Are you a successful at home day trader with no other source of income who began with modest means?

[Johno1]

I started with a $90K account with living expenses in the bank. I had a worst case drawdown to about $68K. These days I keep $150K in my day trading account and additional profits go into other longer term investments.

Actually not so difficult ... I started my 1st year with enough in the bank to cover living expenses. And I knew if I blew out I could have probably found another engineering job. But I had no desire to return to the politics of the corporate world. I also was pretty good at being conscious of my spending. I probably was a bit frugal for a couple years until I knew I could spend more and be highly confident that I would make enough $$$ to meet all my needs.

This has the ring of truth, if you know what you are doing $100K+ is enough to make a reasonable living without having to take on too much risk, smaller trades more often, remember if you don't know what you are doing no amount will be enough. 10,20,50K accounts by their very nature stop you from trading successfully if you are trying to make wages from them particularly whilst trying to grow them, proportionally the risks become expotential. Although these days I do have substantially more in the accounts and regularly get down on my knees and thank god for leverage, free money. The important takeaway is that you need to be tucking a fair bit away for a rainy day, this automatically implies a larger account balance, that also means no whisky, hookers and coke, at least not all the time anyway.lol

Cheers John

 

[Johno1]

Well it's worked for me. I have 85 - 90% winning trades in a given year. And before I get questions on how I can have that high of a percent of winners it's what I alluded to earlier .. not going for home runs and taking small profits.

And the fallacy in your statement above is that you're insinuating that the losing trades are apparently larger losses that would more than offset profits. If one has discipline then they exit with small losses when they realize they were wrong on the trade.

We are on the same page, people apply their own context to statements. And yes my hit rate is similar, but my drawdowns are probably larger at times, my market view gets me in and my market view gets me out not a percentage or dollar figure, and often I will do things that people would cring at. Although, my real grind is to keep looking for ways to increase profitability, my lifetime masterpiece, after my children.lol
Cheers John

 

[Johno1]

To earn a living trading 150k you would need to make 70-80k a year consistently. That would mean a 53% Annual return on 150k consistently.

Which I find a bit hard to believe unless you are taking excessive risk via leverage, then it just means it is a matter of time before you blow out your account.

You can use substantial leverage and still not be exposed to excessive risk, as always it is not what you do but rather how you do it.
Cheers John

 

[Johno1]

I find it even harder to believe that you either (a) didn't read my posts or (b) didn't comprehend them.

And trading $150K one can generate a very good return and roll excess profits into longer term investments. My trades are day trades, swing trades and buy and hold. My annual return is not based on $150K.

PS Please point me back to a post that I said I live in mansions. I said I lived ion a oceanfront house and on an island in the southeast.

Comprehension deficit, you were very clear that you changed from a high stress/ big money lifestyle to one of more modest expectations. I've done much the same and life is good.
Cheers John

 

[i am nobody]

You can use substantial leverage and still not be exposed to excessive risk, as always it is not what you do but rather how you do it.
Cheers John

Highly qualified traders in leveraged products can be less risky than unexperienced newbies in non leveraged products. So risk depends on who does what in what way?

 

[Johno1]

Highly qualified traders in leveraged products can be less risky than unexperienced newbies in non leveraged products. So risk depends on who does what in what way?

Exactly, the only difference is that the real qualification is that you adhere to sound business practices in your decission making. I maintain my derivatives accounts at the level required to achieve my goals, income plus growth, and then invest my remaining capital elsewhere that is reasonably safe. This way I should be able to remain in the games indefinately. Anything else leaves me open to catestrophic loss at some point, and if you play long enough it will find you.
Cheers John

 

[brdalloca]

My Story.
(First, i am brazilian so sorry for my english...)
I studied electrical engineer and MBA in Finance, it sure helps on the market.
I started trading by myself doing some crazy operations based on 3 days trading courses. Some winning and lots of loosing days probably went down 50% first year. Then, after the mba, i started working for a big US Bank (hq in Brazil) as a broker... Some people can or could make a lot of money in this job but, for sure, is not for me. Dealing with clients money was a nightmare ...You really must not think too much if you want to make money as a broker.
Then moved to trade on a small fund, it was really nice on the begining but trading with a group of people there is always someone that will come with the "IF" - if you had gone short there, if we had hold here...etc - and change the main strategy...it turned into a psychological pressure...The strategy that is working great, AND YOU BELIEVED, is throwed away because in one month some "flip a coin" strategy was better. So i decided that, due to my weakness on emotions with clients and the stress of a fund , it was time to give a day trader career a chance.

