Well sure it's meaningless, if you want it to be. It's a thought exercise --- the point is to fill in the blanks yourself and see where you wind up. And maybe get some insight from the answers you came up with.
$100 million possible?
- Thread starter archimedes
- Start date
Well sure it's meaningless, if you want it to be. It's a thought exercise --- the point is to fill in the blanks yourself and see where you wind up. And maybe get some insight from the answers you came up with.
$100M! Not even think about it. Why would you need so much money? What you will do with those moneys? Do you agree with me if we reduce the amount to something smaller but we're still making sure to have a nice living with that. We will have to do in two steps, first remove one zero and second reduce the letter representation. In computer science, by convention a letter A < B and B < C and so on, then Z is the greatest letter and A is the smallest. With this convention we reduce the letter M to B, and remove one zero from 100 to 10. The final result will be something like $10B.
Are you satisfied with the reduced amount? Let me know, if you're not ok with it, we will try to reduce once more again.
Are you satisfied with the reduced amount? Let me know, if you're not ok with it, we will try to reduce once more again.
$100,000,000!!!!!!! What are you, NUTS?
Theres way more money in the market to be made than that!
Theres way more money in the market to be made than that!
I've done the math for those who are math inclinced, or those who just want the $100,000,000.
Here goes:
1. Assume that you are just starting out, but seem to be able to consistently get 0.2% every day. This is a very tall order.
Also assume that you're trading on margin. To do this, you'll need at least $25,000. You'll likely get wiped out with margin calls the first week, so it's good to start with comfort level, say $27,500.
With 250 trading days per year, your account should grow to $200,000 in the first year. This is the power of margin investing.
This is a return of 627% per year. This factor (that gets you from the conventional 250*0.2 = 125% to 627%) I have coined as the Bausch factor, which is humbly named after whom I believe to be the discoverer.
Bausch factor = 5.016
Enough egocentric comments for the moment.
So, dear elite traders, you initial question is:
Do you believe that $100,000,000 is possible?
The answer is: Only if you can endure another 4.13 years, and only is you can get 0.2% per day in your trading. (The 1% per day notion is nonsense, and does not look to the numbers.)
Of course, the elite trader must observe some rules.
1. You won't be able to draw down on you earnings. Any draw down will reduce the gain. You'll have to forgo that 250 foot yacht for a couple of years.
2. Make sure that your broker is capable of handling very large orders, because the idea aof trading 100,000 shares at a time can result in excessive commissions if your account does not support this kind of activity.
I'll give my status toward my $100,000,000 now. I started day trading in January, 03. I deposited $27,500 into my account. I lost $1000.00 in one month and found real work. Last week I got back into it. I gained $75 the first day, and then lost $700 the next. I'm getting close to a margin call. But it's still fun to do the math.
Good luck, elite traders. I have an ExCel spreadsheet for those who are more curious.
Newbie Sage
Here goes:
1. Assume that you are just starting out, but seem to be able to consistently get 0.2% every day. This is a very tall order.
Also assume that you're trading on margin. To do this, you'll need at least $25,000. You'll likely get wiped out with margin calls the first week, so it's good to start with comfort level, say $27,500.
With 250 trading days per year, your account should grow to $200,000 in the first year. This is the power of margin investing.
This is a return of 627% per year. This factor (that gets you from the conventional 250*0.2 = 125% to 627%) I have coined as the Bausch factor, which is humbly named after whom I believe to be the discoverer.
Bausch factor = 5.016
Enough egocentric comments for the moment.
So, dear elite traders, you initial question is:
Do you believe that $100,000,000 is possible?
The answer is: Only if you can endure another 4.13 years, and only is you can get 0.2% per day in your trading. (The 1% per day notion is nonsense, and does not look to the numbers.)
Of course, the elite trader must observe some rules.
1. You won't be able to draw down on you earnings. Any draw down will reduce the gain. You'll have to forgo that 250 foot yacht for a couple of years.
2. Make sure that your broker is capable of handling very large orders, because the idea aof trading 100,000 shares at a time can result in excessive commissions if your account does not support this kind of activity.
I'll give my status toward my $100,000,000 now. I started day trading in January, 03. I deposited $27,500 into my account. I lost $1000.00 in one month and found real work. Last week I got back into it. I gained $75 the first day, and then lost $700 the next. I'm getting close to a margin call. But it's still fun to do the math.
Good luck, elite traders. I have an ExCel spreadsheet for those who are more curious.
Newbie Sage
I agree. And to the hell with my conservative approach described above. Same set up, but let's use the same leverage adjusted at the end of every month.
So you start out with only 2K on your account and trade Dow futures and have to make only 10 points a day consistently (or ES futures and 1 point).
But at the end of each month you start to use for the new month as many contracts as you did when you started, meaning your account divided by 2000.
