I've been day-trading for 35 years, and that has been my sole income. All bullshit aside, I don't even approach an average of 80% per year, and I'm very good. I suspect you don't either. Incidentally, I also trade a couple million bushels of grain at a whack, and my default size for ES is 100 contracts which is neither here nor there. However, this is a message board, and everyone here is an aced out trader who makes 80% a year on their money. I don't think you are honest, but that's just an opinion of someone who really trades and has been since 1973.
How much capital do you typically need as a trader to live on your own?
- Thread starter Lethn
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Not sure why my honesty is called into question, I didn't claim anything on my own behalf. I'm trying to get where other traders I know already are. I had a very good year last year, but it wasn't 80% . . . so I'm realistic I believe - didn't realize how crazy I apparently am
. This isn't about me anyway. This is about what kind of performance do you need to make all this worth the effort.
You make $50k with a $50k account, but say you can leverage up with access to $500k. Was that a 100% return, 10% return or somewhere in between that's transaction-based. A number who I know make "80%" are using leverage, so in all fairness, it's not the equivalent of a mutual fund 80% return.
If you can swing 100 cars, then you must have a sizeable account. And maybe your goal is to earn a modest % return that provides you an appropriate standard of living. I'm not sure we're saying much different. But I have no clue why you, an experienced trader, would even so much as think for a second that a $30mil job awaits those who have found edges that hedge funds can't tap into because of size/liquidity issues. You'll have to explain that one a bit more.
Good trading.
Quote from JScott:
Not sure why my honesty is called into question, I didn't claim anything on my own behalf. I'm trying to get where other traders I know already are. I had a very good year last year, but it wasn't 80% . . . so I'm realistic I believe - didn't realize how crazy I apparently am
This isn't about me anyway. This is about what kind of performance do you need to make all this worth the effort.
You make $50k with a $50k account, but say you can leverage up with access to $500k. Was that a 100% return, 10% return or somewhere in between that's transaction-based. A number who I know make "80%" are using leverage, so in all fairness, it's not the equivalent of a mutual fund 80% return.
If you can swing 100 cars, then you must have a sizeable account. And maybe your goal is to earn a modest % return that provides you an appropriate standard of living. I'm not sure we're saying much different. But I have no clue why you, an experienced trader, would even so much as think for a second that a $30mil job awaits those who have found edges that hedge funds can't tap into because of size/liquidity issues. You'll have to explain that one a bit more.
Good trading.
But you don't even mention losses. Surely, you have a losing day or two. Also, if you believe everything your trader buddies tell you, I have some swampland in Florida I would like to show to you. Bottom line, it you make 80% return in anything annualized, the players will find you and shove money down your throat. Or else, if you're that good, your broker will front run you and eliminate your edge.....I've seen all this happen. I'm sure that you mean well, but when you get 30 years under your belt, then we'll talk. I swear, I should only discuss markets with fellow exchange members. At least the lies are for a purpose rather than for an impression.
Sure you can live frugal when you start full-time trading.
But if you were really serious you would start being frugal when you still have a job. You would be frugal every year that you have had a job. You would be frugal as a way of live, to attain the dream of trading for living AKA becoming filthy rich. It doesn't matter if one year you lose 20%, but spend 40 hours a week daytrading, because the bear market changed to bull market and VIX below 10. It's the freedom that counts.
If many trading strategies don't acquire attention during market hours you can still keep your job. Quitting a job to do more effectively investing, long-term trading makes no sense.
It was not a choice, but necessity. If you didn't spend 8 hours a day developing a strategy you wouldn't have made money.
It's true theres no set rule to quit your job to quit trading. But living frugal is a way of life that is not exclusive to the type of trading you do. Living frugal can be done by everybody, even ones with a job. And even they can become wealthy by living frugal.
Working is only stupid if you want to trade for freedom, and do it as fast as possible. But I don't think you realize it's a whole different type of freedom then you think it is. Everybody can reduce their expenditure if they wanted to.
From reading this thread, I'd like to suggest the book (audio also available), "The Millionaire Next Door". Granted, it is dated 1996, pre-tech-bubble, but the principles are the same. The reason why I mention this here on this thread is because it claims through interviews that frugality is the secret to everlasting wealth. And, in some of the interview sessions, many of the millionaires are amazed to discover that they aren't actually "wealthy". It's a good read that I think some of you might enjoy, an for those of you that are cheapskates like me, you can get it at the library!
First of all, the whole 30 years thing is silly. I held senior and executive positions in my industry in my pre-trading days. I was no smarter in year 20 than year 10. Everything changed. If you're good, you're good. 20 or 30 years merely suggests you have the intestinal fortitude to do the same thing for that long . . . or you love it.
My world of trading "buddies" only has a brief history and a much smaller sampling than yours . . . I get it. So, if they are lying to me, can you please offer up the typical profile of a "successful" trader that is familiar to you? I think many reading this journal would appreciate additional insight.
Are they trading a $1mil account trying to get 10-15% . . . are they trading a $250k account trying to get 40%. Is it all their money? Do they have "backers"? Mostly net long/short traders? Spreads?
How about some specific answers to the OP's question?
JS
Not if the strategy wasn't scalable. I suspect the guy was talking about non-compound returns.
Would you maintain your claim even for small accounts? For example, do you think it's impossible for someone to run a 5k account up for 5 years and beat an annualised compound return of 80%?
Scott, you can say that my 30 years of experience is silly and that your previous experience means alot, but it doesn't mean squat. You obviously don't have a clue, but you're a newbie so I won't beat you up.
I could give you the profile of a successful trader, but I don't think you'd get it.