How to turn $1000 into $1,000,000 with options in less than 6 years

[ExperiencedJoe]

i don't agree with the "compounding of small gains" theory. It's been well documented that the commissions, slippage, etc...will destroy your P/L unless you are 80%+ success rate. Trading often is almost impossible to win at the retail level. search youtube on the math. sorry if i turned you back to being a non-trader. I would call your brokerage firm and negotiate commissions first. trade size, etc....you will get better rates. then worry about the dark pools and HFT. scalping is for indians....

Cost has never been a problem for me. They say run your profits for a reason. The cost then becomes negligible. If cost is a concern, then you are still with the 99% and gambling. The critical part of the enlightenment is to understand you can't make a living from it until very far down the road. Once that pressure is removed, typical broker costs are quite reasonable.

Perhaps you misunderstand me. When I said making small gains, I didn't mean making 2 pip profit. That's called gambling. What I mean is reducing size until risk become manageable and can't hurt you.

 

[Johno1]

Actually you got me thinking and I think I finally understood trading in its entirety. Something that puzzled me for a very long time is why there are so few stories of professionals making it once they are outside of their environment. The answer is that once they have no more access to the capital of large firms, they are essentially dead in the water like anyone else in retail.

Making money from trading is in fact not difficult. The difficulty is making enough to turn it into employment. Safe trading is not possible without a large amount of capital. So people in retail resort to gambling to force a higher return. This gambling is what will get them all in the end.

If you know someone who makes multiple percent a day/week/month, they are merely gambling. They will be losers. There is a direct relationship between the profit size and the exposure taken. Multiple percent gains in small period of time is not possible without huge exposures. Someone taking this kind of risk is either clueless or an idiot. Their trading would be short lived and will ultimately fail.

Thanks for turning me into a real trader. Compounding of small gains is the only holy grail there is. After years of searching I have finally found what I am looking for. For once, a trading forum has actually produced some value for me. Well done ET.

I'm just hanging out this afternoon so I will address some of your ill informed statements
1. The reason institutional traders find the change to retail nearly impossible is the same as why so many previously successful floor traders/locals found it impossible to succeed as screen retail traders when the exchanges went online. The strategies and tactics that they know simply are not effective outside their designed environment therefore in many ways they are like the rest of us who had to do the hard yards to find something that works, nobody hands it to you on a platter. Although if I went to work in an institutional environment they would teach what they want me to do. Unless you have something that works in the environment you are operating, no amount of money is going to save you. I recommend that you go and find out what the institutional traders do so that you cease making erronious assertions.
2. Making money from trading is not difficult to do IF you know what you are doing, the vast majority of retail traders (I use the term trader loosely) are clueless babes in the woods, and they will be ripped apart in due course. I agree with most of what you are saying in the second and third paragraphs if applied to your average retail trader. As I mentioned in a previous post the solution will be found in Risk Management. By altering your Risk Profile you will remove all the issues you have mentioned in these paragraphs, obviously you didn't understand what I was saying. I suspect the only notion of Risk Management you have is some vague notion you read somewhere. Risk Management is what allows Blackjack card counters the ability to put the odds in their favour even though the odds would normally favour the house and the casinos work very hard to keep them away from their tables. It also allows successful poker players to remain at the table long enough to capitalise on the winning hands, it also allows traders to survive long enough for the law of large numbers to kick in, by allowing you to skew the odds from 2or3 to 1 against to this many or more times in your favour, we always have the theory of runs to deal with. So provided you are not a knucklehead you are pretty much guaranteed to succeed. No, you don't need millions to make a living at this game, $100K-$200K is more than enough, but you do need to know what you are doing or no amount will be enough.
3. In the short time that I have known you there is one thing that I am certain of and it is that you do not reflect any of the main characteristics of a successful trader. I suspect that you are in your teens or maybe even still in school, that's not to say that you aren't older but rather a reflection of your maturity and behaviour, it may be that you simply have an incredibly large ego that is running out of control, who knows. I wish you well in your pursuit of small gains, but have already mentioned in a previous post why you are doomed to failure, obviously your reading skills match your knowledge of mathermatics, but of course this makes perfect sense.

