Advice on how I should Raise Trading Capital?

[Laissez Faire]

I had a dream my life would be
So different from this hell I'm living
So different now from what it seemed
Now life has killed the dream, I dreamed

From Les Misérables.

Good morning, zghorner,

Seems like you already received some good replies and made a decision already, but I wanted to make this post anyway. It's a beautiful Saturday afternoon here in Norway, but I'm working my regular 6 day-per-week at my day job.

My basic hours in my day job is 40 hours per week, but often there is demand for some extra hours, so 50 hours isn't uncommon. Earlier this year I was working 65 hour weeks just on my day job.

Because of the time zone differences I'm able to day trade the US session while holding a day job. Often, since trading is taking up a bit of time in the weekdays I usually have to put in work on a Saturday to compensate for slack during the week.

Sunday is my day off, but usually I'm working on my trading then and making some preparations for the week to come. So, it's a pretty demanding schedule and I can tell you for sure that I don't want a day job either, but sadly that's the choice I'm left with at the moment.

I've been full-time a few times and it never ended with success, but it was a great learning experience since I had so much more time on my hands both for trading, learning and doing research. With my current schedule I'm not able to make much progress on the learning part, but thanks to prior efforts I have a system/method which seems to be working for me and I'm just left with the manual execution of that.

I have no illusions about trading full-time again until my trading account is fat from profits I actually earned in the market. And even then, I think I will start by reducing my hours to say 50 %. And I will probably only quit when the income from my day job is marginal compared to my trading income.

I'm writing this to give you a bit of perspective.

Taking out a loan

Taking out a loan is a really, really bad idea because I can tell there's a very high chance you're going to lose that as well and that takes your situation from bad (?) to terrible.

Taking out a loan for trading only makes sense if you're a veteran trader who got wiped out from no fault of your own (black swan event, technology failure, etc.). Or maybe if you're so well financially off that you know you can easily pay it back quickly or maybe you have a payout in the future from something else.

Taking out a loan also makes me think you want to take a short-cut and that's a sure way to lose in this business.

You will never make a dime in this business unless you put in the time.

Seems like you discovered futures not that long ago?

Even if someone mentored you, you still need to rack up experience doing this on your own. There's no substitute for experience and that simply takes time to acquire.

My view is that even 5 years after discovering futures or trading you're still pretty much a newbie. Maybe an advanced newbie. 5 years in this business as a retail amateur on his own trying to figure this out ain't that much. That's the hard truth. Realistically, 10 years to just have a fighting chance would be a good approximation for most people.

The losses you took doing this SUCK. But they're a sunk cost. Search up sunk cost to understand it better, but basically, the idea is that those losses are history and should in no way influence your path moving forward. Hell, if anything maybe it should be a warning to not pursue this path any further.

I don't know how much I've donated to the market myself, but money lost and money invested in programming services/research I'm sure must be $100K. So I can understand the frustration. However, trading and the markets doesn't work that way. We can't use our donations or efforts or failures to justify or feel entitled to success.

The market is only a facility. It's completely neutral. Anyone who loses money in the market does so by his own choice. This is extremely important to understand. The market f'cks nobody. It's we who f'ck ourselves by playing a game we don't understand sufficiently.

If you want to succeed in trading (any maybe this is true for life in general), you need to be brutally honest with yourself.

I would take some time to consider what path you take moving forward. You mentioned having a business, so maybe just focus on that instead or maybe try building another one? And in addition maybe swing trade on the side instead of day trading?

I think day trading futures must be one of the hardest way in life to make money. For the select few it's very lucrative, but that's for the few. Not the many.

Best of luck.

