Account Size- Important for trading

I'm creating a new slogan

99% lose, they just lose!!!

I think 90% makes them think they actually have a chance.

2011: One fantastic long stock trade....best ever, actually. However, I was holding the stock for years....just exited correctly.

I don't think this makes me a good "trader", just "investor" that made good money. It's like getting lucky with mutual funds and holding for a long time and selling at the right time.

it takes skill...actually, i don't care, it was good money.

so take your 10 or 20k and bet it all on one stock

i think your odds will go up
 
Higher education is not the answer. A lot of those super traders in the big banks are actually horrible traders when you take away their ability to constantly average down and better information they get by being in a bank. I'd be a pretty <del>fuckin</del> amazing trader too if I had $200 million to play around with and had information no one else has access too.
 
when it comes to forex and size, the only thing I'd be worried about is too big.

My broker will handle 5m as one trade, after that they split it up.

Supposedly Bill Gates made some good money on USD/CAD, but said, "It's too illiquid, the only big traders trade EUR/USD."

So unless you are moving more that 5 million per order, I wouldn't worry too much about size.
 
Quote from emg:

2uolw9k.jpg


http://articles.latimes.com/2011/apr/03/business/la-fi-amateur-currency-trading-20110403




It's not the question of emotion and leverage, but how the fx system is setup. If u want to become a successful trader, join the house after achieving HIGHER EDUCATION degrees.


Higher Education!!!




More than 90% of small traders lose. They just lose!
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no problem with the 90% that lose, it's those that do then bitch about it like you that get's a little old.

Why don't you get a decent education and a decent bankroll and try again? Since it's obvious you couldn't make it as a small independent trader.

However, I can probably save you some scratch. 100% of people who post like you will lose, you will just lose.

Might I also suggest you reevaulate your definition of "small trader", that old 90's less than 5k is getting a little old.

You ever read "Great Expectations"? You remind me of the old lady who never could get over the fact that she was stiffed.

If you even have a dining room table, you probably still have your last statement showing an account balance of zero sitiing there all crusty and old.

Now it's your job to prepare other young traders for the shattered expectations from which you are still trying to recover.
 
sheesh oldtime...arn't you being a little tough on the kid?

Es

Quote from oldtime:

no problem with the 90% that lose, it's those that do then bitch about it like you that get's a little old.

Why don't you get a decent education and a decent bankroll and try again? Since it's obvious you couldn't make it as a small independent trader.

However, I can probably save you some scratch. 100% of people who post like you will lose, you will just lose.

Might I also suggest you reevaulate your definition of "small trader", that old 90's less than 5k is getting a little old.

You ever read "Great Expectations"? You remind me of the old lady who never could get over the fact that she was stiffed.

If you even have a dining room table, you probably still have your last statement showing an account balance of zero sitiing there all crusty and old.

Now it's your job to prepare other young traders for the shattered expectations from which you are still trying to recover.
More...
 
Quote from ElectricSavant:

sheesh oldtime...arn't you being a little tough on the kid?

Es
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we're all too small, that's nothing to worry about

on the list of things to worry about it is way down on the list

if you fail at forex, it was not because you were under capitalized

that's why when anyone talks about trading futures, I always suggest they try spot forex first

because (and I have no proof of this, it's just my uneducated guess) the number one reason for beginner failure is undercapitalization

and in forex there is absoulutely no reason for it since you can set your own sizes, unlike futures where the minimum is $125K at a time.
 
from mpov, trading isn't about account size, or education, it's about the trading system

a retail trader new or experienced, should first test their system by demo trading
then, and fx is good for this, test trade the system with a small $ amount account
if the system works, the individual can then increase the account $ amount
 
Quote from emg:

It is the system that makes u (small trader) believe that u are losing because of emotion and over trading, while the fact is, they system is built for only big traders and institution.


Now burn your accounts small traders



BURN
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Good post. This is reality of forex -You need to be happy and satisfied with the value per pip which you are trading, and that value per pip needs to be at a sensible level compared to your account size for you to be successful.

I know not all can afford this, therefore be cautious in any smaller accounts and know you're skating on some thin ice; just be aware of that reality.
:D
 
Here is an interesting quote from ET member



Quote from steve.k.tang:

For the people who want a serious trading job here's my advice. You need solid programming skills, preferrably in C, Python or VB and strong excel skills. A passion for trading and programming skills will get u a job as a developer on the trading desk. This will help open your mind to trading ideas as well as properly test your strategies. Its hard to backtest using daily data when you want to trade intraday. Are trades stopped out before they become profitable? So do I have to trade intraday? You'll notice that many smaller firms don't have the risk limits to allow you to hold overnight. Hope that helps :)
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http://www.elitetrader.com/vb/reply.php?s=&action=newreply&postid=3481917





Higher Education is the key to become a successful trader!


Higher Education!




29m0odz.jpg



http://www.highereducation.org/reports/expectations/expectations5.shtml


2hnovsz.jpg




Too many anti higher education in this very site including moderators. More proofs are coming on why Higher Education is so important


Higher Education!
 
Account size is critical if you are a sole trader. You have to make enough P&L to cover your annual living expenses, after paying taxes and business expenses, just to breakeven on the year. And you have to do this every single year, or you are losing money.

Now factor in drawdowns. A 10% drawdown for a fund is not a huge deal. For a trader, their annual living expenses might be 10% of their trading account (e.g. 50k per annum for a trader with a 500k account - hardly living high). So they drop 10% per annum just to survive. Now imagine instead they have a 10% drawdown. Add on the yearly nut and that's a 20% drawdown.

An institutional trader who makes 20% a year is a hero. A sole trader who makes 20% on a 300k account might actually end up poorer at the end of the year than he started. A 10% drawdown at a fund, is more like a 20% drawdown for a sole trader. Basically, the overhead to living as a sole trader massively puts the odds against you until your account reaches a certain size (e.g. 1-3 million, depending on your local living costs).

There is therefore a certain 'hurdle' which you have to reach in order to stand a realistic chance as a sole trader. The idea that you can make it with 50k or even 100k is just a joke, if you are relying on return on capital type trading. The only way to break out as solo trader with 100k or less is to find some kind of 'income'-like returns e.g. daytrading/scaling, HFT etc, where your returns are not determined by how much capital you have, and where you don't really have to take lots of risk to make money. Nowadays with algos this is more tricky.

Ways to put things in your favour:

i) keep expenses low
ii) be a very good trader
iii) work your ass off
iv) keep drawdowns moderate
v) have some form of passive or outside income to cover your nut
vi) have a larger account
 
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