I realize that I am wasting my time showing you anything, but rather do this for the people who follow in the hope that it might spark that AHAA moment for them, rather than being put off by your antics, my gift to them.

Cheers John

 

[Johno1]

so

i don't agree with the "compounding of small gains" theory. It's been well documented that the commissions, slippage, etc...will destroy your P/L unless you are 80%+ success rate. Trading often is almost impossible to win at the retail level. search youtube on the math. sorry if i turned you back to being a non-trader. I would call your brokerage firm and negotiate commissions first. trade size, etc....you will get better rates. then worry about the dark pools and HFT. scalping is for indians....

I already put this to him in terms of the odds against short term traders, brokerage,slippage, spreads, mistakes, cutting winners short, letting losers run? ect. He certainly has a lot to say for someone with so little to share.lol
Cheers John

 

[ExperiencedJoe]

I'm just hanging out this afternoon so I will address some of your ill informed statements
1. The reason institutional traders find the change to retail nearly impossible is the same as why so many previously successful floor traders/locals found it impossible to succeed as screen retail traders when the exchanges went online. The strategies and tactics that they know simply are not effective outside their designed environment therefore in many ways they are like the rest of us who had to do the hard yards to find something that works, nobody hands it to you on a platter. Although if I went to work in an institutional environment they would teach what they want me to do. Unless you have something that works in the environment you are operating, no amount of money is going to save you. I recommend that you go and find out what the institutional traders do so that you cease making erronious assertions.
2. Making money from trading is not difficult to do IF you know what you are doing, the vast majority of retail traders (I use the term trader loosely) are clueless babes in the woods, and they will be ripped apart in due course. I agree with most of what you are saying in the second and third paragraphs if applied to your average retail trader. As I mentioned in a previous post the solution will be found in Risk Management. By altering your Risk Profile you will remove all the issues you have mentioned in these paragraphs, obviously you didn't understand what I was saying. I suspect the only notion of Risk Management you have is some vague notion you read somewhere. Risk Management is what allows Blackjack card counters the ability to put the odds in their favour even though the odds would normally favour the house and the casinos work very hard to keep them away from their tables. It also allows successful poker players to remain at the table long enough to capitalise on the winning hands, it also allows traders to survive long enough for the law of large numbers to kick in, by allowing you to skew the odds from 2or3 to 1 against to this many or more times in your favour, we always have the theory of runs to deal with. So provided you are not a knucklehead you are pretty much guaranteed to succeed. No, you don't need millions to make a living at this game, $100K-$200K is more than enough, but you do need to know what you are doing or no amount will be enough.
3. In the short time that I have known you there is one thing that I am certain of and it is that you do not refl;ect any of the main characteristics of a successful trader. I suspect that you are in your teens or maybe even still in school, that's not to say that you aren't older but rather a reflection of your maturity and behaviour, it may be that you simply have an incredibly large ego that is running out of control, who knows. I wish you well in your pursuit of small gains, but have already mentioned in a previous post why you are doomed to failure, obviously your reading skills match your knowledge of mathermatics, but of course this makes perfect sense.

I realize that I am wasting my time showing you anything, but rather do this for the people who follow in the hope that it might spark that AHAA moment for them, rather than being put off by your antics, my gift to them.

Cheers John

There is no stories of screen traders making it either. Simple truth is that retail don't make it be them originally from the pit or from screen trading. The problem is one of capital to risk ratio. Your 100-200k is good for playing blackjack for sure. But real trading is a different game.

 

[istoptime]

You guys are funny, so i'll chime once more tonight. The floor traders are given an edge by a friend (both in the pit, but only one needs to be) and sometimes that edge is selling 9's as 8's go offer, so they can immediately buy 8's if they want. of course they can't do that the same way online. I do think the amount of money matters, since if you only have 30k and lose it all...well it's all over. but if you have 300k and lose 30k, there is still a chance you can learn and recover before it's all gone. also trading with 'scared money' is just that. the only successful trait i've really seen are traders who can wait and wait and then blindly buy in a pullback with small size, decent stop, and then add a lot when it goes in their favor. 10-50k days i've seen. but yes, the ego will crush....and all it takes is one loss you don't want to take, or add to it, and the next you know you are down months and months of profits.....eventually you see it all.

wasn't sure if u meant 2 pip profit, thanks for the clarification.

