I was doing pretty well when I first started until the SB company made things very difficult, basically because I had no doubt's..one of the reason's the company made it difficult was because somebody I know of went from £5-£150 p/point in well under a year & we were trading the same instrument the same way.
as far as I can see this is the only restriction if u haven't much capital.........is u have to spreadbet, but if u can make 200 net points a month.it's all down to your own belief, or lack of it , at the end of the day
Jay
as far as I can see this is the only restriction if u haven't much capital.........is u have to spreadbet, but if u can make 200 net points a month.it's all down to your own belief, or lack of it , at the end of the day
Jay
Grubs & boy,
this was when I first started & it really threw a spanner in the works for me & knocked my confidence for six, I had grown my initial capital by 150% in my first month as well.......This did me a favour in the long run as it made me learn what I was doing.
I went on a period of analysis after this, a long one, I knew I had to develop a strategy that couldn't be affected by anything & that I could apply with belief......I had to rebuild my confidence.
The Name Change.........no major reason....just wanted something apt. that wasnt to close to my real full name.
p.s. dont know what the guy is doing now, last I heard he moved over to direct access, but I know he started small & should think he is still doing well.
if u haven't already seen it he posted a weeks worth of D4F records here , quite old now http://www.learningtotrade.com/trading_course_may.html
not bad from small beginnings.......should give all newbies some hope
Jay
this was when I first started & it really threw a spanner in the works for me & knocked my confidence for six, I had grown my initial capital by 150% in my first month as well.......This did me a favour in the long run as it made me learn what I was doing.
I went on a period of analysis after this, a long one, I knew I had to develop a strategy that couldn't be affected by anything & that I could apply with belief......I had to rebuild my confidence.
The Name Change.........no major reason....just wanted something apt. that wasnt to close to my real full name.
p.s. dont know what the guy is doing now, last I heard he moved over to direct access, but I know he started small & should think he is still doing well.
if u haven't already seen it he posted a weeks worth of D4F records here , quite old now http://www.learningtotrade.com/trading_course_may.html
not bad from small beginnings.......should give all newbies some hope
Jay
Trader333
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sidinuk,
It is well known that entrepreneurs all have similar traits that have allowed them to be successful. However, these same traits would make both Richard Branson and Stelios Haji-Ioannou hopeless as traders. The reason for this, (as demonstrated on the currently running BBC 2 programme), is that one of the key traits is that they will cheat or change the rules in order to win at something and if unable to will use manipulation in order to win.
Unfortunately in trading that will result in a loss of all capital as it is just not possible to change the rules of the market, manipulate it or cheat in order to make profits. In fact one of the key abilities is to do just the opposite by sticking to the rules and not believing that you can somehow make the marlket do what you wish.
Paul
It is well known that entrepreneurs all have similar traits that have allowed them to be successful. However, these same traits would make both Richard Branson and Stelios Haji-Ioannou hopeless as traders. The reason for this, (as demonstrated on the currently running BBC 2 programme), is that one of the key traits is that they will cheat or change the rules in order to win at something and if unable to will use manipulation in order to win.
Unfortunately in trading that will result in a loss of all capital as it is just not possible to change the rules of the market, manipulate it or cheat in order to make profits. In fact one of the key abilities is to do just the opposite by sticking to the rules and not believing that you can somehow make the marlket do what you wish.
Paul
you need to seperate the trading capital from the living amount - and you need to have enough to live for at least a year ( could be longer) and still be able to trade full time evey single day
having a big wad for trading is as dangerous as it is useful - and all those who start with a biggish wad tend to lose it - but you are not going to get a living off spreadbetting - so you need to enough to trade futures - and you got to look at 25K and just trade in one lots until you have traded for at least a year
if its all going well before that - you will know - and you will also know if it is going badly and you need to take longer
having a big wad for trading is as dangerous as it is useful - and all those who start with a biggish wad tend to lose it - but you are not going to get a living off spreadbetting - so you need to enough to trade futures - and you got to look at 25K and just trade in one lots until you have traded for at least a year
if its all going well before that - you will know - and you will also know if it is going badly and you need to take longer
* If you want to trade futures you are going up against some of the quickest and brightest minds on the planet, trading for the biggest banks *
Totally false - best outright traders do NOT work for banks , they are with hedges and futures funds . Do a search on t2w , been done to death.
* Do you really think that you can beat them having just done an 8 hour shift or in between sales meetings in the office. *
At least this part is true
* 'Market Wizards' in early 1990 . It's a great book but NONE of the people claim to have made it with $1000 from their own pocket *
Patently false . You need to re read the book.
New Market Wizards - Randy McKay in his first year turned $2,000
into $70,000 ( p75 ) . THAT'S 35 x HIS START UP.
