Trading For A Living

[kevynt]

mm.. 'trading for a living..', conjures up all sorts of lovely thoughts/emotions. And you know the game of trading, it is a beautiful game. They reckon Chess is the ultimate mind game... they have no idea!

Trading challenges us in so many different ways.. more often than not highlighting our shortcomings, our lack of discipline, our propensity toward greed, fear and panic. At the end of a trading day we feel that we know ourselves that little bit more than we did from the day before.

But all that aside, how many of us have mastered the game to a level which enables us to extract enough profit to actually earn a living from it??

I posted a thread not so long ago, "fifty percenters" and interestingly got no response. So rather than have traders hang their hat on their trading record, would anyone out there care to comment on the profit levels that they think must be maintained to secure a living from trading.

Regards
Kevyn T

 

[Naz]

$500/day is a realistic target to go for.

Here's my reasoning.First of all you need a market that moves and we all know the best for that is the Nasdaq.Next you need the best direct access system there is and that is on the same market.

Remember this isnt a hoby at this stage its a business.If you aren't using and trading the best you are seriously going to damage your profit levels.

I'm a Nasdaq scalper by heart but if you trade 100 times a day at these low prices,i doubt you'll make a living.

IMHO,use 1000 share size and wait and watch like a lion at the watering hole.Dont jump on the animal on the other side but wait for the wounded animal to come and drink right infront of you and then get in for the kill.A 50c run with using NL2 and 1000 share size that's your $500 for the day.Pack up and go and enjoy life.

With a NL2 you can close the gap in the first 1/2 hour bank $500 and finish for the day.But have the best trading system you can get or you can just whistle in the wind.

Below is a gap play example on the open from last week.Anyone that trades the Nasdaq knows that these happen time and time again.

 

[mmillar]

Surely, how much you think you need to make from trading is just a lifestyle choice. If you live the life of a millionaire you will need a lot, the life of a peasant, a little.

I (and a few others I know) aim for 10-20 points per day. At £10 per point this works out at £100-200 per day, £500-£1000 per week, £2000-£4000 per month. For me, this is a comfortable living. With spreadbetting this is (in theory, anyway) tax free so works out at a respectable salary.

The problem is that if I start the month with a few bad days I may be 100-200 points down and then feel under psychological pressure because I'm '2 weeks behind' and have to catch up. That's when things go wrong and just reinforces to me that trading is purely about psychology.

Cheers

 

[FTSE Beater]

Hi kevynt

comment on the profit levels that they think must be maintained to secure a living from trading.

For me it is only £400 a month. Mainly because I live at home, and for at least the next year, trading is my life.

As mmiller says it is all relative to your personal circumstance

HTH

 

[JonnyT]

$500 to $1000 dollars per day trading ES and/or NQ

Like Naz stated, there are techniques to trade the opening (i.e trading the first change of direction can normally yield 5+ points. If it goes against you immediatly close and go the opposite way. About 80% hit rate is achievable and you only spend an hour per day.

JonnyT

 

[Mr. Charts]

>kevynt
I trade for a living.
I can answer your question with details about average income expectations over a period of time as your experience grows etc, capital base needed, probable percentage returns and so on. These are based on the results of people I've trained and can be verified.
I am not "touting for coaching business" - you are in Australia anyway!
If you want to private email me, I'll provide you with the info.
I am not prepared to put it up here as last time I was repeatedly accused of boasting, sneered at and almost called a liar by one individual and I'm not prepared to read that sort of nonsense again.

 

[TraderPattern]

On most of my days I make no more than $1000 (i.e. anything from $300 to $1000). But I have a handful of days a month (on average about 5 such days) where I make several thousand dollars ($2000 to $10,000), which make up for the boring days... to get to my level is more a function of my long experience trading than trading capital maintained in my account... I don't need to keep my account funded very highly (relative to what I could easily fund it to) to achieve such numbers...

I don't have any time or inclination to mentor people (I like to keep my weekends to myself, and I am too busy making money during the week to justify giving live lessons)... but if you want insights into how I go about trading, I would recommend any interested folks look up Naz' course which is on the T2W homepage... he has made a conscious lifestyle choice to trade part-time and teach part-time... Naz and I have basically got the same style, trading off Nasdaq Level 2, which is much more reliable (for me) than using technicals...

 

[Skimbleshanks]

Perhaps we should turn the question around to how much you MUST make per day on average.