I had a home and almost 2 years expenses so i started trading futures in Brazil on my own. First year, the year of my son birth, fear took over but i had a decent 25% return on 100K usd ( that's the main difference between HF and retail - for a fund 25% would be incredible that year but for my expenses was far from what i needed). Second year i was trading index futures and BRLUSD(brazilian real to usd). Most people wont believe but they have great volume but what makes IMO one of the hardest instruments to trade is the lack of traders, specially on BRLUSD - incredible volume but i can think of 8 large international banks playing with their algos. So testing some US plataforms i started trading futures instruments and felt much more comfortable to trade it than the Brazilians one. Things are going well since that, i could double first year and last 2 years i am doing an average of 16% monthly on 100k usd.
Before the trolls (once again, sorry for my english) some points and conclusions:
- IMO i dont see any reason to compare HF with retail, they are different in so many ways. HF is a big boat and retail is like a JETSKI...i cant play in several conditions but i can move in and out very quick. In the end, i think that return on a Big HF is much harder!
- I never go for the home run. It hurts but i tried and failed before.
- I dont believe in 99% trading courses, THERE IS NO REASON WHY SOMEONE WOULD SELL AN EDGE FOR 1K (BEST CASES), there are some 99$ "bargains" as well.
- I always keep 100k in the account. Why that??? if you are doing great why not trade bigger??? Luckily i had just a few drawdowns days in the past years but my worst day was when i was + 4.7K on a day and told my wife "baby, i am going to make a fortune from now on" two hours later i was down - 6K. I "almost sure" learned to respect the market and i am sure i dont know what's gonna happen tomorrow. Interest rate in Brazil are pretty high almost 6%year, so i keep some money there.
- I am terrible on equities and long term portfolios. Day trading i found that fits better to my personality.
- I dont believe in this freedom people love to talk about in trading. For me it's like to be in a beach with a notebook and a chain in your feet - it's a cliche but for me its true, it's all about DISCIPLINE, DISCIPLINE and DISCIPLINE.
- I am sure working for a HF you can make more money , huge salary, bonus...etc. But from the offers i got - trading me and myself and do not have to deal with all the ego's everyday is much MUCH better.
- I use leverage but i dont forget that is my biggest risk.
- I believe a fortune can be made for sure. In this moment i am avoiding the risk to blow the account and of course, the risk to make a fortune. If i keep making a good average on a monthly basis maybe i will trade bigger in the future.
- I dont think algos are bad...It's easy to see when all thousands algos go nuts and great opportunities happens. In Brazil, on the other way, just few algos playing is terrible!
- My worst fear is another "flash crash", i am a bit paranoid on that. I try to imagine how i would deal if it happens (unfortunately, i think it may occur) and yet i couldnt find an escape.
- I trade most TF, ES, NQ, CL AND GC.
- Books: Market Wizards, Mastering the trade, Pit Bull lessons of a wall street day trader and Trading in the zone. But what i think of courses goes to books...Good for ideas but i dont believe there is any holy grail hidden there.

 

[steoli]

Care to share what FCM you work for that has had zero successful daytraders over the last 20 years?:eek:

It's not important where the data is; the truth is that, it's a reality. The only place, where everyone is winning, is here in ET.

For instance, claiming that someone achieves 85% to 90% of win rate "daytrading" stocks or forex, for me and for what I'm used to see, seems quite absurd (100+ daytrades). If I disagree with 20 people claiming this, I'm sure I will win from 18 to 20 people.

It's not impossible! Tim Sykes walks around with that kind of returns.

Don't get me wrong, I can have an opinion on this...

One other thing I notice a lot is that the ones that try the hardest to defend themselves as profitable traders are normally the greatest losers...

Market is not about ego; it's about money...

Regarding the question on the topic I would change just one thing:

Is it possible to be a successful at home trader with no other source of income who began with modest means?

And the answer is: YES!

 

[i am nobody]

If I disagree with 20 people claiming this, I'm sure I will win from 18 to 20 people.

