Am I Wasting My Time?

[Gaslight Capital]

Trading with only $100k of capital is not even close enough to potentially trade for a living

I start my traders with $26,000 and they start off trading odd lots. Their stop loss is $1000 on starting equity, and so long as equity remains >$25,000 they can stay as long as they like to try to make it, and they can reduce size to as low as one share. Trade size increases as predetermined goals are met. At $20,110 closed profits a trader is trading a 2 lot of the emini and would now qualify for increased size and capital.

If you are starting with $100,000, then put $74,000 into t-bills, set a $1000 stop loss on the account, and start trading 10 lots of SPY. Increase size slowly every ten points in closed net profit. Reduce size during draw downs. If you find your equity is ever <$25,000 stop and go do something else and never look back, as this isn't for you.

I am not recruiting.

 

[Tall Mike]

If you want to become a trader you must first believe in yourself. Empty your cup every day and sharpen your saw before you cut the wood.

And I would agree with this, however, I feel like this is just not where I should be focused on at the moment.

I think first and foremost I need to look at the facts.

I can "believe" I want to be a billionaire, but truthfully those adds are EXTREMLY slim.

I don't think enough people talk about having an edge in the markets and instead think that psychology is the end all be all.

Please don't take this as me trying to bash you or anything. This is just something I've observed and I'm glad you brought this up.

 

[southall]

Trading for a living comes down to your monthly PnL/ monthly cash flow.

What is your monthly win%, how much will you make in a winning month, how much will you lose in a losing month.

Is your edge robust, will it last for years, or it something that will only work in current market conditions.

To trade for a living you need something that makes a profit in 80%+ of months over the next 10 years.
60% winning months isn't going to cut it. You will have too many months where you dont make money.
With that kind of system you will need other income streams.That is why hedge funds that might only have 50% (or less) winning months, charge monthly management fees.

But if you are confident your edge is strong enough to make money in the vast majority of months then you can probably trade for a living.

 

[MrMuppet]

In a nutshell: Don't do it. Period. This job is way too hard for the average person and if you just dabble with it, you will get nowhere.

Before you even think about trading for a living, you should be able to make a nice profit as a side business.

- 100k won't get you into any scaling issues so you should be aiming for 50-100% return, which is easily doable until you hit the wall (which depends on the market you trade). Everything below is just not worth it.
Especially for small fry, capital efficiency is key, because round turn costs are so high. So if you cannot make 50k a year, just don't think about trading for a living...and 100k margin is more than enough to achieve that.

- Don't think about other peoples money yet, that's a completly different ballgame, really. Your overhead will be so high, you need a different strategy.

- Leave the liquid markets for niche markets. This is probably the best piece of advice I can give anybody who wants to get into trading. If you dabble with S&P500 stocks, ES, CL, treasuries or FX and on top of that with technical analysis or orderflow (aka. the trash everyone does), you won't get anywhere.
Propshops and other high volume firms trade for cents per contract for exchange AND clearing and retail pays 10x that. You don't have the tech nor the manpower to keep up with these guys.
You need to trade something that nobody gives a shit about and you can preferrably trade against retail or small commercials. None of these markets can be accessed through IB or any other discount broker, so you have to dig a little. Exotic currency NDFs, small low floating stocks outside the US.

- Don't trade momentum, look for relative value. Everyone and their mom trades momentum or some kind of break out/technical level strategy. Trades are crowded, so a lot of downside and no upside.

You're looking at 3+ years of exhausting and painful grind 8h/day. You should be break even after one year, after year 3 you can probably make some dosh.
I personally tell everyone not to do it. It's about as easy as becoming a professional athlete...and if the only thing you want is money, just get into sales. After 3 years you at least have your pipeline and your customer base you can drain plus you will still have all of your friends and your wife.

 

[wrbtrader]

Sorry, I didn’t understand ... you are saying he has to be profitable within predefined time period?

Usually when someone post like that...they usually mention an important fact about their own trade performance.

Those that don't...typically they have given up on trading. Simply, it doesn't seem like he's getting anything useful out of trading nor achieving whatever goals he had.

Therefore, just like in any other profession or career...folks tend to say go find something else that makes you happy. Nothing wrong with that.

Trading as a career is an extremely tough gig to do but I've met others (don't know much about him) that stick with it year after year...losing tons of money before coming to the same conclusion as the OP.

Some realize that and then decide to only view trading just as a hobby or academic pursuit. In a way, it keeps their losses low. That's a good thing while others take a break from trading and return back to it months / years later but a lot smarter and more realistic.

Hopefully, he had not lost tons of money and its just a bad taste in his mouth sort'uv speak.

P.S. There will be a ton of replies by many that will basically tell him that trading is tough and not to do it. Messages like the OPs typically generates those types of replies.

wrbtrader

 

[murray t turtle]

I wanted to post this question here. Might be a stupid question, but just trying to look at this from a realistic perspective.

Am I wasting my time chasing the "trade for a living" dream?

I've done countless hours or research and it seems that the only people making real money in this industry are selling their systems or selling their mentoring and coaching services.

Additionally, I took a step back and thought about the potential outcomes and none of them really seem to add up either. The best-case scenario to me would look like I make several thousand for all the time and energy put into it, and that might not even be realistic.

- Trading with only $100k of capital is not even close enough to potentially trade for a living
-
- No track record
- Lastly and most importantly, I feel that there is barely any edge out there for the retail trader. With all the competition in the market, I find it very hard to believe anybody out there truly makes an income from just trading for a living.

I started my trading education path back in 2011 up until about 2016 then life came around, but recently I've been coming back to the drawing board but this time around knowing what I know now, I am wondering if this is even a realistic path to go down or if I should just stop now and focus my time on something that could pay off more instead of going down the rabbit hole.

