How much do you need to realistically make it?

Quote from Grob109:

Take a look at the minimum you can make a year on one contrect of ES.

One tick a day for 240 days is 3,000 dollars. This is 240 ticks which when divieds by 4 is 60 points. 60 points @ 50 dollars a point is 3,000.

Two ticks a day is 6,000 dollars a year. or if you make 1 tick a day it is 6,000 dollars a year.

Let say you get up to a few contracts and make a few ticks.

3, 4, 5, or 6, contracts at 1 tick a day for 240 days are, respectively: 9,000 ,12000, 15,000 and 18,000.

Step it up to 2 ticks a day: 18,000, 24,000, 30,000 and 36,000

Go for 3 ticks a day: 27,000, 36,000, 45,000 and 54,000.

And, now the long term average of ET @ 4 ticks a day: 36,000, 48,000, 60,000 and 72,000.

I forgot to mention the capital involved. 1 contract is 2,000. 3 is 6,000; 4 is 8,000; 5 is 10,000 and 6 is 12,000. This is just typical.


Nitro is a classic example in ET

He says he makes 50,000 a year and recommends that any person start with a minimum of 50,000 dollars. He may be trading something like the ES.

He feels that if he is really on the ball he can stretch the 50K earnings to 100K (he is then really hitting the edge well).

So he has 4 times the capital needed to be on margin for 6 contracts and he is pulling down what 6 contracts make if he makes, consistently, 2 ticks a day for 240 days of the year. To make money with 6 contacts, the minimum you could make and make money every day would be 24,000 bucks. He does twice as well as the minimum using 4 times the capital required to make the minimum.

We know he doesn't make money consistently (he tells us that a lot) and he doesn't make much money as yet as he is still, as he says, improving every year.

What would happen if a person looked at what the market offers daily?

A person would find out that the market offers quite a lot of money to the public day after day.

No one automatically has a right to that money.

Lets say a person comes up with a strategy to draw a line through the market at the most frequently traded value the previous day. He could do this on any chart he wanted BUT lets use a NITRO chart instead.

He enters on this value and does a NITRO. That is he starts to trade with only one contract and he exits when he has made two ticks. He only enters when the price is approaching the value from one side going to the other. This is the Nitro direction determiner; he goes with the Nitro flow only. The exit is always 2 ticks past the entrance. This is aNITRO LONG TERM DAILY AVERAGE PROFIT trade.

The NITRO trader must do this each time he can during the day and he goes both ways. He does it until he makes 2,000 dollars (80 trades) and then he has to trade 2 contracts until he makes another 2,000 dollars (40 trades) at which point he trades 3 contracts. He trades three contracts for 27 trades, then 4 contracts for 20 trades, then 5 contracts for 16 trades and finally 6 contracts for 13 trades.

At the end of this he is a FULL NITRO and cannot do it anymore.

Then he has to get an edge that is like the one NITRO spend his life so far developing and using. This is an effort that will take about 200 crossings of the most frequently occurring price that happened the day before. How many days will it take to get this job done? That is how many days will it take to duplicate NITRO's current annual performance where he uses 50,000 dollars minimum to preform in a year?

If the line is crossed once a day it will take 200 days. If it is crossed twice a day then it will take 100 days If it is crossed the times a day it will take 67 days. If it is crossed 4 times it will take 50 days. If it is crossed 5 times it will take 40 days (Noah took a trip where it rained this number of days. If it is crossed 6 times, it will take 34 days. If it is crossed 7 times it will take 29 days. If it crosses 8 times it will take 25 days. If it is crossed 9 times it will take a month (23 days).

For those who can see that this kind of edge is kanda simple (are there any simpler ones?), then you may want to be a little creative to use others.

The one I like is this: get in the market on the right side of the market and stay on the right side by doing reversals over and over always keeping time with the market's reversals. You get an "unbelievable" amount of ticks per day per contract on a very small amount of capital being at risk, relatively speaking. And there are 20 to 40 actions per day. This is called SCT trading.
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STOP THE PRESSES.......STOP THE PRESSES.....BREAKING NEWS........BREAKING NEWS!

GROB has made a post that everyone can read AND understand. ET History has been made today.

It now begs the question....is grob turning over a new leaf? Is this a new pardigm in teaching...one where grob actually tries to communicate in a way that facilitates learning?

Stay tuned folks! More to come.......
 
I agree with everything you said except when you say that these trades come along two to three trades a year that give you a "big" edge: I think they come once a month.

In fact, when the trade that comes along where the market is giving up so much edge that it happens only 2 or 3 times a year, you are very likely in the hole. Since these huge edge trades rarely happen overnight when you are not trading and you wake up and it christmass because the market is giving so much edge, and you were lucky to not take all the edges in between because you were sleeping. If this happened intraday, you are probably stuck with a loser, since you very likely got in when the edge was just 2 Std Dev event, and it is now 3 or 6 (or gawd forbid higher than that, especially on a gap, although gaps are extremely rare in SIFs intraday). Unless you can predict days like that, you are often on the wrong side of them.

However, the rest of your post is spot on.

nitro
Quote from Spooz Top:

i feel the same way regarding size,IMO,.....there are going to be 2 to 3 all in trades per year,it is up to us #1. to recognize it in the making.....#2.to act upon it with complete conviction,which is the hard part.missing one of these trades can make me sick for days......these are the trades that put us above & beyond for the year & turns a mediocre year into a potentially great one......& forget about waiting for a wire transfer to hit your acct....that opportunity will be a vapor trail.as soros has stated,when you are right,you can`t have enough of it & that`s what makes him the superstar that he is,goes for the jugular when it presents itself.....michael marcus uttered the same in wizards....small loss,small loss,a breakeven then double your money.
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Nitro, I was thinking the exact-same thing to myself. Roughly 2 -3 times per month we get one of those big-trend sessions. The morning starts on a gap & go or gap & fail. Price action hangs sideways all day long, then goes vertical from 2:00pm est into the close.