So at the end of the 2. month you are up to 4K thus you can use now 2 contracts. After 6 months you are up at 19K and using 9 contracts. After one year, you made 211K and trading 105 contracts, you will have a little slipage problem at this point, but you multiplied your account by 105 times!
It only takes a year and 3.5 month to reach 100 mill from here, thus in 27.5 month you made your goal of 100 mill starting from pretty much nothing, only $ 2000!!!
You can reach the sky, you just have to dream BIG!
I have a few doubts that someone could trade their way into $100MM in stocks or futures, but the fOREX is a completely different story.
In fact, I have worked up a spread sheet where with just a $1000 to start you can have $1 million in less than a year.
Your second year will get you the $100 million, actually it may
even reach a billion. AND the most incredible thing is that you are doing this with the market's money or rather money you have earned in the market.
I personally have spoken to one gentleman who traded a $50K demo account up to $1.1 million in just 3 hours. Later he then traded that $1.1 million up to $2.5 billion. Now demo account trading is different than live trading but the basic principals are the same but without some of the real world gremlins to hold you back. To go from $1.1 million to $2.5 billion is only 30 trades if you do it right!
Of course, there are milestones along the way where you will need to change your trading method and brokers, but here is how it can be done.
First, have a reliable trading system that can get you a net 100+ pips per week including all drawdowns. I currently have been averaging 200 pips per week and on active days I may see a 500 pip day. I attribute this to the unique trading system I use which is based on price action and not the typical indicators.
Second, trade with a broker who offers a mini account to start with 200:1 leverage. Also, this broker's trade station must be able to execute hedge trades. Watch out for this as this is a
key point to my strategy.
By hedging I don't have any negative trades unless the market moves too far away from a trade where I need to use the margin in a current trade. Then I may close out at a loss for a limited number of pips and only for a small percentage of my account. Otherwise, I work the hedge trades as my account builds.
Third, when your mini account gets to the point of needing to be converted to a standard account, don't. Use it as your "cash cow" and open a second standard account. You can easily withdraw $10K+ a week from the mini account and use the rest of the cash earned in the mini to build your standard account, which will be also be building but at the lower 100:1 leverage.
Fourth, as your account grows you add lots to successive trades which builds your account exponentially. If you are hedging as well it will go even faster, but you have to be careful of your margin. If you don't you will get margined out and have to start over. I learned this the hard way, but it was worth it.
Fifth, there will come a time when you will need to find a bank to trade with directly. Most retail brokers are charging 2-4 pips per trade. Once you account is at the $500K mark you will be trading
10 x 100 x 100 = 100,000 per week or 20% of your account. By hedging you will be able to have 20% of your account in the market with very low risk. Now when you are trading 100 lots that is $10 million. The banks active in the Forex will trade with you at wholesale rates when you are making trades of this size.
You should not wait until you have the $500K in you account to start making contacts for the wholesale trades. You have several months in advance to figure this out and establish your network to do this.
The important thing is to have a plan in place, even though it may not be detailed much more than this post to be your guide to your $100 million. There is nothing quite as powerful as a definite plan that you have set out to accomplish to make it happen.
So I close with what I said in the beginning, "Yes it is possible to earn $100 million trading the (Forex) market." In fact, you should be able to do this in less than 24 months of trading. In the Forex you will not see the slippage and liquidity problems you have in stocks or futures when you are looking to move larger contracts. The Forex currently trades about $1.8 trillion per day so they won't miss a $Billion when you get there. Just in case you were wondering a $Billion is 0.0001% of a $Trillion and you don't need to take it all out in one day. Be nice and spread it out over a week or so.
In fact, I have worked up a spread sheet where with just a $1000 to start you can have $1 million in less than a year.
Your second year will get you the $100 million, actually it may
even reach a billion. AND the most incredible thing is that you are doing this with the market's money or rather money you have earned in the market.
I personally have spoken to one gentleman who traded a $50K demo account up to $1.1 million in just 3 hours. Later he then traded that $1.1 million up to $2.5 billion. Now demo account trading is different than live trading but the basic principals are the same but without some of the real world gremlins to hold you back. To go from $1.1 million to $2.5 billion is only 30 trades if you do it right!
Of course, there are milestones along the way where you will need to change your trading method and brokers, but here is how it can be done.
First, have a reliable trading system that can get you a net 100+ pips per week including all drawdowns. I currently have been averaging 200 pips per week and on active days I may see a 500 pip day. I attribute this to the unique trading system I use which is based on price action and not the typical indicators.
Second, trade with a broker who offers a mini account to start with 200:1 leverage. Also, this broker's trade station must be able to execute hedge trades. Watch out for this as this is a
key point to my strategy.
By hedging I don't have any negative trades unless the market moves too far away from a trade where I need to use the margin in a current trade. Then I may close out at a loss for a limited number of pips and only for a small percentage of my account. Otherwise, I work the hedge trades as my account builds.