The UK national average salary is £19,400 pa, so assuming you do not work for bank holidays and 4 weeks holiday, and also assuming operating costs (data feed, software, Internet) of £1,000 pa, you would NEED to make £88 ($150) per day gross just to keep up with the national average.

An average worker in the software industry earns £35,300 pa, and assuming the same as above, that works out to be £160 ($252) per day gross.

As you can see from the above posts, it would seem that ideally you need to trade US markets to make that sort of money.

 

[ChartMan]

Not quite that simple Skim. I think Mr. Mooms does very well thank-you swing trading UK banks. Also, doesn't it depend on you "pot" size as to whether you can make £X per week? with a £50K pot, I would have thought £100 a week would be a stroll in the park. Or not?

 

[Skimbleshanks]

True, CM, but I was trying to approach the question from the other way - if you know what you have to make, you can work back to the size pot you need. Many people start with their pot and then expect it to produce the %age return, whereas knowing what you have to make per day can perhaps be enlightening and if your pot is therefore insufficient, you need to keep the day job going longer.

It's £100 per day, so not quite such a stroll in the park!

 

[raider1]

When I first started trading, I spent far too much time going round in circles with this subject. Things were not working out at all. I stopped after reading one of Tharp's books; I then started again.

I found that the answers came much clearer when I began to approach trading from the point of view of a proper "business", with it's plan, targets etc. But the biggest task was what initially appeared the simplest - deciding the OBJECTIVES. Only when this area was properly sorted was it possible for me to complete the rest of the jig-saw puzzle. From the objectives came the need for a system to meet the chosen objectives. The system then had to be devised, researched and tested.

With a few bumps along the way, I found that this approach enabled me to come up with a sensible method which was designed with my financial expectations in mind - and which therefore suited me and my trading style.

It has its own built-in safety check: If you can't devise a system which on paper produces the returns you are seeking - you sure as hell aren't going to achieve anything like it when you start to trade for real.

 

[Morris]

Skimbleshanks,
Who wants to be average ????

 

[Skimbleshanks]

Definitely not me, Mo!

 

[boy]

mr charts, how much do you charge for the tuition,where is the location and what type of trading style is it and in what market please?

 

[kevynt]

Trading for a living

Thanks for those responses.

It was interesting to note how many people looked upon trading profits as a dollar return within a daily timeframe. My own view is that trading profit is a reflection of the risk model you incorporate.

Risk models are best calculated over a longer time period to generate a more reliable/robust result.

My own trading profit projections are based on annual %ROI. I have sufficient faith in my risk model that providing I operate within those parameters, I know I will achieve my annual profit target. If I break those parameters, it is time to review my strategy/performance.

Profitable trading to all
Kevyn T

 

[julesrules]

i want to start living off trading. Ive been spread betting (loose definition of trading) for 6 months with ROI 18% which is pretty high although that only nets me £1.80. im a student so i dont have any money to put into the account. Once im trading full time i hope to have a weekly salary of £2500 (£500/day). spreadbetting is currently tax free so im looking forward to £100,000+ annually

 

[FTSE Beater]

Hi julesrules

I've read your other posts and a ROI of 18% is great.

My concern is that the chances of making £500 a day are minimal, unless your starting with £100,000+ to begin with. Alan Farley who is one of the best traders in the world only makes just over $100,000 a year.

The other thing is that spreadbetting is not tax free - if it's your main source of income. Spreadbetting companies say it's tax free, because to most people who trade as a side line it is, but as soon as it becomes your main source of income the government will want tax.

Another thing to consider is that if you are trading for a living, you will need to take money out of the account every month just to cover living expenses, which does dig into your account, especially if you are having a bad run, which all traders have from time to time

Sorry to seem so negative, but that's the reality of trading for a living.

 

[julesrules]

your reply speaks a lot of truth, however i want to build up to the figures i mentioned. im pretty proud of 18% but i know a few people pretty well who are making more than that. for £100k p.a. what level of tax approx. will i get charged. ive heard 40% surely it cant be that can it?
as im currently only 17, i have time on my hands so i can build up to 100k p.a.

 

[Mr. Charts]

"Alan Farley who is one of the best traders in the world only makes just over $100,000 a year."

IF he is one of the best and only makes 100k trading full time then his capital base must be relatively small. In fact so small he can't have enough to have a Pattern Day Trader.
Seriously.

 

[JonnyT]

I think $1,000,000 is nearer the mark?

JonnyT