If we spot these events and pile on the contracts into afternoon surge, it is possible to trade 3x or 4x normal contract size BUT keep max risk to capital at 1x normal percent. The tradeoff is risking unrealized gains on first contracts itm while wagering added positions will lever into a big win.

I myself don't try that often, but when an afternoon surge move appears imminent, it's prime opportunity to earn a week's / month's wages in a single session without taking on too much risk.
 
Your observation skills are keen. Gap and fail happens more often on the small gaps than the big gaps. I normally get crushed on those big gap days, but unless the market does what it did in May of this year where it went on to lose 8% more after giving up huge edges, I end up either breaking even on the trades, or making a little money. In May '06 I dropped $12k in a week trading SIFs. It happens...

nitro
Quote from austinp:

Nitro, I was thinking the exact-same thing to myself. Roughly 2 -3 times per month we get one of those big-trend sessions. The morning starts on a gap & go or gap & fail. Price action hangs sideways all day long, then goes vertical from 2:00pm est into the close.

If we spot these events and pile on the contracts into afternoon surge, it is possible to trade 3x or 4x normal contract size BUT keep max risk to capital at 1x normal percent. The tradeoff is risking unrealized gains on first contracts itm while wagering added positions will lever into a big win.

I myself don't try that often, but when an afternoon surge move appears imminent, it's prime opportunity to earn a week's / month's wages in a single session without taking on too much risk.
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Grob, I tend to sweep out monthly gains above $20k in my futures account. With that I readily trade 10 - 20 ER contracts and 20 - 30 ES contracts, keeping max loss per entire open trade at -$1,000 to start. I keep max risk at 5% of current account balance, scaling up trade size thru the month as balance permits.

That is done by entering one symbol or the other as signals generate, then moving stops (when possible) on the first trade to lessen risk as the second position is open.

Once capital rises to $30k, $40k or wherever, trade size increases accordingly. If the account would slip to what I feel is low, funds are easily added.

Right now my working capital available in personal emini account going into Tuesday is $20.8K. I expect to make $20k to $50k this month in that account, if normal to large range days present such opportunity, we'll see. An average of $2,000 daily on 20-lot ER / ES is normal, blended average over the course of an entire month.

The way I trade by scaling into two different symbols = trailed stops allows for much greater leverage with nominal risk to realized capital than straight entry/exit on a single symbol. When volume & volatility return to normal, I'll trade bigger size in the ES and therefore leave more working capital in the account. Until then, I put excess capital to "work" buying raw land - timber properties in my area.
 
Nitro, in May I had three of my best emini sessions ever. Two were $20k days, using 10-lots size. Eminis and stocks do trade differently, of course.

The setups I relish most are either gap & go moves that run parabolic up or down past 2:00pm EST, or gap & fail moves that make the same big afternoon moves.

We should see two - three of those sessions this month, quite possibly this week. Futures rollover week tends to have at least one outsize session, and the past three sessions of 5pt to 7pt total ES range have markets coiled & prime for a directional burst.
 
I suspect that we are making markets for each other, and when the big ones comes you make much of your money from me :D

Interesting rollover point: I have never done that test.

nitro
Quote from austinp:

Nitro, in May I had three of my best emini sessions ever. Two were $20k days, using 10-lots size. Eminis and stocks do trade differently, of course.

The setups I relish most are either gap & go moves that run parabolic up or down past 2:00pm EST, or gap & fail moves that make the same big afternoon moves.

We should see two - three of those sessions this month, quite possibly this week. Futures rollover week tends to have at least one outsize session, and the past three sessions of 5pt to 7pt total ES range have markets coiled & prime for a directional burst.
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For whatever reason, emini rollover week tends to have at least one outsized directional day. That coupled with last week's total range constipation has us primed for a big move. I believe the S&P has held a 16pt total range for past three trading weeks... something's about to give, big-time.
 
most ET traders are very smart and average time to profitability is quick, maybe 3-6 months before their profitable - i'm a slow learner - so far i've spent over 350K in 4 years (trading and living expenses) and i still have a long way to go - my biggest mistake was thinking i would be ringing the register in 2-3 years... :)
 
Quote from stockgirl:

most ET traders are very smart and average time to profitability is quick, maybe 3-6 months before their profitable - i'm a slow learner - so far i've spent over 350K in 4 years (trading and living expenses) and i still have a long way to go - my biggest mistake was thinking i would be ringing the register in 2-3 years... :)
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Most ET'rs are where you are at. Wanting to make money, but not doing so. Trading is a tough business, it doesn't suffer fools!
And at the same time, it is also very easy.

You have spent 350 k in four years...and you are not profitable yet?

That is insane, it's not the correct way to approach trading.

The correct way, pick a market, then research, develop a strategy/edge, and then watch it in real time going forward for a period of time. Then you begin to execute the strategy with the smallest size possible, only when you are making money should you increase the size and risk. No trader should ever spend more than 25k on their learning curve. Ever!

I wish you luck...but it appears to me that you are just gambling.
Please, stop what you're doing and reevalute things.
 
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