If you have been day trading for more than two years, do you have a fund cap? e.g. you only need $40K for your day trading account, if your net account value is more than that, you will withdraw the additional fund, because more fund means more risk to you rather than more profit.
Day traders, do you have a fund cap?
- Thread starter hurricane_sh
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I see risk as lack of education or not balanced. If you are afraid of risk tells me you don't completely trust your Trading Plan, been day trading since 1986-ish, most of my trading has been in retirement accounts, so I have never taken out for personal use any as I am not old enough. Taxable, I have generally taken out to pay taxes and 10%. But as far as a cap, never. Can't make more unless you have more.
yes, that is the most important thing. When I was young I was simply trying to build up my trading account as large as possible. It got very large and I lost it all. Wouldn't it be nice if trading was so reliable we could just compound from here to eternity? Trading is a risky business and it can make you a lot of money but it is not reliable. No, any trader should consider trading his business, and retirement planning something else. So yes, the trading account must be capped at a certain percentage of your total net worth. Laugh if you want but asset allocation is everything. Timing helps.
This is a subjective matter; differs between trader types 
-- there really is no right or wrong answer.
-- there really is no right or wrong answer.I don't know what a Trading Plan is because intraday price movement is random. Trading in retirement accounts seems like a good idea...a very cautious and risk-averse strategy rather than a sign of lack of trust in an elusive and to most unmanageable plan to trade intraday randomness.
There is only so much you need to trade say $20 per pt, no point being greedy or having money and not enjoying it.
So I will be capping it, 20k maybe 30k, might increase over time, when i have money in the bank.
Spend half, put the other half away, use to top back up incase of a bad day or 2.
So I will be capping it, 20k maybe 30k, might increase over time, when i have money in the bank.
Spend half, put the other half away, use to top back up incase of a bad day or 2.
I have a cap. But is a percentage of my net worth. I trade through a prop firm and theyre pretty stable institutions but i wouldnt want my entire net worth in a prop firm or clearing house. Its rare but they have been known to go under and would be quite a battle to get your money out/back
Certainly not - I want to keep growing the account, gradually increasing my position-sizing in proportion with the capital in the account. (My guess is that anyone who has been successfully day trading for more than 2 years will surely give this answer?).
Are you referring to the risk of the broker going bankrupt, or what? (What other way would more funds in the account imply more risk?).
no, we keep it spread, not just for risk of broker bankruptcy, but in every way. Never too much at one broker, never too much in one trading strategy. I don't really day trade, I am looking for much larger moves, but I trade something everyday. I learned my lesson. If it is going good it will take care of itself. But in the end, you are going to need some kind of normal retirement account. And that retirement account will look a lot bettter in your old age if you keep your trading account under control. I just think (or did think) of my trading account just like it was a hardware store or restaurant. Good money. More than you can make buying and holding. But too risky when you are old to put it all on the line like you routinely did when you were young because you just don't have the time or options to make it back up again like I did when I first blew up.