So it's utter nonsense to suggest that this cannot be done . Clearly it can, otherwise it would NOT have spawned 3 MW books.
What is for sure is that VERY FEW can do it , perhaps 1% of the trading population . only 25% even break even.
What is surer is that people who use the market as an alternative casino can NEVER do it .
In a trading contest with sensible money , not small and not too big , I take the guy who has turned 500 into 4,000 over a guy who gets 25% net on his 400k . ANYDAY , ANTIME .
Why ? keep posted .
I just saw this :
* if u haven't already seen it he posted a weeks worth of D4F records here , quite old now http://www.learningtotrade.com/trading_course_may.html *
Each losing trade = circa 10k , each winner about the same .
Reward to Risk : 1: 1 - BAD in my book.
individual drawdowns of circa 25% of start up - BIG RISK = bad.
Gets margined for over 50% of SU for hanging on to losing positons - Very bad .
To me this is A VERY RISKY player .I certainly could not stomach that sort of R:R.
Totally false - best outright traders do NOT work for banks , they are with hedges and futures funds . Do a search on t2w , been done to death.
* Do you really think that you can beat them having just done an 8 hour shift or in between sales meetings in the office. *
At least this part is true
* 'Market Wizards' in early 1990 . It's a great book but NONE of the people claim to have made it with $1000 from their own pocket *
Patently false . You need to re read the book.
New Market Wizards - Randy McKay in his first year turned $2,000
into $70,000 ( p75 ) . THAT'S 35 x HIS START UP.
So it's utter nonsense to suggest that this cannot be done . Clearly it can, otherwise it would NOT have spawned 3 MW books.
What is for sure is that VERY FEW can do it , perhaps 1% of the trading population . only 25% even break even.
What is surer is that people who use the market as an alternative casino can NEVER do it .
In a trading contest with sensible money , not small and not too big , I take the guy who has turned 500 into 4,000 over a guy who gets 25% net on his 400k . ANYDAY , ANTIME .
Why ? keep posted .
I just saw this :
* if u haven't already seen it he posted a weeks worth of D4F records here , quite old now http://www.learningtotrade.com/trading_course_may.html *
Each losing trade = circa 10k , each winner about the same .
Reward to Risk : 1: 1 - BAD in my book.
individual drawdowns of circa 25% of start up - BIG RISK = bad.
Gets margined for over 50% of SU for hanging on to losing positons - Very bad .
To me this is A VERY RISKY player .I certainly could not stomach that sort of R:R.
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Well said MMA
agree with all u said & I know it can be done. obviously it takes huge amounts of work, selfbelief & courage........& it is not a necessity for u to have a financial background, live in london & have 100k to develop good trading skills.
Re: the posted records, yes James has got a good head for risk, but if he is always up, this is good for him......this is a personal thing.
& he did work on a 3:1 R&R, the results u see of because of a very certain stop & exit technique & doubling up method, which the later u fit to level of risk, but it is a technique which ensures u cannot fail. but this was just an example for the benefit of wanting to hear positive
Jay
agree with all u said & I know it can be done. obviously it takes huge amounts of work, selfbelief & courage........& it is not a necessity for u to have a financial background, live in london & have 100k to develop good trading skills.
Re: the posted records, yes James has got a good head for risk, but if he is always up, this is good for him......this is a personal thing.
& he did work on a 3:1 R&R, the results u see of because of a very certain stop & exit technique & doubling up method, which the later u fit to level of risk, but it is a technique which ensures u cannot fail. but this was just an example for the benefit of wanting to hear positive
Jay
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zow said:
Well as £50k effectively gets you £500k of capital to trade with through CFD's - I'm really not sure how much you would actually require? I started with this sum ( and no, mma you can relax, I'm NOT going to feed your anger by giving you any more numbers) - and it's proven more than adequate.
stevet said:
Stevet I'm not so sure. Perhaps it all comes down to discipline? personally, I keep most of my cash in my 3 trading accounts, and just transfer a lump sum to my current account each month that roughly equates to my living costs. I'd hate to miss a trade because my capital was in the wrong place ( say a interest bearing bank account vs my CFD/SB account)
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MMA
I'm happy to debate this, do you want to get your copy out?
Randy McKay is featured in 'The New Market Wizards' first published in the US in 1992, not the original 'Market Wizards'. I have a first edition again bought at relatively great expense as an import.
In my copy on p74 (not 75) it does indeed say he managed to 'parlay an initial $2,000 stake into $70,000 in his first calendar year'. I don't doubt at all he did this and I bet many others in his situation did the same. But that is the 'headline grabbing' figure, have YOU read further?
