... is actually not that hard to achieve. Apprentice as a plumber, total cost maybe $20k, then you bill $50 an hour.
500k with 50% return
- Thread starter LuckyPimp
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1% a day ROI is actually not that hard to achieve, I meant to say.
Going to law school works, too, at least here in Canada where tuition is cheap. 200k for the degree, then you bill $2000 a day easy.
BTW, USDJPY is way overpriced, if you have 500k you can short $5 mil at 117.02 as I write this and it will be at 116.50 when you wake up. That's a prediction. At $500 a pip that's $24,000. One thing I've learned: you don't have to be in the market all the time. You learn your product, then you pick your spots.
Course if it hits my stop at 117.10 I'll be out $5,000 taking spread and commission into account, but I like the odds. Not that I have 500k, except in my paper trader; but I'll let you know how I make out.
Going to law school works, too, at least here in Canada where tuition is cheap. 200k for the degree, then you bill $2000 a day easy.
BTW, USDJPY is way overpriced, if you have 500k you can short $5 mil at 117.02 as I write this and it will be at 116.50 when you wake up. That's a prediction. At $500 a pip that's $24,000. One thing I've learned: you don't have to be in the market all the time. You learn your product, then you pick your spots.
Course if it hits my stop at 117.10 I'll be out $5,000 taking spread and commission into account, but I like the odds. Not that I have 500k, except in my paper trader; but I'll let you know how I make out.
All big traders/investors have a difficult time putting so much money to work. They simply cannot take advantage of the small opportunities that pop up fairly regularly in the market.
Plus, all funds, hedge etc..have a lot of overhead to factor in to their return. Office space, phones, secretary, analyst, traders, accounting, legal etc etc...people that have to be paid a salary.
A home based trader with $500K has maybe $250/month overhead from cable, news feed, etc etc...
SteveD
Plus, all funds, hedge etc..have a lot of overhead to factor in to their return. Office space, phones, secretary, analyst, traders, accounting, legal etc etc...people that have to be paid a salary.
A home based trader with $500K has maybe $250/month overhead from cable, news feed, etc etc...
SteveD
The point I was making was that the usual way of making money is to learn a skill and then get people to pay you to use it, and doing that, 1% a day is not exceptional. If you can invest $100,000 into gaining qualifications, say as a CA, and then bill $1000 a day doing it, that's 1% a day. For a plumber, the investment is a lot less and the ROI is phenomenal. The reason everybody isn't rich isn't that they can't make money, but that they spend it.
Now investors expect to be able to put money into a mutual fund and cop 10% or 20% a year without doing a lick of work. It stands to reason that if you turn making money into a full-time occupation, and hone your skills, you should be able to do much better - at least as well as a plumber.
I'll second what SteveD says: fund managers do better than
that too, but they also spend it. And as Steve says, a fund manager is driving a Mack truck, he can't turn things around so fast. He has also has a lot of balls in the air because he has to report to people, deal with paperwork, field phone calls, handle staff, etc. etc.: he can't just focus on trading.
On the other hand, a small investor, specializing in a handful of securities that he understands inside out, is driving a Ferrari. He can get in and out on a dime with his little blocks of shares. If he knows what he's doing, he can make a mint, it just doesn't scale up that well.
Mind you, he can also take the corners too fast and crash and burn. Why do most traders fail? Because you are taking people who have never learned to drive and putting them behind the wheel of that Ferrari, tempting them to go 200mph by giving them leverage, putting them out on a track full of potholes that they don't know, and at the same time scaring the bejeesus out them by telling them how dangerous it is (instead of teaching them to drive). So naturally they crash and burn. So did I, until I finally figured out what I was doing, $150,000 later. I consider it the cost of a professional education, and not all that expensive when you consider the upside potential.
Personally, I've given up on stocks and options and now trade forex exclusively. It has a lot of advantages: for one thing, a major currency isn't going to do an Enron on you. You can go long or short, same risk. You can leverage insanely if you want, and Big Brother doesn't tell you how much you have to have in your account. A downside is that you don't get to knock off at 4.
To make 1% trading forex, you leverage at 10:1 and set a target 10 pips up. The average daily volatility in my favorite trading pair being 98 pips, if you have some clue as to where things are at 10 pips is a cinch.
I do ok with it. If only I hadn't blown 90% of my grubstake on learning the ropes, I could be making a bundle. As it is, it gets spent.
As to the USDJPY move: it didn't quite make it down to 116.50, but my trail triggered at 116.90 - 12 pips, $6000 on paper. That's 1.2%.
Now investors expect to be able to put money into a mutual fund and cop 10% or 20% a year without doing a lick of work. It stands to reason that if you turn making money into a full-time occupation, and hone your skills, you should be able to do much better - at least as well as a plumber.
I'll second what SteveD says: fund managers do better than
that too, but they also spend it. And as Steve says, a fund manager is driving a Mack truck, he can't turn things around so fast. He has also has a lot of balls in the air because he has to report to people, deal with paperwork, field phone calls, handle staff, etc. etc.: he can't just focus on trading.
On the other hand, a small investor, specializing in a handful of securities that he understands inside out, is driving a Ferrari. He can get in and out on a dime with his little blocks of shares. If he knows what he's doing, he can make a mint, it just doesn't scale up that well.
Mind you, he can also take the corners too fast and crash and burn. Why do most traders fail? Because you are taking people who have never learned to drive and putting them behind the wheel of that Ferrari, tempting them to go 200mph by giving them leverage, putting them out on a track full of potholes that they don't know, and at the same time scaring the bejeesus out them by telling them how dangerous it is (instead of teaching them to drive). So naturally they crash and burn. So did I, until I finally figured out what I was doing, $150,000 later. I consider it the cost of a professional education, and not all that expensive when you consider the upside potential.