Again, this might be stupid, and I am sure I will get a lot of "noob thinks he is going to make millions overnight" or "haven't even traded yet and is already going to quit" type replies but I'm just trying to look at this from a realistic and logical path this time around.

Thanks!

%%
Good news /bad news. Bad news is words '',,,,,,,,,, make millions overnight/LOL'' Lottery is a stupid tax on people that cant do math. Just like dave ramsey says...………………………………………………...………...…...…………………...……………………………………..
Trading for a living??
IF you are debt free/are you debt free now??
Ever trade/invest any + get dividends/paid for home or cabin ??
Ever eaten any home grown red or orange tomatoes/apples/green apples/green tomatoes?????
Actually I don't like green tomatoes myself; green granny smith = fine.
You may want to find out out how most make money in stock market;
its got nothing to do with ''I feel...……..retail..../ 5 minute charts/.competition...……………………...''
I WISH you had a banker dad like mine/who told me as a kid ''son I don't feel like gOing to work'' But so what?? Banker dad went to WORK anyway...…………………………………………………………………………………………

 

[RockNar]

And I would agree with this, however, I feel like this is just not where I should be focused on at the moment.

I think first and foremost I need to look at the facts.

I can "believe" I want to be a billionaire, but truthfully those adds are EXTREMLY slim.

I don't think enough people talk about having an edge in the markets and instead think that psychology is the end all be all.

Please don't take this as me trying to bash you or anything. This is just something I've observed and I'm glad you brought this up.

First & foremost you & only you are responsible for how you feel. You say: you can believe you want to be a billionaire but odds are slim. "So do you truly believe?"
Have you done all you can to be the best trader you can be? if so you should be convinced if this is for you or not.

 

[speedo]

First understand that you are posing the question in a forum well populated with losers and trolls. Are you wasting your time? That's entirely up to you. I've been doing this for over 20 years and know and have known many traders who make a lot of money trading although not nearly as many who have failed.

First, you need to thoroughly understand the nature of price development. Books and seminars can help but true understanding comes from countless hours of focused observation of price discovery. Given that hard earned understanding, you can develop or adapt strategies based on that understanding. You must then test these ideas, preferably both through back and forward testing. You need to know what your risk reward scenario as well as odds that a trade will work. From that work, you need to develop a defined trade plan with attendant rules which YOU MUST FOLLOW. You need to know your edge, not only conceptually but mathematically.

Most will not do the above but of those who do, many will fail due to the instability to behave with the discipline needed. The behavior is common to losers, adding to losers (not building positions which is another thing but rather in hopes the trade will turn around). Cutting gainers too short, impulse or revenge trading etc. etc.. You have to not only know what your weaknesses are (ditch the bloody ego) but do what is necessary to rid yourself of them. BTW 100k is plenty to start with and certainly less with a proven track record of trading small size until both confidence and competence are achieved. To repeat, most will not get there and whether you do is up to you.

 

[nursebee]

First understand that you are posing the question in a forum well populated with losers and trolls. Are you wasting your time? That's entirely up to you. I've been doing this for over 20 years and know and have known many traders who make a lot of money trading although not nearly as many who have failed.

First, you need to thoroughly understand the nature of price development. Books and seminars can help but true understanding comes from countless hours of focused observation of price discovery. Given that hard earned understanding, you can develop or adapt strategies based on that understanding. You must then test these ideas, preferably both through back and forward testing. You need to know what your risk reward scenario as well as odds that a trade will work. From that work, you need to develop a defined trade plan with attendant rules which YOU MUST FOLLOW. You need to know your edge, not only conceptually but mathematically.

Most will not do the above but of those who do, many will fail due to the instability to behave with the discipline needed. The behavior is common to losers, adding to losers (not building positions which is another thing but rather in hopes the trade will turn around). Cutting gainers too short, impulse or revenge trading etc. etc.. You have to not only know what your weaknesses are (ditch the bloody ego) but do what is necessary to rid yourself of them. BTW 100k is plenty to start with and certainly less with a proven track record of trading small size until both confidence and competence are achieved. To repeat, most will not get there and whether you do is up to you.

How does one sort out losers and trolls? That seems to come with either disclosure, which does not happen, or by feel over many years observing folks here.

 

[murray t turtle]

In a nutshell: Don't do it. Period. This job is way too hard for the average person and if you just dabble with it, you will get nowhere.

Before you even think about trading for a living, you should be able to make a nice profit as a side business.

- 100k won't get you into any...…………………………………………………………………………………….

- Leave the liquid markets for niche markets. This is probably the best piece of advice I can give anybody who wants to get into trading. If you dabble with S&P500 stocks, ES, CL, treasuries or FX and on top of that with technical analysis or orderflow (aka. the trash everyone does), you won't get anywhere.
Propshops and other high volume firms trade for cents per contract for exchange AND clearing and retail pays 10x that. You don't have the tech nor the manpower to keep up with these guys.
You need to trade something that nobody gives a shit about and you can preferrably trade against retail or small commercials. None of these markets can be accessed through IB or any other discount broker, so you have to dig a little...………..

Don't trade momentum, look for relative value. Everyone and their mom trades momentum or some kind of break out/technical level strategy. Trades are crowded, so a lot of downside and no upside.

You're looking at 3+ years of exhausting and painful grind 8h/day. You should be break even after one year, after year 3 you can probably make some dosh.
I personally tell everyone not to do it. It's about as easy as becoming a professional athlete...and if the only thing you want is money, just get into sales. After 3 years you at least have your pipeline and your customer base you can drain plus you will still have all of your friends and your wife.

%%
Good points;
but your 100k quote just reminded me of something;
100k is way/wa TOO MUCH TO START...…………………………………………………………….