Firstly this is in 1972, what do you think the equivalent of $2000 is in today's money? Well over $10,000. (close to $20k?)
Secondly - he was lent $5000 by his brother (p81) of which he put $3000 away to live on i.e. he didn't have to live off any profits.
Thirdly - he had the use of a FREE seat on the IMM (also p81) how much do you think that would be worth now? i.e. he had zero daily running costs.
Fourthly - He was in at the EARLY days of a FLOOR exchange. A BIG BIG double bonus. 99%+ of floor traders on liffe made money because they could see the flows and rip off the 'paper'. (hope you know what i mean by paper here). Is it any wonder they complained so much when it switched to electronic trading?
P82 - "It's amazing that you could have made so much.........[reply] It is. Part of the reason is that the price inefficiencies were very great in those days because of the tremendous amount of ignorance..."
i.e. they made bid/offer spreads to drive a truck through and they could always be on the right side of it. Shooting fish in a barrel.
Fifthly(?) - P85: "One of my goals was to become a larger trader as quickly as possible, because I felt the business was just too damn easy and that it couldn't possibly last forever. Fortunately I had that insight, because trading is much more difficult now than it was then". P86: " Trading has not only become much harder, but it has changed......timing was not that critical. Now it's no longer sufficient to assume that because you trade with the trend, you'll make money". Said in 1991 and I bet a million he'd say it is even more difficult in 2003.
Sixth - He describes on p83 to p85 getting lucky with one massive trade that propelled him in one go into the really big league. Nothing wrong with that, you make your own luck in this game. (but do markets move like that now?)
Seventh - A MAJOR one this, back on bottom P74: "This pattern of steadily increasing annual gains was broken when McKay decided to switch from trading on the floor to trading at home". i.e. despite his millions and many years experience for a year or so he had great difficulty trading from home.
So, to address your point also DAXTRADER, if more people had well over $10k AND access to an inefficient pit there would be alot more small-to-large trader success stories today.
Maybe you need to re-read that book mma?
mma said:
I'm happy to debate this, do you want to get your copy out?
Randy McKay is featured in 'The New Market Wizards' first published in the US in 1992, not the original 'Market Wizards'. I have a first edition again bought at relatively great expense as an import.
In my copy on p74 (not 75) it does indeed say he managed to 'parlay an initial $2,000 stake into $70,000 in his first calendar year'. I don't doubt at all he did this and I bet many others in his situation did the same. But that is the 'headline grabbing' figure, have YOU read further?
Firstly this is in 1972, what do you think the equivalent of $2000 is in today's money? Well over $10,000. (close to $20k?)
Secondly - he was lent $5000 by his brother (p81) of which he put $3000 away to live on i.e. he didn't have to live off any profits.
Thirdly - he had the use of a FREE seat on the IMM (also p81) how much do you think that would be worth now? i.e. he had zero daily running costs.
Fourthly - He was in at the EARLY days of a FLOOR exchange. A BIG BIG double bonus. 99%+ of floor traders on liffe made money because they could see the flows and rip off the 'paper'. (hope you know what i mean by paper here). Is it any wonder they complained so much when it switched to electronic trading?
P82 - "It's amazing that you could have made so much.........[reply] It is. Part of the reason is that the price inefficiencies were very great in those days because of the tremendous amount of ignorance..."
i.e. they made bid/offer spreads to drive a truck through and they could always be on the right side of it. Shooting fish in a barrel.
Fifthly(?) - P85: "One of my goals was to become a larger trader as quickly as possible, because I felt the business was just too damn easy and that it couldn't possibly last forever. Fortunately I had that insight, because trading is much more difficult now than it was then". P86: " Trading has not only become much harder, but it has changed......timing was not that critical. Now it's no longer sufficient to assume that because you trade with the trend, you'll make money". Said in 1991 and I bet a million he'd say it is even more difficult in 2003.
Sixth - He describes on p83 to p85 getting lucky with one massive trade that propelled him in one go into the really big league. Nothing wrong with that, you make your own luck in this game. (but do markets move like that now?)
Seventh - A MAJOR one this, back on bottom P74: "This pattern of steadily increasing annual gains was broken when McKay decided to switch from trading on the floor to trading at home". i.e. despite his millions and many years experience for a year or so he had great difficulty trading from home.
So, to address your point also DAXTRADER, if more people had well over $10k AND access to an inefficient pit there would be alot more small-to-large trader success stories today.
Maybe you need to re-read that book mma?
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this debate is getting beyond the original question now but u have every right to carry on. Just went back to the start of the thread to read the original question......I believe skimbleshanks answered it all in her first reply, this should probably be re-read & poss read every day by all wanting to move on with there trading.................poss even print it out & put it above your screens :
You learn to double your money. And then double it again, etc. In other words you are training yourself to be consistent in your trading. No big drawdowns, no emotion, no ego, no greed, no fear.
