent or less rule of your bank, is this not wasting the money, and maybe the funds could be better spent on other investments??.............also why is it traders in prop houses make consistent money, ok not all of them granted, but some do or they could not do it as the costs are so high, and their risk management is not in line with what people are saying on this thread.


please if someone could answer the above points, you'll be doing me a favour, as like i said i may be wrong and i can accept that.

jason

Nothing personal, Jason. Don't put yourself tags as "ignorant".

I don't know, what kind of a bankroll you need to perform. It is all about statistics.

You can read books from Ralph Vince or others, pick up formulas and calculate your risk of ruin. So if you do trading as a business, this is a valuable information, right?

To calculate it, you obviously need to have a grip on the strategy (hopefully one with an edge), which you trade. Your personal successrate and the relationship between the average winners/losers will determine the capital you need.

As trading is a business for me, I always want to have enough capital to survive my drawdowns and(!) keep trading without being cut in size dramatically. Therefore I came up with the numbers.

The difference between gambling and trading?

Gambling is taking chances without a plan. It is betting on your football team, buying stocks "because they are just too low", betting on Elvis alive or Britney Spears becoming US president ANd yes, gamblers can have a decent income and a good life doing this, but most probably, some time they go out of "business" as the edge is tilted against them as in roulette or Black Jack.

Trading involves a gameplan including an EDGE. Involves risk management INSURING, you will be there trading tomorrow as well. It is like becoming the BANK in a CASINO. You should be certain, that you will win over the long run.

BTW To be honest, I know a lot of people, who are gamblers, but call themselves traders , so it is understandable, that you are slightly confused.

Take care! Carlos

 

[seguna]

Jason, I agree with DD.

Gambling as you can see from DD's examples, is based on hope and luck, pure and simple. It is HUGELY different from trading, of the consistent, money making variety.

Sucessful Trading (or any other business or venture), even though it ALWAYS involves risk, must have an EDGE, something that ALMOST GUARANTEES success.:smart:
Something that significantly REDUCES THE ODDS OF YOU LOSING MONEY. By reducing your risk of loss, of course you are boosting your chances of winning. In trading, there are only Four possible outcomes to EVERY trade:-
1. A LARGE WIN
2. A Small WIN
3. A Small Loss
4. A LARGE Loss
(No need to get too technical with break evens, medium wins etc). If the trader/investor/business person can eradicate the possibility of a LARGE LOSS, and engage a system that promotes the potential of 1-3 happening, success will be the result. I know this is boring repetition for the doyens on this board but it's helpful for the newbies.

In practice, this is not as easy as said. With the right MENTORING and EDUCATION though, it is HUGELY possible to achieve.

 

[DaxDestroyer]

Jason, I agree with DD.

Gambling as you can see from DD's examples, is based on hope and luck, pure and simple. It is HUGELY different from trading, of the consistent, money making variety.

Sucessful Trading (or any other business or venture), even though it ALWAYS involves risk, must have an EDGE, something that ALMOST GUARANTEES success.:smart:
Something that significantly REDUCES THE ODDS OF YOU LOSING MONEY. By reducing your risk of loss, of course you are boosting your chances of winning. In trading, there are only Four possible outcomes to EVERY trade:-
1. A LARGE WIN
2. A Small WIN
3. A Small Loss
4. A LARGE Loss
(No need to get too technical with break evens, medium wins etc). If the trader/investor/business person can eradicate the possibility of a LARGE LOSS, and engage a system that promotes the potential of 1-3 happening, success will be the result. I know this is boring repetition for the doyens on this board but it's helpful for the newbies.

In practice, this is not as easy as said. With the right MENTORING and EDUCATION though, it is HUGELY possible to achieve.

Thanks mate

 

[jayjay121]

Jason, I agree with DD.

Gambling as you can see from DD's examples, is based on hope and luck, pure and simple. It is HUGELY different from trading, of the consistent, money making variety.

Sucessful Trading (or any other business or venture), even though it ALWAYS involves risk, must have an EDGE, something that ALMOST GUARANTEES success.:smart:
Something that significantly REDUCES THE ODDS OF YOU LOSING MONEY. By reducing your risk of loss, of course you are boosting your chances of winning. In trading, there are only Four possible outcomes to EVERY trade:-
1. A LARGE WIN
2. A Small WIN
3. A Small Loss
4. A LARGE Loss
(No need to get too technical with break evens, medium wins etc). If the trader/investor/business person can eradicate the possibility of a LARGE LOSS, and engage a system that promotes the potential of 1-3 happening, success will be the result. I know this is boring repetition for the doyens on this board but it's helpful for the newbies.

