How much has been enough for you?

NoDoji · Mar 31, 2011

Quote from newguy05:

Is that a typo? How can you possibly make a living, nevermind decent one with 10k base? Even if you make a 100% gain and live in the middle of nowhere in one of those redneck states, it still won't be enough to cover living cost.

I trade crude oil futures (CL). I'm not sure exactly, but I believe you only need $5000 in your account to day trade 1 contract (maybe less).

Each day common price patterns offer at the very least 10 solid trading opportunities between 8:00am and 2:30pm eastern time. If 50% of these opportunities succeed and 50% fail and you average a .30 profit on the successful trades and a .20 loss on the failures, and you trade 1 contract, that means you're netting just under $500 a day after commissions.

That's a 6-figure annual income, which far as I can tell, pays the bills in most any state unless you're up to eyeballs in debt.

:eek:

volente_00 · Mar 31, 2011

Quote from heech:

To be honest, that hasn't really been a discussion point. With a nascent manager like myself, the question for a potential investor isn't whether I'm offering 0/30 or 2/20 ... but whether I'm:

What kind of track record would it take to charge 0/50 in a strictly managed futures fund ?

NoDoji · Mar 31, 2011

One more thing, in keeping with the topic of this thread:

If you're trading CL with a $5000 account and your first 5 trades of the of day fail and you're down $1000 (20% of your account), can you easily trade the next five setups according to your rules? Probably not. You're very likely to cut your winners short in an attempt to recover your losses or possibly you'll move your protective stop to break even right away to prevent more losses. A potentially profitable day can easily end up a losing day.

If you're trading with a $50,000 account and you're down $1000 (2% of your account), it may not be easy to trade the next 5 setups and manage them according to your rules, but it will be a LOT easier than with the $5000 account.

It's the mastery of the psychology of trading that makes or breaks a trader with an excellent trading edge and well-defined management strategies. If you're properly capitalized for the position size you're trading, it will be that much easier to follow your plan.

volente_00 · Mar 31, 2011

Quote from NoDoji:

One more thing, in keeping with the topic of this thread:

If you're trading CL with a $5000 account and your first 5 trades of the of day fail and you're down $1000 (20% of your account), can you easily trade the next five setups according to your rules? Probably not. You're very likely to cut your winners short in an attempt to recover your losses or possibly you'll move your protective stop to break even right away to prevent more losses. A potentially profitable day can easily end up a losing day.

If you're trading with a $50,000 account and you're down $1000 (2% of your account), it may not be easy to trade the next 5 setups and manage them according to your rules, but it will be a LOT easier than with the $5000 account.

It's the mastery of the psychology of trading that makes or breaks a trader with an excellent trading edge and well-defined management strategies. If you're properly capitalized for the position size you're trading, it will be that much easier to follow your plan.

That's why one should impose limits to protect themself from self destruction.

2 % risk per trade and 10% max daily drawdown is a good starting point.

Cache Landing · Apr 1, 2011

Quote from volente_00:

That's why one should impose limits to protect themself from self destruction.

2 % risk per trade and 10% max daily drawdown is a good starting point.

If you allow a 10% max DAILY drawdown, you had better have a really high sharpe ratio, or your account is gonna whip you all over the place.

newguy05 · Apr 1, 2011

Quote from NoDoji:

I trade crude oil futures (CL). I'm not sure exactly, but I believe you only need $5000 in your account to day trade 1 contract (maybe less).

Each day common price patterns offer at the very least 10 solid trading opportunities between 8:00am and 2:30pm eastern time. If 50% of these opportunities succeed and 50% fail and you average a .30 profit on the successful trades and a .20 loss on the failures, and you trade 1 contract, that means you're netting just under $500 a day after commissions.

That's a 6-figure annual income, which far as I can tell, pays the bills in most any state unless you're up to eyeballs in debt.

:eek:

My confusion wasnt about the ability to create an account and trade with 10k capital, but your expected return.

If you can average $500 a day trading 1-2 futures contracts as stated, that's a 1000%+ annual return.

Are you saying you are able to do this? Then yes you can comfortably live with a 10k trading capital in most states. Also I like to know where to send you my money

heech · Apr 1, 2011

Quote from newguy05:

My confusion wasnt about the ability to create an account and trade with 10k capital, but your expected return.

If you can average $500 a day trading 1-2 futures contracts as stated, that's a 1000%+ annual return.

Are you saying you are able to do this? Then yes you can comfortably live with a 10k trading capital in most states. Also I like to know where to send you my money

And why just 1-2 contracts? I've seen your trading on the CL thread, I have a hard time imagining you can't get filled on at least 10 cars at the price levels you're putting in your orders. Why not go for $5000 a day?

Gcapman · Apr 2, 2011

Because it's so much easier to psychologically handle that small amount of leverage....

I agree with nodoji....

However, that being said I am planning to continue my swing trading in currency and working for the duration of 2011....

I'm really looking forward to my 2012 New Year party!!

Might possibly be the best one of my life yet!!!

NoDoji · Apr 2, 2011

Quote from heech:

And why just 1-2 contracts? I've seen your trading on the CL thread, I have a hard time imagining you can't get filled on at least 10 cars at the price levels you're putting in your orders. Why not go for $5000 a day?

I've traded as many as 6 cars, but my trade management goes right out the window. I move stops too quickly, cut winners. Scaling into winners I don't manage the trade optimally either. Rationally, I know that nothing technically is different with more size on, but I'm different.

As of yesterday, I've only been trading CL live for one year (and day day trading in general less than 3 years), so I've plenty of time to build up a cash cushion and size up comfortably as the account grows.

Finally, and this is a key consideration for me because I trade for a living, I trade size that protects me from risk of ruin. If I trade 1-2 contracts and for any reason something goes wrong (system freezes before I get a stop put in and there's a news driven price move into a limit up/limit down level), I'm around to trade another day. If that were to happen with 5-10 cars, game over.

OldDickson · Apr 2, 2011

Quote from NoDoji:

One more thing, in keeping with the topic of this thread:

If you're trading CL with a $5000 account and your first 5 trades of the of day fail and you're down $1000 (20% of your account), can you easily trade the next five setups according to your rules? Probably not. You're very likely to cut your winners short in an attempt to recover your losses or possibly you'll move your protective stop to break even right away to prevent more losses. A potentially profitable day can easily end up a losing day.

If you're trading with a $50,000 account and you're down $1000 (2% of your account), it may not be easy to trade the next 5 setups and manage them according to your rules, but it will be a LOT easier than with the $5000 account.

It's the mastery of the psychology of trading that makes or breaks a trader with an excellent trading edge and well-defined management strategies. If you're properly capitalized for the position size you're trading, it will be that much easier to follow your plan.

Here is an example of sequential frustrating trades not getting in the way of taking the 'next trade' - which in this case turned into a giant winner.

http://www.youtube.com/watch?v=8EfH1jgSipQ

He started with 50k and is well into the six figure realm now, just showing up every day and being prepared.