How did you grow your account into a big one?

[Stok]

Once you have your edge/system, here is how to ramp up the account: Say you risk 1% per trade (or whatever), using fix fractional position sizing. As the account grows (hopefully), you risk the greater of 1% per trade or 5% of made profits. Run the numbers. Basically, you start risking more per trade on % basis, but you have already built up the "houses" money.

Example:

Starting account $100k. Risk is $1000 per trade.

You build that to $200k, now 1% risk is $2000 or 5% of $100,000 profits is $5000 per trade. So, you are now risking 2.5% per trade. Obviously your DD will go up and you may want to cap it, but it can build up nicely a with a positive expectency edge/system.

Cheers!

 

[gmst]

Quote from Stok:

Once you have your edge/system, here is how to ramp up the account: Say you risk 1% per trade (or whatever), using fix fractional position sizing. As the account grows (hopefully), you risk the greater of 1% per trade or 5% of made profits. Run the numbers. Basically, you start risking more per trade on % basis, but you have already built up the "houses" money.

Example:

Starting account $100k. Risk is $1000 per trade.

You build that to $200k, now 1% risk is $2000 or 5% of $100,000 profits is $5000 per trade. So, you are now risking 2.5% per trade. Obviously your DD will go up and you may want to cap it, but it can build up nicely a with a positive expectency edge/system.

Cheers!

Very practical suggestion. Thanks stok for sharing. I am making a note of it. Very useful if applied correctly!

 

[Ghost of Cutten]

Quote from careless:


For those that where at this point in their past, how did you make your account grow substantially. Are you just grow it by small steps? Took you greater that usual risks? Got you lucky with a trade? Became you better at trading and realized higher yearly returns? Switched you to trading shorter time frames?...

Would be interested in hearing your stories.

Finding a market inefficiency and grinding out very consistent income week after week, month after month for a couple of years, whilst not blowing it all on booze, drugs, women, fast cars etc (i recommend blowing only 1/3 your net income on those vices).

 

[Ghost of Cutten]

Quote from wrbtrader:

If you're single, low debts and low overhead trading costs....compound, compound and compound the profits.

Question - how do you compound on 50k, after taxes and subsistence level income? Unless you live in a shoebox in a tax haven or 3rd world country, 50k is 35k net. That's 3k a month. I don't know about you but it's kinda hard to live a decent life on 20k or less. So even if the guy makes 100% a year, he is going to compound at 20% maximum. And making 100% a year is pretty damn hard without huge risk or a rare trading edge. Even if you were that good, it's far better to get investor capital or a job at a fund and do it on 500k+, then you can make some real money, while drawing a salary that doesn't consign you to one rung above a burger flipper's salary.

Also, how is being single better? If you are married or cohabit, then your rent is halved, and someone else brings in income at basic tax rates. Unless you are dumb enough to shack up with someone who leeches off you and doesn't pay their own way.

 

[BlueTurtle]

Quote from Ghost of Cutten:

Question - how do you compound on 50k, after taxes and subsistence level income? Unless you live in a shoebox in a tax haven or 3rd world country, 50k is 35k net. That's 3k a month. I don't know about you but it's kinda hard to live a decent life on 20k or less. So even if the guy makes 100% a year, he is going to compound at 20% maximum. And making 100% a year is pretty damn hard without huge risk or a rare trading edge. Even if you were that good, it's far better to get investor capital or a job at a fund and do it on 500k+, then you can make some real money, while drawing a salary that doesn't consign you to one rung above a burger flipper's salary.

Also, how is being single better? If you are married or cohabit, then your rent is halved, and someone else brings in income at basic tax rates. Unless you are dumb enough to shack up with someone who leeches off you and doesn't pay their own way.

dude, you are on the wrong site!!!!

this is ELITE TRADER...

we use words like "edge" "20% return" "double money" and "rich" as matter-of-fact!!!!

on this site, first you say you have an edge (absolute fact) and then build your argument on that...

ok, let me try to add value now...

first find a stock that is not followed by many firms....do your research (which is likely bad) and then start to take massive positions when the stock looks horrible (hopefully stocks from 10 to 20 dollars).....not under 10.

then get about 3,000 shares......

this is what I did....and it worked after a few years.

20ish to 70ish and got out high 50's...

if I can do it.....well, then 0.000000000001% of you can do it.

haha

 

[Ghost of Cutten]

Quote from garachen:

I really don't want to pollute this guy's thread. But I think I should shed a bit of light on what my friend meant about "not trying hard enough".

It boils down to this. Most people make trade offs to achieve a balanced life. Family, friends, church, security, etc. His point was, that if your singular goal was to make money and you lived consistent with that goal than it was very achievable. Of course this is not a healthy way to live but I do believe just thinking about what you could accomplish if you were 100% dedicated to that purpose is helpful. It just opens your eyes to new things.

