I was asking because I found that trading with scared money prevents you from taking the risks necessary for making it big.
How many people here actually make a living?
- Thread starter Crimson
- Start date
At least 6 or 7 digits every year for both. Im more of a swing trader or investor than most here, I think.
Buy panic, sell glee.
Buy panic, sell glee.
Why not manage other people's money, indeed.
Have you ever owned rental properties or run any kind of business that serves the public? There are inevitable a few people who try to get something for nothing, or get pissed at you about things you have no control over, or pretend they fell on something on your premises and got hurt, or sue you, etc.
There are only so many things you can protect yourself from by running a friendly, honest business and buying insurance. While insurance may keep you from going broke, it does not relieve you of the obligation to spend your precious time responding to these claims, no matter how ridiculous some of them might be. Even if you are right, and everyone else, including the other side, knows at heart that you are right, you still have to get lawyers and deal with these little messes. And some scammer always manages to think of a scam that never would have occurred to you in a million years.
In short, running any type of business entails a bunch of unknown unknowns. So the fact that someone has not set up a business to trade for other people proves nothing about their ability to trade.
Have you ever owned rental properties or run any kind of business that serves the public? There are inevitable a few people who try to get something for nothing, or get pissed at you about things you have no control over, or pretend they fell on something on your premises and got hurt, or sue you, etc.
There are only so many things you can protect yourself from by running a friendly, honest business and buying insurance. While insurance may keep you from going broke, it does not relieve you of the obligation to spend your precious time responding to these claims, no matter how ridiculous some of them might be. Even if you are right, and everyone else, including the other side, knows at heart that you are right, you still have to get lawyers and deal with these little messes. And some scammer always manages to think of a scam that never would have occurred to you in a million years.
In short, running any type of business entails a bunch of unknown unknowns. So the fact that someone has not set up a business to trade for other people proves nothing about their ability to trade.
Well I guess you can define scared money reactions in 2 ways -
Positive - Keeping your position size smaller than your systems asks you to have
Negative - Moving stop loss closer before system does and getting out before the system asks you to. If you do that, you can die death by 1000 cuts I suppose.
I am susceptible to both..But I guess somehow still able to get positive returns.
You ask a very good question - perhaps the most valid of all trading questions. Don't let any of the rude responses get to you. It's natural to receive them when asking this question. I have received numerous rude responses when asking the question of what is a reasonable return on your account from day trading.
The answer to your question is very few make a living. I have spoken to some very good traders about this exact issue. They have told me that they believe less than 3% make any kind of solid return day trading, and they believe the actual percentage is closer to 1%.
I can share with you my experience. I have been day trading for 10 months. I have worked at it for 10 hours per day. I was profitable from the very first week. My return is 42% on an annualized basis, on a 170 unit bank of capital. I risk 1 unit per trade or .0060% per trade. My worst losing month is -1.67 units.
Some think this is great. I think it sort of stinks. Here is why. I used to work a very high paying job - paying well over 300,000 per year. To make that with my 42% return I need to put up a bankroll of $715,000. If I have just been lucky, or at least go through an unforeseen period of a 10% drawdown, then I am in the hole $70,000 and I have put in a lot of time in this endeavor and taken away a lot of time from pursuing my hi paying career. In addition, the edge is so small, that even though I am up and have won 8 our of my 12 months, it never feels like I can count on this to last the next 10 to 20 years. So I contantly question whether I should do this or go back to work.
Now, if someone only has $100,000 and they make 42%, then they are only making $42,000 per year. After taxes it's much lower. If they live on it, then they can never really build their bank high enough to make a great living at it. This is why one person responded to you by saying that this is really for those who are already wealthy.
The excellent traders I spoke with did tell me that they believed the great day traders make about 100% per year on their accounts when risking .5 to .6% per trade as I do. You can run the numbers and double the return if you risk 1% but your drawdowns and blood pressure will be much higher.
This is a very tough business. Anyone who really makes it work is very unlikely to share their methods with you or anyone else because it is so hard to gain an edge over everyone else. I do agree with the traders that I spoke with - I think the people who make good money in this field are about 1% to 2% of all traders, and rare is the trader who makes more than 100% per year using my type of money management (i.e. .5 to .6 units of a 170 unit bankroll per trade).
I hope that helps.
The answer to your question is very few make a living. I have spoken to some very good traders about this exact issue. They have told me that they believe less than 3% make any kind of solid return day trading, and they believe the actual percentage is closer to 1%.
I can share with you my experience. I have been day trading for 10 months. I have worked at it for 10 hours per day. I was profitable from the very first week. My return is 42% on an annualized basis, on a 170 unit bank of capital. I risk 1 unit per trade or .0060% per trade. My worst losing month is -1.67 units.
Some think this is great. I think it sort of stinks. Here is why. I used to work a very high paying job - paying well over 300,000 per year. To make that with my 42% return I need to put up a bankroll of $715,000. If I have just been lucky, or at least go through an unforeseen period of a 10% drawdown, then I am in the hole $70,000 and I have put in a lot of time in this endeavor and taken away a lot of time from pursuing my hi paying career. In addition, the edge is so small, that even though I am up and have won 8 our of my 12 months, it never feels like I can count on this to last the next 10 to 20 years. So I contantly question whether I should do this or go back to work.
Now, if someone only has $100,000 and they make 42%, then they are only making $42,000 per year. After taxes it's much lower. If they live on it, then they can never really build their bank high enough to make a great living at it. This is why one person responded to you by saying that this is really for those who are already wealthy.
The excellent traders I spoke with did tell me that they believed the great day traders make about 100% per year on their accounts when risking .5 to .6% per trade as I do. You can run the numbers and double the return if you risk 1% but your drawdowns and blood pressure will be much higher.
This is a very tough business. Anyone who really makes it work is very unlikely to share their methods with you or anyone else because it is so hard to gain an edge over everyone else. I do agree with the traders that I spoke with - I think the people who make good money in this field are about 1% to 2% of all traders, and rare is the trader who makes more than 100% per year using my type of money management (i.e. .5 to .6 units of a 170 unit bankroll per trade).
I hope that helps.
P.S.
I meant that I have been profitable for 8 of the 10 months that I have day traded, not 8 of 12. I gave you my annualized return of 42% because I have averaged 3.5% per month during my 10 months which is a 42% annualized rate of return.
I think any trader who is going to teach you anything and claims to be successful, should be willing to give you figures like these so you can determine if you are willing to pay their teaching fees once you are willing to make the assumption that they can teach you to get returns similar to their returns. Otherwise, you are just paying people thousands of dollars and cannot possibly know what you are purchasing.
I meant that I have been profitable for 8 of the 10 months that I have day traded, not 8 of 12. I gave you my annualized return of 42% because I have averaged 3.5% per month during my 10 months which is a 42% annualized rate of return.
I think any trader who is going to teach you anything and claims to be successful, should be willing to give you figures like these so you can determine if you are willing to pay their teaching fees once you are willing to make the assumption that they can teach you to get returns similar to their returns. Otherwise, you are just paying people thousands of dollars and cannot possibly know what you are purchasing.
Heh, this story very similar to my start. profitable from w1 but at the end foud it was easier to get back to well paid contracting. especially with 2 kids and bills relentlesly coming... It was relief working again, at least first couple of weeks...
then was 1 yr work 1/2 year trading, 1year work.... I improved and now have enough money and freedom to strike for "trading from yacht" scenario.
still working right now but plans are ready...