How Realistic? $50k account, $500 / day
- Thread starter AFChao
- Start date
when I started out, 24K was considered a "realisitc" account to trade beans and grains on the CBOT, and 32k was considered "realistic" to trade cattle and hogs on the merc to make a decent living.
Not much has changed since then other than nobody trades cattle and hogs anymore and the definition of a "decent" living.
And I gurandamntee you, it wasn't $500 a day.
Not much has changed since then other than nobody trades cattle and hogs anymore and the definition of a "decent" living.
And I gurandamntee you, it wasn't $500 a day.
You can do this in illiquid markets, if you fully understand market mechanics.
You need to find markets with no MM's participating where spreads are quite wide.
The SETs platform on the LSE with direct market access is a good example.
There are dozens of illiquid markets with large spreads where the arrival rates of market orders are too slow for market makers to bother with.
If you are prepared to spend all day testing the liquidity at touch of both the bid and the ask by demanding quote at best orders. You will come to learn that sometimes the liquidity at touch is fairly balanced and sometimes there is a significant imbalance.
When you find such and imbalance you can trade it.
When it is difficult to buy, you buy.
When it is difficult to sell, you short.
You should also set up some software to measure the arrival rate of buy market orders (BMO's) and Sell Market Orders (SMO's), as an imbalance of arrival rates has the same effect as an imbalance of liquidity, although arrival rate imbalances are less stable and less predictable than liquidity imbalances.
You can easily find 2 or 3 moves a day of 2 or 3 % each. The only limit is that you will not always get the full $50,000 of you account into these trades.
By definition there is limited liquidity available to take advantage of such opportunites, which is the main reason why the major institutions do not bother with them.
What you are effectively doing here is front running large buyers/sellers who are attempting to allocate large sums of capital into illiquid assets and suffering price impact as a result. That price impact is your return.
As a small time private trader such opportunities are your bread and butter.
NB this method will not work on SPX or AAPL or XOM, those markets are too large and too fast for you to ever get a stable quote at best.
You need slow and illiquid markets.
$500/day? Very easy. You can probably do it with $25-30k.
But there will be times when you run into trouble.
Ignore the dozens of people here who claim only the best in the world can achieve such a return as 1%/day. That's BS.
The smaller you are the greater return you can achieve. But then you don't stay small for long.
More money, more problems.
As you get larger and larger your yield drops and drops as only oppoprtunities with ever greater liquidity are worth your while and competition for such opportunites is extremely fierce.
The problems of money management and price impact are very rarely discussed in public because those who suffer these problems know that giving them air time is an invitation for an army of small time traders to try and steal their liquidity, thus exacerbating the problem.
You need to find markets with no MM's participating where spreads are quite wide.
The SETs platform on the LSE with direct market access is a good example.
There are dozens of illiquid markets with large spreads where the arrival rates of market orders are too slow for market makers to bother with.
If you are prepared to spend all day testing the liquidity at touch of both the bid and the ask by demanding quote at best orders. You will come to learn that sometimes the liquidity at touch is fairly balanced and sometimes there is a significant imbalance.
When you find such and imbalance you can trade it.
When it is difficult to buy, you buy.
When it is difficult to sell, you short.
You should also set up some software to measure the arrival rate of buy market orders (BMO's) and Sell Market Orders (SMO's), as an imbalance of arrival rates has the same effect as an imbalance of liquidity, although arrival rate imbalances are less stable and less predictable than liquidity imbalances.
You can easily find 2 or 3 moves a day of 2 or 3 % each. The only limit is that you will not always get the full $50,000 of you account into these trades.
By definition there is limited liquidity available to take advantage of such opportunites, which is the main reason why the major institutions do not bother with them.
What you are effectively doing here is front running large buyers/sellers who are attempting to allocate large sums of capital into illiquid assets and suffering price impact as a result. That price impact is your return.
As a small time private trader such opportunities are your bread and butter.
NB this method will not work on SPX or AAPL or XOM, those markets are too large and too fast for you to ever get a stable quote at best.
You need slow and illiquid markets.
$500/day? Very easy. You can probably do it with $25-30k.
But there will be times when you run into trouble.
Ignore the dozens of people here who claim only the best in the world can achieve such a return as 1%/day. That's BS.
The smaller you are the greater return you can achieve. But then you don't stay small for long.
More money, more problems.
As you get larger and larger your yield drops and drops as only oppoprtunities with ever greater liquidity are worth your while and competition for such opportunites is extremely fierce.
The problems of money management and price impact are very rarely discussed in public because those who suffer these problems know that giving them air time is an invitation for an army of small time traders to try and steal their liquidity, thus exacerbating the problem.
I agree completely...
I must review this thread once again...
Fellah's you are taking a lot of my time up today...whats up?
ES
http://www.elitetrader.com/conduct_rules.cfm
P.S. Can you folks please help me out here and hit the complain button when there is a breach of conduct rules...Thanks. I tried to read all of these pages again...I scanned them quickley..Have I missed anything from our resident "legends in their own minds"...
I must review this thread once again...
Fellah's you are taking a lot of my time up today...whats up?
ES
http://www.elitetrader.com/conduct_rules.cfm
P.S. Can you folks please help me out here and hit the complain button when there is a breach of conduct rules...Thanks. I tried to read all of these pages again...I scanned them quickley..Have I missed anything from our resident "legends in their own minds"...
Public message boards of any topic that attract men are identical in function: the disgruntled failures are always loudest and most aggressive because they have pain to share. They don't come to learn or contribute... they come to validate their own failures by denying success is possible.
The same dynamics in golf boards, hunting boards, fishing boards, shooting boards, racing boards, bodybuilding boards... men are men. Those that fail = quit are always those that bitch the loudest. emg, et el here are textbook examples of confirming failures and denying successes at every turn.
ET is no different than any other message board for men that I've spent time in. Same dynamics driven by same human behaviors, everywhere.
Here are some live equity curves linked to real brokerage accounts.
http://www.forexfactory.com/trades.php
http://www.forexfactory.com/trades.php
Both posts you mention "Trade-Ideas"....why do you keep mentioning this subscription service?
Respectful question: why do you still work at a prop firm after all of these years? (Not implying a bad answer)
Two years ago ,I was playing on sim and averaging 10 % a week.
The problem to trade this type of trading on a live account was , there was not enough information why this type of trading was making so much.You couldn't put real money on the table and trade it on real at that time ,simply because there were no rules , no money management rules and it was all based on instincts.How could you put money on something you do not understand and has not been thoroughly tested?
If you believe me or not , it will not make any difference to my earnings , so believe it or not the choice is yours.I have finally put it together with a set of money management formulas , trading rules and criteria with exits and entries , and it is working fine on a test on small live account,We can now go live with $100k, and it will work and make 10 % plus per week.It took two years to figure out.
http://www.trade2win.com/boards/forex-strategies-systems/94628-1-000-p-fx-mercenary-trading.html