 

[Handle123]

Most will disagree, but eventually I forward tested, paper traded a system back in the '90s, I tripled it three times. Then I knew I had an edge. Keeping good stats is huge. I don't believe in starting large, too easy to get sloppy. Be patient. Skip ES. Nasdaq, Russell and Crude give you most back for your buck, when you eventually want to do size, then ES

 

[earth_imperator]

I will add to my last post that I have also experienced Supreme happiness while trading...it hasn't all been bad, my old style of Trading produced some crazy home runs like trippling my account in days...but it is not sustainable obviously...my position sizing and capital preservation skills were below ass. Big gains, big losses betting 10% of my account on single trades at times lol...then trying to "trend trade" options using equity based rules like a true genius lol...then spreads were just as bad to me because I was a complete sucker. It's embarrassing but the truth and all I can do about it is move on.

I think you should study options spreads throughly. Spreads are IMO the best trading vehicles as you can in advance limit your possible loss, unlike with stop loss or trailing loss orders which are not guaranteed, as everybody knows.

Another advantage: you just keep the position some weeks or months. Ie. no constant trading required.
Of course to be on the safe side, one should have about 20 or 25 positions open (diversification, ie. risking max 5% of account with each pos).

I'm currently trying to apply the above plan. Using only 2-leg option spreads (ShortPut + LongPut, can be configured as bullish or bearish (depends on whether LP.K < SP.K or LP.K > SP.K).

My financial situation is similar to yours, but I decided against taking a loan; instead I'll do it with own money, how small it even might be, b/c if the strategy is good then it should help to grow the account, even if it takes some longer. But even that can be optimized by trying to increase the monthly profit rate by finding more lucrative spreads...

In your case: you should optimize the said 5.3% per month. If you can bring it to about 14% then
you could reach $150k in just 2 years:

sim_acct_perf(sc=6700.00, pos_size=5.00, f_pos_size_is_pct=1, PLpct_per_DT=0.6500, TD_per_month=20, add_sub_amt_per_month=0.00, months=24):
TD/mo=20 PL%/TD=PL%/DT=0.650000 gross_PL%/mo=13.834940(Ann=373.485860% DF=4.754665)
month          sc               ec               pl_tm  pl%_tm           pl_tot    pl%_tot      DF
  1          6700.00          7626.94           926.94   13.83           926.94      13.83    0.19
  2          7626.94          8682.12          1055.18   13.83          1982.12      29.58    0.37
  3          8682.12          9883.29          1201.17   13.83          3183.29      47.51    0.56
  4          9883.29         11250.64          1367.35   13.83          4550.64      67.92    0.75
  5         11250.64         12807.16          1556.52   13.83          6107.16      91.15    0.93
  6         12807.16         14579.02          1771.86   13.83          7879.02     117.60    1.12
  7         14579.02         16596.02          2017.00   13.83          9896.02     147.70    1.31
  8         16596.02         18892.07          2296.05   13.83         12192.07     181.97    1.50
  9         18892.07         21505.77          2613.71   13.83         14805.77     220.98    1.68
 10         21505.77         24481.08          2975.31   13.83         17781.08     265.39    1.87
 11         24481.08         27868.03          3386.94   13.83         21168.03     315.94    2.06
 12         27868.03         31723.55          3855.53   13.83         25023.55     373.49    2.24
 13         31723.55         36112.49          4388.93   13.83         29412.49     438.99    2.43
 14         36112.49         41108.63          4996.14   13.83         34408.63     513.56    2.62
 15         41108.63         46795.98          5687.35   13.83         40095.98     598.45    2.80
 16         46795.98         53270.18          6474.20   13.83         46570.18     695.08    2.99
 17         53270.18         60640.08          7369.90   13.83         53940.08     805.08    3.18
 18         60640.08         69029.59          8389.52   13.83         62329.59     930.29    3.36
 19         69029.59         78579.80          9550.20   13.83         71879.80    1072.83    3.55
 20         78579.80         89451.27         10871.47   13.83         82751.27    1235.09    3.74
 21         89451.27        101826.80         12375.53   13.83         95126.80    1419.80    3.93
 22        101826.80        115914.47         14087.68   13.83        109214.47    1630.07    4.11
 23        115914.47        131951.17         16036.70   13.83        125251.17    1869.42    4.30
 24        131951.17        150206.54         18255.37   13.83        143506.54    2141.89    4.49

 

[SimpleMeLike]

Honesty is everything as the truth is all that matters...so here is some brutal, embarrassing honesty:

Long story short...my education as a trader has cost me ~$140k...And I absolutely do not have anymore to lose. My primary choice for gambling was long options believing that "it has to happen"...but it never did and I absolutely deserved to learn that lesson. If it wasn't for options I would have still lost the same amount of money...the problem was obviously me as the driver, not the trading vehicle.

