This is completely not true. There are certain market and certain instruments that you can hold and do not use margin. I've done so.
200%+ is certainly possible and there is no blow-up risk if not trading on margins.
Is 50,000$ Enough to set up a trading account to earn a full time living?
- Thread starter RogueTrader92
- Start date
This is completely not true. There are certain market and certain instruments that you can hold and do not use margin. I've done so.
200%+ is certainly possible and there is no blow-up risk if not trading on margins.
Then you know the answer. In your own experience can you make a full time living with 50K?
All assets have a risk/return combination that can me regressed to the security market line. A theoretical concept.
Not including leverage, most have returns in single digits. Additionally, trading strategies are merely buy/sell optimizations around an asset's expected return. Therefore, strategy returns will be highly correlated to that assets return.
You may not be using financial leverage, but you are using some kind of leverage. In a stock trader's case, the trader would have to load up on a ton of Beta that is many multiples of the market. If the market, Beta 1, can loose 50% in a given year then catastrophic loss becomes an eventuality.
We could keep thinking that we have that special something (superior timing or selection) that would allows us to be that 1% trader. But, bare in mind that legendary figures are documented to make only 20-30% a year for 10 years straight.
A trader has to recheck their return assumptions and know how they are generating excess returns. That will also give them an idea of possible losses.
Any successful trader should be above the crowd. Some may have 10 up years in a row. Some may have 3-4 down years over 10 years. All very common.
But you just can't say it is impossible just based on your own experience. If you are making single digit in this market, then you are not doing things right.
Thank you for answering the OP's question.
A very important thing for people to remember is the compounding.
Some traders start with $50,000 or even less. After they double it to $100,000 in a year or less, you get $100,000 to trade with. If you or they are successful, you can continue to grow exponentially. This is how some traders can grow from $50,000 to $1MM or more in just several years.
Of course, there are many IFs. The average traders are not even successful....
Some traders start with $50,000 or even less. After they double it to $100,000 in a year or less, you get $100,000 to trade with. If you or they are successful, you can continue to grow exponentially. This is how some traders can grow from $50,000 to $1MM or more in just several years.
Of course, there are many IFs. The average traders are not even successful....
Yes, but.
Compounding works best for investing, less for trading, especially when you trade for a living.