I sometimes tease my employees who are unmarried when they complain about their lack of dating/marriage. I tell them that they are just not trying hard enough and if they dedicated themselves even just 2 hours a day to the singular purpose of getting married then they could do it. Of course for some there might be extenuating circumstances but I view it as just a numbers game. If you talk to 5 new people every day, which isn't objectively difficult, your chances of meeting someone is pretty high.

So, same thing for trading or making money. You'd be surprised to see how many people claim that as a goal but don't spend at least 2+ hours a day making concrete steps to further that goal. People are creatures of habit and getting caught up in the grind going to work everyday but even there not REALLY focusing on improving their situation is just too easy.

Even for people who have a job. How much time can we honestly say we focus on 'how to I double my pay' and 'what can I do for the next 2 hours to 100% devote myself to that plan'. After spending some time thinking about this and considering lots of possible actions it becomes apparent that making more money and working harder at the tasks assigned are very rarely coupled.

So, as I said, I listened to this friend of mine every day for about 2 months before I got the courage to act on it. He was really very motivating. I fear I do not express his points nearly as eloquently as he did but I hope you can overlook that.

Good point. Consider that motivated people have done the following:

i) put a man on the moon
ii) made $50 billion dollars
iii) won a world war
iv) beaten a superpower with a rag tag 3rd world peasant army
v) numerous amazing inventions
vi) got billions of people to believe complete bullshit
vii) fucked 1000+ hot women
viii) various athletic achievements of legendary proportions
ix) abolished slavery
x) won equal rights for various oppressed minorities

By contrast, making a few million in 5-10 years out of trading should not be as difficult, if equal effort is applied.

There is just one problem - who says you get to choose your motivation levels? I'd be interested in your friend's insights on solving lack of motivation.

 

[oldtime]

Quote from Ghost of Cutten:

Question - how do you compound on 50k, after taxes and subsistence level income? Unless you live in a shoebox in a tax haven or 3rd world country, 50k is 35k net. That's 3k a month. I don't know about you but it's kinda hard to live a decent life on 20k or less. So even if the guy makes 100% a year, he is going to compound at 20% maximum. And making 100% a year is pretty damn hard without huge risk or a rare trading edge. Even if you were that good, it's far better to get investor capital or a job at a fund and do it on 500k+, then you can make some real money, while drawing a salary that doesn't consign you to one rung above a burger flipper's salary.

Also, how is being single better? If you are married or cohabit, then your rent is halved, and someone else brings in income at basic tax rates. Unless you are dumb enough to shack up with someone who leeches off you and doesn't pay their own way.

when I opened my account at ib, it was worth 28k. The first year I figured, if I worked 40/hrs a week I made $8.20/hr

bout the only good thing was 60/40 split, no medicare ssi

 

[Ghost of Cutten]

Quote from BlueTurtle:

lol. so if I tried very hard to dunk a basketball for 2 hours a day, could I do it? are you saying the 90% of failed traders simply don't think hard enough, or long enough? of the ones that spend 10 hours a day staring at MACD....is that bad? should they stare at RSI?

so, yes....work smarter, harder!!!! haha. these treads are comical, since zero practical information.

now I tell my minions who only make 10k a day....listen, if you focus more, eat better, exercise more, you will make 100k a day!!!!

let's all cheer at once!!!!

I know one guy who wants to be a gold medalist at running. I say, run 1 mile today, 2 tomorrow...soon you will be the best!!!!

more cheering!!!!

Of course effort alone does not make one world class. But becoming financially independent does not require world class performance, it just requires top 20% - and most people can find SOME commercially viable field at which they have reasonable aptitude. Reasonable aptitude and huge effort, in the 1st world at least, will normally result in reasonable success.

Garachen's point is not that everyone who tries their best will become the next Buffett or Soros, but that almost everyone does *not* do anywhere near their best effort. Thus they fall well short of their full potential. This is totally true. Surely there is a middle ground of say 80% effort, without requiring total life sacrifice and obsession, which should result in most people's goal of a fairly satisfying life with financial prosperity.

 

[MAESTRO]

I once got to 500K account by starting with 3M

 

[Ghost of Cutten]

Quote from oldtime:

when I opened my account at ib, it was worth 28k. The first year I figured, if I worked 40/hrs a week I made $8.20/hr

bout the only good thing was 60/40 split, no medicare ssi

Yeah. Compounding 50k in efficient markets is incredibly difficult. if you can make 25% per annum with <20% drawdowns, that is world class hedge fund performance. Why pike on 50k when you can get a finance job, receive 100k+ risk free income while you prove yourself over 1-2 years, then trade 7 figure+ capital and scale quickly to big bucks, and make a fortune?

Only pike on small accounts if you are i) in a full-time job ii) have a fat edge that doesn't require lots of capital to trade (e.g. daytrading inefficient markets where you can make 500+ per day with moderate risk) iii) are completely unemployable for some reason, live in a very cheap country, and don't mind big swings and a good chance of blowing up eventually.