One last point - it IS possible to grow 50k into 500k in normal liquid markets. You just have to be extremely fucking talented, hard working, have extraordinarily good trading strategies, and be somewhat lucky. So for 99% of people that is not an option. If you are that good just go to a fund or trading firm and make more money a lot quicker with less risk.
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How did you grow your account into a big one?
- Thread starter careless
- Start date
25% no probQuote from Ghost of Cutten:
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 blowing up eventually.
less than 20% drawdown big prob
no one in their right mind would hire me to do anything
I can't even get a job at the local c store which is just 50 feet from my front door. Beleive me, I tried. They won't hire me because I worked for them when I was only making $8.20/hr trading ES. Which put me up to about $15/hr, and back then, out where I lived, that was a decent living (if you were careful.)
After a year I was making about $420/day scalping ES, so I gave them a two weeks notice. Now, they will never hire me back again. (Company Policy)
Too bad, because it would be really great to have an extra $200/week and a little stability in my life
oh well, compounding seems to work better for me long term in mutual funds rather than trading
I sweep 50% over and above what I think is a decent trading account each month
gives me a check each month, kind of stable
although in 2013 those checks have been getting smaller and smaller
kind of a bitch when you work all day at trading, and then at night you check your account at Vanguard and it's "Shit man, I made more money over there today doing absolutely nothing!"
I think Cutten's point is very accurate. Once you learn what you are doing, in almost all cases it makes sense to develop a customer business or market your record to trade for a fund, etc.
At some point most everyone needs to add business sense to trading sense - in other words look at the risk reward for the entire endeavor and not just a trade or strategy.
At some point most everyone needs to add business sense to trading sense - in other words look at the risk reward for the entire endeavor and not just a trade or strategy.
maybe so, but if I was going to do that, I would just open a restaurant, or a car repair placeQuote from MrN:
I think Cutten's point is very accurate. Once you learn what you are doing, in almost all cases it makes sense to develop a customer business or market your record to trade for a fund, etc.
At some point most everyone needs to add business sense to trading sense - in other words look at the risk reward for the entire endeavor and not just a trade or strategy.
"once you learn what you are doing"?
man, this is trading, it isn't business 101
I use to think the number one reason for failure was undercapitalization
but after spending some time on ET I am beginning to think it is "Gullability."
I can't believe the kind of bullshit people take as the gospel truth
when they say, "95%" fail, they are not talking about people like you and me
They are talking about the 95% who will believe any kind of bullshit you present to them
and so yes, you could conceivably build up your account by selling to them
especially if you can convince them "You know what you are doing."
but after spending some time on ET I am beginning to think it is "Gullability."
I can't believe the kind of bullshit people take as the gospel truth
when they say, "95%" fail, they are not talking about people like you and me
They are talking about the 95% who will believe any kind of bullshit you present to them
and so yes, you could conceivably build up your account by selling to them
especially if you can convince them "You know what you are doing."
Quote from oldtime:
maybe so, but if I was going to do that, I would just open a restaurant, or a car repair place
"once you learn what you are doing"?
man, this is trading, it isn't business 101
To clarify, My comment was within the context of the comment I was responding to, It was not meant to be taken to mean, "learning what you are doing" is an inevitability.
Here is a strategy that I have used.
Basically, view a certain amount of your accumulated gains as open equity, and trade much more aggressively with this capital than with your base capital. Then periodically (quarter, month) rebook the "open equity" and account for it as base equity.
Basically you want to use your accumulated gains to move your bet size closer to the theoretical ideal, which in real life is usually to aggressive to sustain.
This is exactly what most trend systems that define initial risk do. They might say they risk .5% of capital on a trade, but this is only because they are not looking at open equity daily to define % risk. Once in a trade that is up money, they are much more aggressive in terms of what they are risking.
The approach I outlined above is a way short term traders can get this same aggressiveness while still protecting what I call "core equity". A trend follower naturally does this when they exit a trade and then re-size risking only a small %. As a short term trader, you can do this yourself based on your own criteria.
Basically, view a certain amount of your accumulated gains as open equity, and trade much more aggressively with this capital than with your base capital. Then periodically (quarter, month) rebook the "open equity" and account for it as base equity.
Basically you want to use your accumulated gains to move your bet size closer to the theoretical ideal, which in real life is usually to aggressive to sustain.
This is exactly what most trend systems that define initial risk do. They might say they risk .5% of capital on a trade, but this is only because they are not looking at open equity daily to define % risk. Once in a trade that is up money, they are much more aggressive in terms of what they are risking.
The approach I outlined above is a way short term traders can get this same aggressiveness while still protecting what I call "core equity". A trend follower naturally does this when they exit a trade and then re-size risking only a small %. As a short term trader, you can do this yourself based on your own criteria.