Your statement seems to me absurd too. You are sure about it even without knowing ANY of these people? We call this arrogance. Or stupidity. Or ignorance.

 

[brdalloca]

My Story.
(First, i am brazilian so sorry for my english...)
I studied electrical engineer and MBA in Finance, it sure helps on the market.
I started trading by myself doing some crazy operations based on 3 days trading courses. Some winning and lots of loosing days probably went down 50% first year. Then, after the mba, i started working for a big US Bank (hq in Brazil) as a broker... Some people can or could make a lot of money in this job but, for sure, is not for me. Dealing with clients money was a nightmare ...You really must not think too much if you want to make money as a broker.
Then moved to trade on a small fund, it was really nice on the begining but trading with a group of people there is always someone that will come with the "IF" - if you had gone short there, if we had hold here...etc - and change the main strategy...it turned into a psychological pressure...The strategy that is working great, AND YOU BELIEVED, is throwed away because in one month some "flip a coin" strategy was better. So i decided that, due to my weakness on emotions with clients and the stress of a fund , it was time to give a day trader career a chance.

I had a home and almost 2 years expenses so i started trading futures in Brazil on my own. First year, the year of my son birth, fear took over but i had a decent 25% return on 100K usd ( that's the main difference between HF and retail - for a fund 25% would be incredible that year but for my expenses was far from what i needed). Second year i was trading index futures and BRLUSD(brazilian real to usd). Most people wont believe but they have great volume but what makes IMO one of the hardest instruments to trade is the lack of traders, specially on BRLUSD - incredible volume but i can think of 8 large international banks playing with their algos. So testing some US plataforms i started trading futures instruments and felt much more comfortable to trade it than the Brazilians one. Things are going well since that, i could double first year and last 2 years i am doing an average of 16% monthly on 100k usd.
Before the trolls (once again, sorry for my english) some points and conclusions:
- IMO i dont see any reason to compare HF with retail, they are different in so many ways. HF is a big boat and retail is like a JETSKI...i cant play in several conditions but i can move in and out very quick. In the end, i think that return on a Big HF is much harder!
- I never go for the home run. It hurts but i tried and failed before.
- I dont believe in 99% trading courses, THERE IS NO REASON WHY SOMEONE WOULD SELL AN EDGE FOR 1K (BEST CASES), there are some 99$ "bargains" as well.
- I always keep 100k in the account. Why that??? if you are doing great why not trade bigger??? Luckily i had just a few drawdowns days in the past years but my worst day was when i was + 4.7K on a day and told my wife "baby, i am going to make a fortune from now on" two hours later i was down - 6K. I "almost sure" learned to respect the market and i am sure i dont know what's gonna happen tomorrow. Interest rate in Brazil are pretty high almost 6%year, so i keep some money there.
- I am terrible on equities and long term portfolios. Day trading i found that fits better to my personality.
- I dont believe in this freedom people love to talk about in trading. For me it's like to be in a beach with a notebook and a chain in your feet - it's a cliche but for me its true, it's all about DISCIPLINE, DISCIPLINE and DISCIPLINE.
- I am sure working for a HF you can make more money , huge salary, bonus...etc. But from the offers i got - trading me and myself and do not have to deal with all the ego's everyday is much MUCH better.
- I use leverage but i dont forget that is my biggest risk.
- I believe a fortune can be made for sure. In this moment i am avoiding the risk to blow the account and of course, the risk to make a fortune. If i keep making a good average on a monthly basis maybe i will trade bigger in the future.
- I dont think algos are bad...It's easy to see when all thousands algos go nuts and great opportunities happens. In Brazil, on the other way, just few algos playing is terrible!
- My worst fear is another "flash crash", i am a bit paranoid on that. I try to imagine how i would deal if it happens (unfortunately, i think it may occur) and yet i couldnt find an escape.
- I trade most TF, ES, NQ, CL AND GC.
- Books: Market Wizards, Mastering the trade, Pit Bull lessons of a wall street day trader and Trading in the zone. But what i think of courses goes to books...Good for ideas but i dont believe there is any holy grail hidden there.

Forgot to answer.
Is it possible to be a successful at home trader with no other source of income who began with modest means? Yes! But I highly suggest at least 30-40k to begin and 6 months living expenses.