 

[ExperiencedJoe]

You guys are funny, so i'll chime once more tonight. The floor traders are given an edge by a friend (both in the pit, but only one needs to be) and sometimes that edge is selling 9's as 8's go offer, so they can immediately buy 8's if they want. of course they can't do that the same way online. I do think the amount of money matters, since if you only have 30k and lose it all...well it's all over. but if you have 300k and lose 30k, there is still a chance you can learn and recover before it's all gone. also trading with 'scared money' is just that. the only successful trait i've really seen are traders who can wait and wait and then blindly buy in a pullback with small size, decent stop, and then add a lot when it goes in their favor. 10-50k days i've seen. but yes, the ego will crush....and all it takes is one loss you don't want to take, or add to it, and the next you know you are down months and months of profits.....eventually you see it all.

wasn't sure if u meant 2 pip profit, thanks for the clarification.

Floor traders front runs everyone. They don't count. Out of the pit, they are as good as dead. There are no retired hedge fund traders making it. Those kind of traders are like retail except while running a fund they have the capital.

Making 20% a year on 300k capital can produce barely passable living. Impossible on a 30k capital. The typical retail will gamble the lot away because no matter what he does 30k cannot return any semblance of a living. This is where the power of capital plays a major role in trading. The more you have, the less gamble you need to make. When you stop gambling, you start trading.

 

[Johno1]

You guys are funny, so i'll chime once more tonight. The floor traders are given an edge by a friend (both in the pit, but only one needs to be) and sometimes that edge is selling 9's as 8's go offer, so they can immediately buy 8's if they want. of course they can't do that the same way online. I do think the amount of money matters, since if you only have 30k and lose it all...well it's all over. but if you have 300k and lose 30k, there is still a chance you can learn and recover before it's all gone. also trading with 'scared money' is just that. the only successful trait i've really seen are traders who can wait and wait and then blindly buy in a pullback with small size, decent stop, and then add a lot when it goes in their favor. 10-50k days i've seen. but yes, the ego will crush....and all it takes is one loss you don't want to take, or add to it, and the next you know you are down months and months of profits.....eventually you see it all.

wasn't sure if u meant 2 pip profit, thanks for the clarification.

I'm not disagreeing that the larger your account the better, but I'm quite confident that even in the worst case where I only had $100K I would be able to run it back up with my current skills, albeit would take some time, and I would be somewhat limited in what opportunities I could take on, spreading would take on a bigger role. My strategy doesn't expose me to large let alone catastrophic risk. Obviously writing premiun wouldn't be an option and I'm currently long the SP500 this would be problematic as well, margin issues. no pun intended.lol For your average retail trader I agree with your observations, but not in my case, not that I would want to be in that position.
Cheers John

 

[lawrence-lugar]

lets stop arguing and help me learn how to turn 15k into 150

Crayon,
Take that 15K...and bet it on options -- and let compounding do the rest...which can happen relatively fast with options. With stock, it would take you multiple lifetimes.

Of course, though, it's easier said than done -- and the devil, is in the details./\`
Safe travels, Marco Polo...your Ship,has come in_

 

[Johno1]

Crayon,
Take that 15K...and bet it on options -- and let compounding do the rest...which can happen relatively fast with options. With stock, it would take you multiple lifetimes.

Of course, though, it's easier said than done -- and the devil, is in the details./\`
Safe travels, Marco Polo...your Ship,has come in_

Geez, there are some real smartar-es on here.lol
The problem is that what I or someone else would do with your 15K you probably wouldn't be able to do and even then it wouldn't be worth the hassel, lawrence-lugar is just taking the p-ss.lol You have got to learn to laugh a lot around these jokers.lol
Cheers John

 

[ExperiencedJoe]

Crayon,
Take that 15K...and bet it on options

Why ? The money has grown from 1k to 10k and now to 15k. Rather than betting, isn't it less work just keep letting the money grow by itself ?

I have a feeling the OP's money will have grown to 1 million by this time next month. Pity he won't see a penny of it because he has gone and jump off a bridge somewhere.