Personally, I've given up on stocks and options and now trade forex exclusively. It has a lot of advantages: for one thing, a major currency isn't going to do an Enron on you. You can go long or short, same risk. You can leverage insanely if you want, and Big Brother doesn't tell you how much you have to have in your account. A downside is that you don't get to knock off at 4.
To make 1% trading forex, you leverage at 10:1 and set a target 10 pips up. The average daily volatility in my favorite trading pair being 98 pips, if you have some clue as to where things are at 10 pips is a cinch.
I do ok with it. If only I hadn't blown 90% of my grubstake on learning the ropes, I could be making a bundle. As it is, it gets spent.
As to the USDJPY move: it didn't quite make it down to 116.50, but my trail triggered at 116.90 - 12 pips, $6000 on paper. That's 1.2%.
Buy the following basket of stocks:
HGR
HTRN
GNBT
BTUI
TRC
See you in a few years..............
HGR
HTRN
GNBT
BTUI
TRC
See you in a few years..............
Quote from LuckyPimp:
If you had 500k to invest, what would be the best way to grow that consistently with a 50% compounding annual return over a 5 year period?
Also what is some good software for intraday back testing strategies to test the theory on?
I prefer to be in and out of the market. Buy and holding for years does not appeal to me.
I see alot of those "turn 1,000 into 1,000,000 in 30 days" posts and figure this would be a little more to work with.
Thanks for the advice.
50% return with 500k?
Open up a brothel - not in the states - the girls there are crap.
Im talking about Sydney or Wellington, New Zealand. Thats what I did in New Zealand. Im a CA but the money sucked working for the BIG 4 accounting firms. Wanted to get into trading Bund futures on the EUREX exchange back in the late 90's but its a steep learning curve and took 3 years to make money consistently. During that time teamed up with a guy and bought out a brothel owner that retired at 82. It returns $420K net even after renting out the house for $230K a year. The investment? time
Open up a brothel - not in the states - the girls there are crap.
Im talking about Sydney or Wellington, New Zealand. Thats what I did in New Zealand. Im a CA but the money sucked working for the BIG 4 accounting firms. Wanted to get into trading Bund futures on the EUREX exchange back in the late 90's but its a steep learning curve and took 3 years to make money consistently. During that time teamed up with a guy and bought out a brothel owner that retired at 82. It returns $420K net even after renting out the house for $230K a year. The investment? time
hey lp,
i didn't read the whole thing, but if what you're saying about ibb is true, then congrats.
i agree with whoever said that trading is a calling and i would add, a passion. although you're welcome to hang around and watch, you're probably better off being a lt investor and making your main money from your biz, since it seems you are quite successful at it. if you just have to try your hand at trading, i would say go slow and play with only a little bit of your money, maybe 5 or 10k at first. if it clicks and your performance is consistently good, you could try trading larger amounts, but i would really go slow with it. like i said, it's a calling, and to do it well, you should really have a passion for it.
options and futures are a good way to make a lot of money out of very little, but these are even harder to trade successfully than equities, which are already hard enough to make consistent high gains on. very easy to lose your shirt.
if i were you, i'd risk no more than 5% of the money on trades. the rest i'd invest in high quality stocks like those listed in investor's business daily. even then i'd go slowly and maybe diversify with a few etf's.
i hope this helps. good luck!
okay, there's my 2cents.
i didn't read the whole thing, but if what you're saying about ibb is true, then congrats.
i agree with whoever said that trading is a calling and i would add, a passion. although you're welcome to hang around and watch, you're probably better off being a lt investor and making your main money from your biz, since it seems you are quite successful at it. if you just have to try your hand at trading, i would say go slow and play with only a little bit of your money, maybe 5 or 10k at first. if it clicks and your performance is consistently good, you could try trading larger amounts, but i would really go slow with it. like i said, it's a calling, and to do it well, you should really have a passion for it.
options and futures are a good way to make a lot of money out of very little, but these are even harder to trade successfully than equities, which are already hard enough to make consistent high gains on. very easy to lose your shirt.
if i were you, i'd risk no more than 5% of the money on trades. the rest i'd invest in high quality stocks like those listed in investor's business daily. even then i'd go slowly and maybe diversify with a few etf's.
i hope this helps. good luck!
okay, there's my 2cents.
btw, I've tried stocks, I've tried options, and I've settled on forex as the only way to go. Advantages of forex: (1) a major currency isn't going to do an Enron on you, (2) you can go long or short, same risk, (3) you can leverage insanely (although you can make a nice living without going over 10:1 and I wouldn't recommend going much higher - still, if a good trend gets going you can step on the gas), (4) it's vastly more liquid than even the most popular stocks, (5) there's no insider trading (although it's also an unregulated market, so you have to be very careful who you go with. I use IB.). (6) the key decisions are made in the public forum not in closed boardrooms, they are discussed endlessly by whole armies of pundits, and all the fundamentals are in the public domain, (7) unlike stocks or options, currencies are driven by need as well as greed. You are, let's say, a Canadian oil company and you've just sold a billion dollars worth of oil to the US. You'd love to hang on to those dollars because the dollar is going up, but you have payrolls to meet and suppliers to pay, so you have to convert them. Just like you have to trade money at the airport, regardless of how outrageous the rates are. And if you are playing purely for greed, you can take advantage.
It's a tricky business, though, like all trading.
It's a tricky business, though, like all trading.