Third, when your mini account gets to the point of needing to be converted to a standard account, don't. Use it as your "cash cow" and open a second standard account. You can easily withdraw $10K+ a week from the mini account and use the rest of the cash earned in the mini to build your standard account, which will be also be building but at the lower 100:1 leverage.
Fourth, as your account grows you add lots to successive trades which builds your account exponentially. If you are hedging as well it will go even faster, but you have to be careful of your margin. If you don't you will get margined out and have to start over. I learned this the hard way, but it was worth it.
Fifth, there will come a time when you will need to find a bank to trade with directly. Most retail brokers are charging 2-4 pips per trade. Once you account is at the $500K mark you will be trading
10 x 100 x 100 = 100,000 per week or 20% of your account. By hedging you will be able to have 20% of your account in the market with very low risk. Now when you are trading 100 lots that is $10 million. The banks active in the Forex will trade with you at wholesale rates when you are making trades of this size.
You should not wait until you have the $500K in you account to start making contacts for the wholesale trades. You have several months in advance to figure this out and establish your network to do this.
The important thing is to have a plan in place, even though it may not be detailed much more than this post to be your guide to your $100 million. There is nothing quite as powerful as a definite plan that you have set out to accomplish to make it happen.
So I close with what I said in the beginning, "Yes it is possible to earn $100 million trading the (Forex) market." In fact, you should be able to do this in less than 24 months of trading. In the Forex you will not see the slippage and liquidity problems you have in stocks or futures when you are looking to move larger contracts. The Forex currently trades about $1.8 trillion per day so they won't miss a $Billion when you get there. Just in case you were wondering a $Billion is 0.0001% of a $Trillion and you don't need to take it all out in one day. Be nice and spread it out over a week or so.
I like to dabble in FX but, sadly, I really do agree with you. For some reason FX simply doesnt seem to attract intelligent crowds. At a very popular FX site there are several threads on astrology and FX market timing. I mean come on, I though we got out of the Middle Ages a few centuries back. 
It's possible.
But there are easier ways to get there than through building your own account. The fastest way to achieve it would be as follows.
Let's say you a lucky enough to get a job at a trading desk with a couple of really excellent traders. They teach you well.
You put 10k trading account and over a year or two you build it up to 100 - 200K. This is not that difficult, I have several freinds that have got to this stage through blind luck alone.
When you've got your trading to a level you feel really confident with, you quit your day job and join a prop firm.
With your 200k, you start trading your own account on a 40 / 60 splilt - 60% to you the trader.
The prop firm allows you to trade up to 200 - 300 contracts intra day.
Over the next few years you do very well with returns of around 200%pa. After three years you've got about 5 mil in your account and everyone is talking about you as the latest hotshot trading freak. Andy Pristine style.
All of a sudden, you've got several large financial institutions approaching you with an offer to set up a smallish hedge fund of which you'll be head trader.
They give you 50 million to trade with and say if you can achieve 25% P.A, they'll give you another 100 mill.
You get 20% of the funds profit.
Over the next three years you return 35%. In that time they've given you another 100 million each year.
We're now 8 years in and managing close to 500 million. Your returns are slipping back into the 20% P.A range but you're still pulling about 20 million a year in fees.
On top of that, the 5 million you started with when you began managing money is now worth close 20 million also.
You're suddenly worth close 50 million.
You have another couple of solid years and a decade later, you've hit the 100 million mark.
There are plenty of traders who have done exactly this. It's entirely possible.
It's very difficult to do, but far from impossible.
Runningbear
But there are easier ways to get there than through building your own account. The fastest way to achieve it would be as follows.
Let's say you a lucky enough to get a job at a trading desk with a couple of really excellent traders. They teach you well.
You put 10k trading account and over a year or two you build it up to 100 - 200K. This is not that difficult, I have several freinds that have got to this stage through blind luck alone.
When you've got your trading to a level you feel really confident with, you quit your day job and join a prop firm.
With your 200k, you start trading your own account on a 40 / 60 splilt - 60% to you the trader.
The prop firm allows you to trade up to 200 - 300 contracts intra day.
Over the next few years you do very well with returns of around 200%pa. After three years you've got about 5 mil in your account and everyone is talking about you as the latest hotshot trading freak. Andy Pristine style.
All of a sudden, you've got several large financial institutions approaching you with an offer to set up a smallish hedge fund of which you'll be head trader.
They give you 50 million to trade with and say if you can achieve 25% P.A, they'll give you another 100 mill.
You get 20% of the funds profit.
Over the next three years you return 35%. In that time they've given you another 100 million each year.
We're now 8 years in and managing close to 500 million. Your returns are slipping back into the 20% P.A range but you're still pulling about 20 million a year in fees.
On top of that, the 5 million you started with when you began managing money is now worth close 20 million also.
You're suddenly worth close 50 million.
You have another couple of solid years and a decade later, you've hit the 100 million mark.
There are plenty of traders who have done exactly this. It's entirely possible.
It's very difficult to do, but far from impossible.
Runningbear