Hi, all,
Any news? I didn't spend much time looking into these programs or other options as I've been mostly focused on my own trading and improving that.
I'm gaining consistency in my own account now. The profits are not huge in nominal dollars, but they're fairly consistent now. I need some more testing to gain confidence in my approach, but if I can continue like this for another month, I would probably want to find a way to leverage my returns.
The best would probably be to receive some kind of backing and I am considering those programs, although I have some second thoughts with all their restrictions and rules. Seeing how their drawdown rules are designed you're not really trading a 150K account, but a 3K account. 15 lots is the maximum size, but obviously not realistic within those risk parameters.
15 lots on ES = 3000 / (15 x 50) = 4 ES points.
Let's say you take on 5 lots then. A 3K drawdown equates to a 3000 / (50 x 5) = 12 ES points.
I agree that this is some what reasonable for a decent day trader. But 3K is the weekly limit too. So, you basically can't have 2 losing days in a row at 6 ES points each.
Still somewhat reasonable if you're a top day trader, but not much leeway there.
Solution? Scale down further to say 2-3 contracts. That gives you a daily/weekly loss limit of 20/30 ES points. Now it's a bit more realistic. But you're still far from the illusion of trading a 150K account.
Of course - you could simply put up 3K yourself and trade your own bucks with a high chance of blowing out. TST lets you do it with their money though, but you need to pay them $375 and trade in simulator for at least 15 days before passing.
It may be a deal worth taking as I think I can realistically pass it, but not decided yet.
Other options I'm considering:
- Taking out an additional loan with my own trading account as collateral. Effectively, this means that I will borrow the same amount as my current account (10K) and put on a maximum drawdown rule of 25 % of my new account size at 20K. If I hit a 5K drawdown - I will then pay off the entire loan from my trading account and as a result have taken a 50 % hit on my real account which now stands at 5K.
The upside is that I should be able to compound/grow my account at a faster rate if I can maintain consistency.
- Simply continue growing my own account patiently and accepting that it will take a longer time than I initially expected. I'm fine with this too, but the problem is that it most likely means I need to return to the work force for a while. I'm in a unique position right now being able to do this full time, but I'm not likely to sustain myself for much more than 4-5 months from here.
It is possible I can grow my current account sufficiently in that amount of time, but access to more capital obviously makes it easier.
I need another month or so with the same consistency I'm seeing lately to make a choice.
PS: Another option is to simply increase my risk % per trade and increase the current leverage. But I'm not sure I'd be comfortable with that. Maybe I can grow into that if I see that I'm able to stay consistent.
Best regards,
Howard