So your first objective is to build your 1.5k into 3k. If you can't do that, then you just have to go back to square one until you can. This is by far the hardest thing you will ever do - but once you can double your initial money, then you are well on the road.
One month I made 1,100%, and thought I'd found the goose which laid the golden eggs. Next month I realised that it was just a scrawny old hen I'd found, and my golden eggs had rolled away into someone else's account. You'll learn good lessons like this all the way, so learn from them, and never ever get angry.
Top Marks Skimble
You learn to double your money. And then double it again, etc. In other words you are training yourself to be consistent in your trading. No big drawdowns, no emotion, no ego, no greed, no fear.
So your first objective is to build your 1.5k into 3k. If you can't do that, then you just have to go back to square one until you can. This is by far the hardest thing you will ever do - but once you can double your initial money, then you are well on the road.
One month I made 1,100%, and thought I'd found the goose which laid the golden eggs. Next month I realised that it was just a scrawny old hen I'd found, and my golden eggs had rolled away into someone else's account. You'll learn good lessons like this all the way, so learn from them, and never ever get angry.
Top Marks Skimble
DT - the fact that these guys were able to increase deal size by 100x inside 12 months is the reason that they are in Market Wizards - it should not be taken as the norm, and I would suggest that a trading business plan that uses this as a template is bound to fail 999 times out of 1000.
dwaddell - you ask how other traders here started. I started with £4k trading capital in 1995 and my initial objective was to have enough to pay-off the interest only part of my mortgage within 8 years (took me to age 50). Thanks to the tech boom, built it to enough to clear entire mortage 2x over by age 48.
My trading capital is split between 2 accounts and the majority of my income comes from trading FTSE100 index options over a 1 - 6 week time frame. I top this up with daytrading US stocks, but I find that stressful and it doesn't really suit my psychological makeup. With options I don't have to sit in front of the screen all day and I can do other things like property development projects, walking the local coast path (Devon estuaries have been unbelievably beautiful this autumn) or gliding, all of which are more important than chasing money.
dwaddell - you ask how other traders here started. I started with £4k trading capital in 1995 and my initial objective was to have enough to pay-off the interest only part of my mortgage within 8 years (took me to age 50). Thanks to the tech boom, built it to enough to clear entire mortage 2x over by age 48.
My trading capital is split between 2 accounts and the majority of my income comes from trading FTSE100 index options over a 1 - 6 week time frame. I top this up with daytrading US stocks, but I find that stressful and it doesn't really suit my psychological makeup. With options I don't have to sit in front of the screen all day and I can do other things like property development projects, walking the local coast path (Devon estuaries have been unbelievably beautiful this autumn) or gliding, all of which are more important than chasing money.
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There's a huge difference between a floor trader and a spreadbetter. A floor trader is paying pennies per trade in commission and can easily scalp 100 plus trades a day for zero spread. 100 trades a day spreadbetting the dow would cost you 500 plus points in spread.
I don't think it's impossible to make a lot of money from spreadbetting but you have to be a lot more skilled than the average floor trader to overcome the disadvantages. Also, we have heard the stories of those that have some success find it virtually impossible to continue trading with spreadbetting firms.
As for actual trading capital I don't think you need too much, once you have identified your edge and can exploit it day in day out without emotion. As an example I look to make at least $25,000 per year per ES contract traded. $10,000 is enough to trade one contact with a max dd of about 25%. Obviously less capital gives you a better roi but a bigger drawdown and more risk of ruin. You have to work out what you are comfortable with and remember nothing is certain.
By far the biggest expense is in the lost earnings whilst becoming proficient at trading. You could learn the basics in a one day seminar but a lifetime to overcome the emotion involved in a prolonged drawdown.
I don't think it's impossible to make a lot of money from spreadbetting but you have to be a lot more skilled than the average floor trader to overcome the disadvantages. Also, we have heard the stories of those that have some success find it virtually impossible to continue trading with spreadbetting firms.
As for actual trading capital I don't think you need too much, once you have identified your edge and can exploit it day in day out without emotion. As an example I look to make at least $25,000 per year per ES contract traded. $10,000 is enough to trade one contact with a max dd of about 25%. Obviously less capital gives you a better roi but a bigger drawdown and more risk of ruin. You have to work out what you are comfortable with and remember nothing is certain.
By far the biggest expense is in the lost earnings whilst becoming proficient at trading. You could learn the basics in a one day seminar but a lifetime to overcome the emotion involved in a prolonged drawdown.