After a 6 month break to really reflect on my failures I decided to get away from options and focus on futures (for a number of reasons not relevant to this thread). I've always been intimidated/afraid of futures trading but drawn to them for whatever reason. After some success paper trading I decided to go live trading micros...actually doing the things you are supposed to do...and I am profitable.

Although this thread is slightly premature based on my skills...the time is coming and I should probably get started with raising capital sooner rather than later.

Looking for some genuine advice on what to do here. I am 37 yo male, I do not have a job and really really do not want to go back to the work place, (haven't worked since 2018). I am really fortunate in that I own a decent house and a profitable small business with zero debt...but my lifestyle has to be extremely frugal due to very low income. Too frugal in fact.

So where would you look for trading capital in this situation? I have about $25k in an IRA I could cash out, probably another $20k in physical goods I could let go of with reluctance...but that's about it.

- Job is most obvious choice, unfortunately.
- Prop firm worth it? would I have to trade their specific way? would they even be interested?
- Take out a loan? If I am profitable maybe it would be worth taking out a cash loan of some sort.

Just looking for some advice,

thanks ET.

Hello zghorner,

Trade your own money, stop asking people for money or getting loans. Start your trading business with your own money.

And if you don't have enough money then.

1. Save some cash or trade micros until you build an account.

 

[vanzandt]

Any money placed in the business has a higher probability of profits no doubt, it's not neglected. As to pouring 100% into that, I like trading.

I bet I'm not wrong about this....
You could have $5M in the bank and have the family members you (most admirably) care so much about completely taken care of... and you would still trade.

Deep down, it's the game you love, it's not the money.

And there's nothing wrong with that, it doesn't make you a "gambler" despite what some here have said.
I'm the same way. In my case however, I do love to gamble. I'm not ashamed of that, it is what it is.

Imagine a skilled and seasoned card counter that sits down at a black-jack table with $5000 for 8 hours, exercises incredible discipline in the bets and adheres to all his rules. At the end of the 8 hours he has $10K in front of him and it was easy, because he knows what he knows.

Now, imagine that same card counter getting up from the table, and as he's walking out of the casino, stopping at the roulette table and throwing $1000 on a single number bet for the 35:1 payout... and doing it a few times. Stupid right?

I think you can be that card counter and build your pot. Despite what others here have said, there's no way you didn't learn a thing or two losing that $140K. You've paid your dues, and you can get there now. But if there's one piece of advice I can offer in addition to all the other great advice you've read in this thread... always walk straight out. Build slowly, and never stop at that table. It's the only way you'll get there.

 

[KGTrader4]

Zghorner, you’ve gotten some good advice here, and some shitty advice too. I’m not an experienced trader, but I’m experienced in life.
DO NOT BORROW MONEY TO TRADE. FULL STOP.

You have a family. You are 37 years old and haven’t worked in 4 years. You’re wife must be a saint.
Get a job. That’s how you find additional trading. I know it sucks. That’s life.

there’s a guy I follow on FInTwit and have actually interacted with, who’s a smart guy, and a good guy. He’s a good trader, I think, he has 45,000 followers. Very forthcoming with info. And for $10 a month I am one of his “superfollowers” which gives me access to some of his thoughts that he doesn’t tweet publicly. But that’s not the point, it’s just context.

the guy is very immersed in trading. But he’s got a family too so he has a full time job. He put out a video, you should watch it. Seriously, if you had a job, but we’re still able to trade, you’d have the best of all worlds and you wouldn’t have to let go of the dream of being a full time trader.

 

[zghorner]

I bet I'm not wrong about this....
You could have $5M in the bank and have the family members you (most admirably) care so much about completely taken care of... and you would still trade.

