best strategy for small accounts?

Hi there ...

I said this before, and I'll say it again here, no one would teach you a successful trading model, but people rather teach trading tools (technical and fundamental) ... and then everyone takes his own path in search of his own profitable trading model ... which is basically something that suits their trading requirements ... for instance, I wouldn't recommend a part-time trader to follow my aggressive intra-day model ... simply 'coz his time requirements wouldn't allow him/her to ...
 
Originally posted by Rigel
19,000 at 25%/mo. for 12 months.
19000* (1.25)^12 = $276,486/year
.
19000* (1.25)^24 = $4,023,406/2years
19000* (1.25)^36 = $58,548,270/3years
If you're for real and can keep the same profit margin you have a gold mine. Don't change a thing.
The main danger is probably psychological, fear of success, etc..
Trying new strategies would really be stupid.
More...

WTF???

When I read statements like this I really have to wonder whether the person making them actually trades himself.

To the original poster of this thread: when asking for opinions, be VERY careful of accepting any (including mine) at face value. ALWAYS do your due dilligence.
 
Janitor,

I think it's great that you are hitting such great monthly numbers, but for what it's worth, I would consider some other options. You could work full time for a year and save a stake and get access to better margin. Or you could go to a prop firm. Personally I don't think it's a good idea to expect yourself to come up with better than 25% per month just to live. Imagine how much pressure you'll be under during a down month.

Just my thoughts, but it might be better to wait until you are better capitalized!

Best of luck
 
Originally posted by easyrider
If you are making $1000 a month off a $4000 account consistently you should write a book.
More...

What I find amazing is that you are doing it from an Ameritrade account. You obviously have a style that is a good match for your personality and that you thouroughly understand, both critical to trading success. I'd stick with what you are doing as long as it's working and keep learning all you can about trading in general.

But your first step should be going to a cheap direct access broker. You'd save a ton on commissions and probably get better prices on you buys/sells. There are lots of reviews on this site.

Corey
 
Originally posted by Rigel
19,000 at 25%/mo. for 12 months.
19000* (1.25)^12 = $276,486/year
.
19000* (1.25)^24 = $4,023,406/2years
19000* (1.25)^36 = $58,548,270/3years
If you're for real and can keep the same profit margin you have a gold mine. Don't change a thing.
The main danger is probably psychological, fear of success, etc..
Trying new strategies would really be stupid.
More...

Okay, i've used my calculator a three different ways, and still can't get to those figures. Can someone explain how the math is done, and which buttons are being pressed on the calculator, please, to get these results?

Thanks in advance,
Martha
 
Thanks everyone for the replies.

I have indeed been able to make those great returns for many months, but I only think I could manage it with a tiny account and huge risk tolerance. I have been risking 1/4 to 1/2 of my entire account on each position, and thankfully I've avoided getting burned too badly for a long while. When you're playing bounces on the NAVIs and RRRRs and GMGCs of the world (these days), there's always the risk of something going very wrong.

With a larger account (say $18,000), I would only relegate about 20% of that to playing these high risk dcb's and bottoms. And I only find about one good one a week anyway.

I will try to keep 1/4 in cash, and play the rest more conservatively. I do not expect to continue at 25%/month, or even close to that.

Thanks for the emini suggestion, and the direct access suuggestion. I'll be researching both of these!

Aaron
 
To compound numbers on any simple calculator just take the number being compounded ( 19000 ) then add 25% then repeat process.

19000 + 25% = 23750
23750 + 25% = 29687.50
29687 + 25% = 37109.38

ECT and so on

But as always when considering compounding all it takes it one down month to mess up the whole dream. I personally turned 10k into 150k in 6 months in the hey day of 2000 trading intraday only using full margin and too much risk, so I am no stranger to the dream of compounding. I have subsequently found a strategy that requires less risk and now return less of a % on my own account on a monthly basis. I will share a tidbit of advice regarding account building, so here goes.

When viewing the act of building your account to a larger size, view it as a way to reduce your risk to your account to make a living and less as a way to make more money. Example:

If making 20% monthly on a 25k account offers you a good living, then view the move to a 50k account as a way to risk less to make the same living and not so much as a way to double your current net. Early on in trading many dream of being able to trade a large amount in the same way they trade a small amount. This is a difficult dream as it is so difficult to accomplish over time. In my humble opinion, and my personal goal, is to accumulate enough money in my trading account to make the living I want without ever risking more than .05% on a single trade. I view account size as a way to reduce risk as opposed to a way to increase profits. Just a thought.

AllenZ
 
Okay, i've used my calculator a three different ways, and still can't get to those figures. Can someone explain how the math is done, and which buttons are being pressed on the calculator, please, to get these results?

Thanks in advance,
Martha
More...

Martha,

Use the calculator that comes with Microsoft Windows. Click on the View menu item, then select Scientific.

Let's take this example:
19000* (1.25)^12 = $276,486/year

First, calculate 1.25 ^12, that is, 1.25 raised to the 12th power. Using the calculator, enter 1.25, then click on the x^y button, then click 12, then click the = button. You should get 14.55191...

Now, click on the multiply button, then enter 19000, and click on the = button. The answer is 276,486.38933...

nitro
 
Janitor,

first, what's a DCB?

second, part of me wants to congradulate you on the recent performance, but part of me also wants to give you a friendly warning that trading with such risk management tolerances can be hazardous to your account's future.

What is truly paramount here is that you recognize that you have arrived at a style that is yours. Try to improve it and profit from it as much as you can before you branch out into any other style or security (e-minis). Cut your costs, quotes, commissions to the bare minimum. It makes a big difference in the long run.

Best wishes!
 
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