3K monthly income on a 100K account

[Dolemite]

Substitute trading from home with any of the below:
1) being a successful quarterback in the NFL
2) being a successful neurosurgeon
3) being a successful politician

Bottomline: If you don't have the TALENT for what you want to do, IT DOESN'T MATTER....you won't make much money doing it.
I've met so many talentless traders.

Operating a sandwich franchise : a monkey could do it. You can do it and make money, but compare to anyone with talent for the above, it will be a fraction of their income.

Successful and politician is probably an oxymoron.
Take the word "income" out of the equation and a fixed monthly win goal. Just concentrate on keeping your losses down and let the profits work themselves out. I find that people expecting 3% a month aren't thinking about the probability of losing 10% a month to get to that.

 

[tom_czr]

3% (3K/100K) per month is 36% per year. More than what even the top hedgefunds make.

And if you do short vol, you sure as hell won't capture 3% "per month". More like 3% averaged over 1000000 samples with occasional drawdowns in the 30-40 % range...your equity curve will never be a straight upwards line.

??? As trader we should be able to do math properly.
3% per month is NOT 36% per year. Cumulatively it is 42.576% p.a.
With small capital like 100K it is definitely feasible with DDs under 15% - my experience ;-)

The reason why top hedge funds are not able to do more % p.a. is because liquidity issues - lot of strategies are not usable with large capitale due to slippage in fills. Lets try place MKT order of 10,000shr on some stock with daily volume 120,000 shares ;-) ...same with options.

 

[newwurldmn]

Substitute trading from home with any of the below:
1) being a successful quarterback in the NFL
2) being a successful neurosurgeon
3) being a successful politician

Bottomline: If you don't have the TALENT for what you want to do, IT DOESN'T MATTER....you won't make much money doing it.
I've met so many talentless traders.

Operating a sandwich franchise : a monkey could do it. You can do it and make money, but compare to anyone with talent for the above, it will be a fraction of their income.

Any entrepreneurship endeavor (not your examples which are skilled jobs) requires starting capital and some form of leverage to succeed. Even a good trader has trouble securing both without starting a fund to trade OPM.

 

[aibanez]

Any entrepreneurship endeavor (not your examples which are skilled jobs) requires starting capital and some form of leverage to succeed. Even a good trader has trouble securing both without starting a fund to trade OPM.

Leverage -in my point of view- is crucial, any startup has leverage in some way and we as traders are not be exempt from this, specially if the trading capital is small - like mine.
In my own experience, my first year of trading my approach was very conservative and with ZERO usage of leverage on margin, once I started to use that and using more aggresive trades my results were improved substantially (from 5% to 10% the following year), this only reinforces that the greatest successes have been achieved thru assuming great risk -in general-

I also think that there are superstars in every profession, whether in music, sports, finance, etc. This does not mean that only superstars can make a good life of their profession. I love trading and I love to be an individual trader, the stress and the risks that are inherent to our profession are by FAR compensated with various "intangible" benefits, some are:
1. Not to deal with employees.
2. Not to deal with suppliers
3. Not to deal with warehouses, inventories, transportation, etc
4. Can work from anywhere.
5. Be your own boss, etc, etc, etc.
In one word FREEDOM!
Cheers

 

[newwurldmn]

Leverage -in my point of view- is crucial, any startup has leverage in some way and we as traders are not be exempt from this, specially if the trading capital is small - like mine.
In my own experience, my first year of trading my approach was very conservative and with ZERO usage of leverage on margin, once I started to use that and using more aggresive trades my results were improved substantially (from 5% to 10% the following year), this only reinforces that the greatest successes have been achieved thru assuming great risk -in general-

I also think that there are superstars in every profession, whether in music, sports, finance, etc. This does not mean that only superstars can make a good life of their profession. I love trading and I love to be an individual trader, the stress and the risks that are inherent to our profession are by FAR compensated with various "intangible" benefits, some are:
1. Not to deal with employees.
2. Not to deal with suppliers
3. Not to deal with warehouses, inventories, transportation, etc
4. Can work from anywhere.
5. Be your own boss, etc, etc, etc.
In one word FREEDOM!
Cheers

It's operating leverage that's key.
Same 100k investment in a business can make you 10k/year or 100k/year based on the throughput you can do.

Traders don't get this benefit. They primarily rely on financial leverage for growth.

 

[actionzip54]

Substitute trading from home with any of the below:
1) being a successful quarterback in the NFL
2) being a successful neurosurgeon
3) being a successful politician

Bottomline: If you don't have the TALENT for what you want to do, IT DOESN'T MATTER....you won't make much money doing it.
I've met so many talentless traders.

Operating a sandwich franchise : a monkey could do it. You can do it and make money, but compare to anyone with talent for the above, it will be a fraction of their income.

Lol, because sandwich franchises don't fail. Also, it takes talent to be a politician? You smokin dat crack?

Those no guaranty of safety in any job/ profession. Only fools think otherwise.

 

[TskTsk]

??? As trader we should be able to do math properly.
3% per month is NOT 36% per year. Cumulatively it is 42.576% p.a.
With small capital like 100K it is definitely feasible with DDs under 15% - my experience ;-)

The reason why top hedge funds are not able to do more % p.a. is because liquidity issues - lot of strategies are not usable with large capitale due to slippage in fills. Lets try place MKT order of 10,000shr on some stock with daily volume 120,000 shares ;-) ...same with options.

Well, he said he wanted monthly income, not growth. Besides, my point is that these figures are meaningless, because your equity line with his suggested strategy (short vol) will never be so straight that you have "3% per month", or "0.1% per day" or "= 0.0042%" per hour or however you want to put it. Average, maybe, but aiming for exactly 3% per month is pointless.

As for hedgefunds...not every hedgefund is in the billions. Even those in the millions struggle to return above SPY.

 

[tom_czr]

As for hedgefunds...not every hedgefund is in the billions. Even those in the millions struggle to return above SPY.

Lol, yeah, because they are noobs... Thank god there is lot of guys giving money to us so we can make returns higher than SPY

BTW I do not know any succesful trader who is counting money monthly. Most of guys I know plan their expenses and withdrawals of money once per year. Maybe I am in strange group of traders, who knows...

 

[TskTsk]

Lol, yeah, because they are noobs... Thank god there is lot of guys giving money to us so we can make returns higher than SPY

Hedgefunds are noobs? ...oh, I forgot I was on elitetrader for a second, where everyone and his dog easily returns 300% or more per year. They should make an Elite Trader ETF that invests every call of the Elite Traders to the market, I'm sure it would be very successful.

BTW I do not know any succesful trader who is counting money monthly. Most of guys I know plan their expenses and withdrawals of money once per year. Maybe I am in strange group of traders, who knows...

Well, that was my point; that OPs "3% per month" is too short for a return goal. OP needs to look beyond months and to years instead.

 

[tiddlywinks]

...
BTW I do not know any succesful trader who is counting money monthly. Most of guys I know plan their expenses and withdrawals of money once per year. Maybe I am in strange group of traders, who knows...

Several years ago my withdraws were quarterly, not annually. It's great for account growth (assuming a profitable trader). Unfortunately the world changed since then (Refco, MF, PFG, etc). As such, FCM diversification and excess account balances became factors not to be taken for granted, for an overall business plan. Now my withdraws are weekly or even daily. I'd move to monthly, but imo there is just too much regulation confusion and possible consolidation in the pipeline at this time. NB: business plan and trading plan are separate.

I know the OP is talking about options. Different perspectives, in this case from a futures trading perspective, can sometimes induce the thought process.