Deep down, it's the game you love, it's not the money.

And there's nothing wrong with that, it doesn't make you a "gambler" despite what some here have said.
I'm the same way. In my case however, I do love to gamble. I'm not ashamed of that, it is what it is.

Imagine a skilled and seasoned card counter that sits down at a black-jack table with $5000 for 8 hours, exercises incredible discipline in the bets and adheres to all his rules. At the end of the 8 hours he has $10K in front of him and it was easy, because he knows what he knows.

Now, imagine that same card counter getting up from the table, and as he's walking out of the casino, stopping at the roulette table and throwing $1000 on a single number bet for the 35:1 payout... and doing it a few times. Stupid right?

I think you can be that card counter and build your pot. Despite what others here have said, there's no way you didn't learn a thing or two losing that $140K. You've paid your dues, and you can get there now. But if there's one piece of advice I can offer in addition to all the other great advice you've read in this thread... don't be me, always walk straight out. Build slowly, and never stop at that table.

thank you very much for that comment.

And you're right...I am going to trade because I love trading, there is no "i've made it so now I can retire to the exotic beach" amount for me. I started trading physical goods at 16 years old quite literally buying low and selling high (with the secret ingredients being elbow grease and marketing+communication skills). While trading financial markets is different...its really not in that the true secret ingredient is getting after it.

And its easy for people to read my comments, how open and blatant I am with my failures and mistakes then immediately pass judgement that I'll never change. I do admit that I have been far too slow in learning some powerful (and common) lessons. So I don't blame them...and appreciate their doubt. It is like fuel to me, a challenge, doubt is an enemy to be overcome.

some miraculous things have come from this thread, the truth was the correct path...now its all up to me.

I'll come back after a while with the results, whether good or bad.

 

[smallfil]

Start small, whatever you can afford and hone your skills. Chances are good you do not have all the knowledge and skills to succeed as a trader. Mark Brown already listed it for you. By trading small, you are able to gain knowledge and develop your skills as a trader. Just because you have a huge capital, does not guarantee your success. I have a friend who lost millions in the stockmarket so, I know how easy it is to lose your monies if you trade without an edge.

 

[zghorner]

Zghorner, you’ve gotten some good advice here, and some shitty advice too. I’m not an experienced trader, but I’m experienced in life.
DO NOT BORROW MONEY TO TRADE. FULL STOP.

You have a family. You are 37 years old and haven’t worked in 4 years. You’re wife must be a saint.
Get a job. That’s how you find additional trading. I know it sucks. That’s life.

there’s a guy I follow on FInTwit and have actually interacted with, who’s a smart guy, and a good guy. He’s a good trader, I think, he has 45,000 followers. Very forthcoming with info. And for $10 a month I am one of his “superfollowers” which gives me access to some of his thoughts that he doesn’t tweet publicly. But that’s not the point, it’s just context.

the guy is very immersed in trading. But he’s got a family too so he has a full time job. He put out a video, you should watch it. Seriously, if you had a job, but we’re still able to trade, you’d have the best of all worlds and you wouldn’t have to let go of the dream of being a full time trader.

My wife is a saint, she knows my history and really believes I will figure this stuff out...everyone I know pretty much just assumes it will work out much as I have naively done myself. unfortunately, It wont just work out if it is missing some key ingredients...I have been trying to make a cake without any flour or eggs.

And I appreciate your suggestion on getting a job. It seems to be the most realistic, level-headed approach.

 

[KGTrader4]

My wife is a saint, she knows my history and really believes I will figure this stuff out...everyone I know pretty much just assumes it will work out much as I have naively done myself. unfortunately, It wont just work out if it is missing some key ingredients...I have been trying to make a cake without any flour or eggs.

And I appreciate your suggestion on getting a job. It seems to be the most realistic, level-headed approach.

I know it’s a tough pill to swallow, I was self employed most of my working life.

just look at it as a means to an end.
NTW, props to you on your honest and transparent post