How much should a "good" trader earn?

OK will admit i did not write it clearly as I would have liked. I am saying that after taxes and retirement saving eat up 50-60% of your gross there are other things we have as traders that many dont have as wage earners.

Wage earners are not growing a business for the most part. I try to grow my account at least 20% a year or better after expenses and such. I wanted only to say that someone making 50k a year and spending it all (after taxes ) is not doing that.

I was simply comparing the lifestyle of a trader building a business and a working stiff spending their money.

Kind of silly I guess after I looked at it, sometime things sound better in your head than they appear on paper. LOL.

I just know that I make more money than most of my friends yet we live the same lifestyle because of what I am trying to accomplish.

AllenZ
 
Quote from spyderman:




Actually it has been my experience that traders themselves feel inadequate for making a a measly $200k, not the "ignorant masses". I personally don't know anyone in the outside world who would think $200k is a failure ESPECIALLY for someone working for themselves whenever or wherever they want, and only using $50 or $100k in capital!

Mostly I hear traders (specially the newbies, or some prop managers) who say $200k in coin is nothing! Granted.....there is that animal with the hands of stone who can press and has the confidence to make the really big numbers. But take it when you can....cause that doesnt last forever!

Trade because you love it, not cause of the bucks you can make. Be prepared to evolve with the market and not so entrenched with easy money fads....bullets....internet hypermania, etc.....sure ride those damn waves but don't be a one race pony.
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Excellent post.

I think part of it is because people get used to the money so quickly. If you've made 400k for 3 years in a row, then 150k would feel like a failure, even though objectively it's a very nice income.
 
Quote from Cutten:



Excellent post.

I think part of it is because people get used to the money so quickly. If you've made 400k for 3 years in a row, then 150k would feel like a failure, even though objectively it's a very nice income.
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This is why numbers and dollars do not correlate.

Choose to think in numbers.

Meanings from just a few of the important words below take on a new meaning, make them your own:
  • velocity
  • time
  • waves


Michael B.
 
Question 1: How much DO the top traders make? I know someone who sat on a desk next to Marty Schwartz (of the book "Pit bull"). Marty made between 2 and 5 million dollars per year over more than 20 years, trading his own account.

Question 2: How much do you want to risk? Marty put on routinely positions of 200 ES without blinking an eye. A base rule is that for every dollar you risk per trade, you can make $100 per year if you know what you are doing. So if you want to make 1 Million per year, you need to risk 10 k per trade.
What does that mean? Assuming that you do not risk more than 3% of your equity per trade (quite high), you need about a $300 k accoount to make one million dollars per year. This, in my experience, is quite doable even with a larger account. Of course there is a limit somewhere: Marty did not go on to make a billion a year. But then, why would you need to?
 
Quote from axeman:

Only problem is, that nice 200K home in a decent neighborhood
costs $1 million in southern california :)

So it's all relative. I NEED to be a millionaire to have the
equivalent of what other people can have in other
parts of the country.

Some may say MOVE. But I just love it here.

200K would buy you a 500 square foot falling apart
piece of shit in the hood here :)


peace

axeman
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Amen, but its the price we pay. I have a friend who just bought a real nice brand new house in Tulsa for $189,000. For that price in San Diego, if I am lucky I can get a 30 year old 475 sq. ft. studio in a "decent" neighborhood.
But when taking into account Tulsa and San Diego...its a no brainer. We just need to make more money.
 
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