In practice, this is not as easy as said. With the right MENTORING and EDUCATION though, it is HUGELY possible to achieve.

you both make some good points here and thanks for explaining your views.........i like the 4 points above, they make sense to me as although you cannot take the complete risk away, you can manage it in a way that you have an overall edge, and this should be what we aim for.
Dax, my views on them kind of gamblers you discribe above to me are 'mug punters' and dreamers, when i was talking about gambling i didn't really include these type of people, i should have, sorry............but to me im very glad to hear your opinions on gamblers as im so deep into my trading i just forgot people can actually be like this and are rightly classed as gamblers, but to me i was never talking about these kinds of people, i was talking of the professional traders and gamblers using betfair and laying horses etc..........people are making a living doing this and they do have a plan and an edge in thier markets................i guess there is just many different clasifications of a gambler to many different people.
Anyway thanks for your views, they have helped me understand the term gambling a lot more clearer, but to be honest with you i still don't understand why we need such a huge bank?, i was thinking of this and can you coorect me if im wrong. Is it because with a large bank and a profitable trading system(s), you could trade many instruments at once and use something like radarscreen to scan the set-ups and then trade as many as possible once the set-up is there, because this way i could understand having a big bank as if you have a profitable system why not trade as many set-ups on forex, futures, stocks as you can because doing this will reduce your risk overall, am i right or am i chatting **it.


jason

 

[DaxDestroyer]

you both make some good points here and thanks for explaining your views.........i like the 4 points above, they make sense to me as although you cannot take the complete risk away, you can manage it in a way that you have an overall edge, and this should be what we aim for.
Dax, my views on them kind of gamblers you discribe above to me are 'mug punters' and dreamers, when i was talking about gambling i didn't really include these type of people, i should have, sorry............but to me im very glad to hear your opinions on gamblers as im so deep into my trading i just forgot people can actually be like this and are rightly classed as gamblers, but to me i was never talking about these kinds of people, i was talking of the professional traders and gamblers using betfair and laying horses etc..........people are making a living doing this and they do have a plan and an edge in thier markets................i guess there is just many different clasifications of a gambler to many different people.
Anyway thanks for your views, they have helped me understand the term gambling a lot more clearer, but to be honest with you i still don't understand why we need such a huge bank?, i was thinking of this and can you coorect me if im wrong. Is it because with a large bank and a profitable trading system(s), you could trade many instruments at once and use something like radarscreen to scan the set-ups and then trade as many as possible once the set-up is there, because this way i could understand having a big bank as if you have a profitable system why not trade as many set-ups on forex, futures, stocks as you can because doing this will reduce your risk overall, am i right or am i chatting **it.


jason

You are at least not wrong the main reason for me is: You have a lot of margin of ERROR on your side and therefore you will SURVIVE. This is the main point. We were talking about the "close to ideal" situation, not what might be possible. Look, I started with 2.000 DM, broke EVERY moneymanagement rule as I was not aware of it, but I'n still in the game. Even gaining money
Just my experience taught me, that it is very important to have a lot of things in place.

My expressed views were about being successful BECAUSE you are prepared, nothing else. Because there are to many stories about the guy who starts out with 10k makes 150k, loses all and never comes back.

Even here on this site

 

[jayjay121]

hi guys again, ive been pm'ing a few successfull traders i know of on other sites and ask them if you could trade succesfully and make like $500 a week on a $25,000 bank, this was 'the rumpled one's' reply, im still waiting for others.........................





IGNORE WHAT OTHERS SAY.

If you are trading FOREX with $25,000 you can safely make that in one or two trades a day, EVERYDAY!

That's what the buyzone can do, IF YOU TRADE IT PROPERLY.



i expect ill get other replies along the same line, can you see now why im so confussed?

some of you guys here are insisting on big banks like £100k or more and others think that is no-way needed..............what do you guys think about this statement from 'tro', im sure you all heard about him, his been on the radio's and everything and is genuwin i believe.


jason

 

[DaxDestroyer]

Opinions diverge sometimes, Jason
All the best for you!
Take care!
I think, that all has been said about it, let's don't repeat it always.
How different people think, you can see from the poll: Evenly divided

 

[Atilla]

hi guys again, ive been pm'ing a few successfull traders i know of on other sites and ask them if you could trade succesfully and make like $500 a week on a $25,000 bank, this was 'the rumpled one's' reply, im still waiting for others.........................





IGNORE WHAT OTHERS SAY.

If you are trading FOREX with $25,000 you can safely make that in one or two trades a day, EVERYDAY!

That's what the buyzone can do, IF YOU TRADE IT PROPERLY.



i expect ill get other replies along the same line, can you see now why im so confussed?

some of you guys here are insisting on big banks like £100k or more and others think that is no-way needed..............what do you guys think about this statement from 'tro', im sure you all heard about him, his been on the radio's and everything and is genuwin i believe.


jason

You are looking for a single definitive answer where there is not one! Morpheus: Unfortunately, no one can be told what the Matrix is. You have to see it for yourself. Quote from the the Movie the Matrix...

Why not trial the different systems and form an opinion of your own.

Your confusion will then turn into an opinion that'll no doubt confuse others... :cheesy: