Quote from gnome:
His experience is probably more typical than not for *successful* traders.
Yes, one can trade with $5,000, but shouldn't expect to make enough to live on. Trade the QQQ, SPY, or some other non-leveraged vehicle and learn the process. Don't expect to make big gains right away. Don't be too disappointed if you've made little progress after several years.
The experience will either "energize you to do better" until you get it, or bust you out and make you quit.
THAT I agree with! Although it is possible to trade with a small account, it should be looked at with a view on building it up to a larger account.
Here is a part of an article I wrote on my site:
"...But for those who trade the minis for it's own sake, there's a
certain difficult psychological give-and-take. On the one
hand, they stand to lose less money. On the other hand,they
stand to make less money. This second point is much more
dangerous for safe, profitable trading than most people
realize. Let's be honest: whenever people daytrade,
whatever equity it is that they're daytrading,they're doing it
for one reason: they want to become rich. At the very least,
they want to make a GOOD living. This is something that is
extremely difficult, if not impossible, to do when you're
daytrading one or two minis. Let me give you an example:
Someone who trades the big S&P and manages to take an
average of two points out of the market each day, is making
$10,000 a month.That s $120,000 a year. Most Americans,
most ANYONE in the WORLD,would be more than happy
w th such a living.In the minis, however, 2 points equal
$100.This eguals $2000 a month, and $24000 a year. The difference is very,very big! The problem, is that the mini
trader wants to have the same profits as the big S&P trader
is having while just trading his two minis, and that can
create a large amount of psychological pressure. The mini
trader doesn't have to be as good a trader as the big S&P
trader. He has to be FIVE TIMES as good a trader. He has
to trade FIVE TIMES as LONG as the big S&P trader. This
pressure (which is often subconscious), creates, among
others, impatience.This impatience can easily cloud the
judgement of the trader. It makes him get into trades before
he should. It makes him get out before he should,or after he
should. It makes him abandon a trading method if it hasn't
shown him immediate promise, and makes him wander
from method to method, and from chatroom and forum to
chatroom and forum...
So what does all this mean? Am I telling all the "small"mini
traders to give up trading? Absolutely not. Rather I âm
telling you the following: sit down and think.Make precise
goals for yourself, and not short-term ones. How much
money do you want to be making, and in how long? How
much per day on average? Per week,per month?
Above all,you must be realistic . Chances are you won ât
make a great living trading one or two eminis. You can get
there, however, if you set your goal at making enough profit
to add another contract. And then another. And then another. Eventually,with time and patience,you can be making that great living..."
All the best,
Phil
