Is it possible to make $50 to $70 per day with a 4K account in YM ??

[jjrvat]

Quote from Cavendish:

To correct a couple of points I have made that may have been misinterpreted:
1. institutions certainly do use leverage, but are aware of the level and danger of it. in my opinion 800 percent levered can be okay on bond contracts, with leverage calculated as gross contract value over supporting assets. equity market neutral levered at 800 is on the high side, and FX also. The natural leverage in credit default swap contracts is also manageable, but personally I keep the level down due to continued tightness of spreads. Emerging market assets run lower levels of leverage.

2. I have nothing against short term trading, but believe the commissions are key at this level, and VWAP execuion by Lehman or Goldman becomes as important as the system.

Scalping though and trading rumours and news is a world away from this framework though, and in my opinion is statistical noise.

bear in mind though this is only my view, and the funds I co-manage today dropped over forty million USD, so am always happy to engage in debate with the informed.

(Those in garages need not apply, but thanks for providing my liquidity)

Cavendish,
You just revealed one of the central points in the original discussion. While institutional traders can measure the use of leverage based on a gross contract value over supporting assets, small traders usually tend to use it in relation with the potential profits they can make and it’s particularly high when trading FX (which is ironically exactly the opposite approach to institutions).

That’s exactly the dilemma of the small day trader. Where is the line between risk, leverage and performance? If commissions, execution, small capital, and high leverage are against the small trader, and I ratify in my original opinion, one of the few options to minimize this impact is to aim for realistic targets in relation with capital invested.

jjrvat

 

[JimmyJam]

Quote from Cavendish:

and indeed to get back on topic, I think that these returns mentioned are of course possible, but I would want anyone new at this difficult business to know that 1 percent a day four out of five trading days is an extremely tough call, I would try and start aiming at three to five percent a month consistently, with standard deviation at an annualised fifteen percent or so. these are stellar figures. i'd also suggest running some stress tests on the portfolio being traded, and see how it holds up under some of these, to focus the mind. depending on level of understanding as well, maybe running costless out of the money puts alongside a long strategy as a disaster hedge.

again, just my two pennies.

Ah now that's an intelligent post!

Except the puts aren't necessary. The optimal way to make this little money is by scalping, which is what Osorico demonstrated by his posts. The Puts aren't going to help you one bit there.

We're talking a totally different trading environment here.

JJ

 

[GTS]

Is there any difference between shooting for $60/day with a $4k account and $600/day with a $40k account in YM?

 

[Cavendish]

to me the principals are the same. good money management skills, understanding of leverage and position that are appropriately sized. for the kid running a four k account, this matters just as much. good execution and shopping around for brokers is important at any account size. trading sensibly and within a framework is also hugely important. my point is that I don't like to see people sucked in by brokerage firms promising the earth and stratospheric returns, it lulls people into a view that this business is easy. if people trade small that's no problem, but they can still learn strategies used by professionals, the views are not mutually exclusive. apologies for the quick fire responses as well, am on eurostar and bored after paris eurohedge.

 

[JimmyJam]

Quote from jjrvat:

Cavendish,
You just revealed one of the central points in the original discussion. While institutional traders can measure the use of leverage based on a gross contract value over supporting assets, small traders usually tend to use it in relation with the potential profits they can make and it’s particularly high when trading FX (which is ironically exactly the opposite approach to institutions).

Another error.

Small traders measure the use of leverage based on risk, not reward.

That’s exactly the dilemma of the small day trader. Where is the line between risk, leverage and performance? If commissions, execution, small capital, and high leverage are against the small trader, and I ratify in my original opinion, one of the few options to minimize this impact is to aim for realistic targets in relation with capital invested.

The answer to your question is in having a good trading system with positive expectation which generates those returns consistently overtime.

If you had actually done your homework instead of just expressing your opinion you would see that several traders have come and gone through here who had just such a system.
***
Well good trading all, if this Short comes in as anticipated I can add another couple'a bills to the daily total

Good trading,

JJ

 

[sunggong]

Quote from GTS:

Is there any difference between shooting for $60/day with a $4k account and $600/day with a $40k account in YM?

Of course there is.

Many people here don't seem to understand this however....

 

[GTS]

Quote from sunggong:

Of course there is.

Please explain the difference - are you saying that you would have liquidity/slippage problems trading 10 cars YM?

 

[Boib]

Quote from GTS:

Is there any difference between shooting for $60/day with a $4k account and $600/day with a $40k account in YM?

shouldn't the question be can you achieve $60 per day trading one contract.

I don't see the signifigance of $4K vs 40K except for the number of contracts you trde or the time it takes you to blow out your account.

 

[GTS]

Quote from Boib:
shouldn't the question be can you achieve $60 per day trading one contract.

Some people in this thread have established that that is easily achievable. I'm trying to understand why someone capable of trading at that level isnt able to turn it into a large account in reasonable amt of time.

Quote from Boib:
I don't see the signifigance of $4K vs 40K except for the number of contracts you trde or the time it takes you to blow out your account.

I don't either - why it is so easy for people to pull $60/day on a small ($4k) account but to not be able to scale that up to more serious money ($600+/day) on larger accounts?

I trade emini's and although I spend most of my time on ER2 I don't see why scaling up would be a big problem in YM, even at the 10-20 contract level.

And for the record, I cannot pull 1% per day from the markets and if I could I certainly wouldn't be posting on ET...

 

[wavefinder]

Quote from Boib:

shouldn't the question be can you achieve $60 per day trading one contract.

I don't see the signifigance of $4K vs 40K except for the number of contracts you trde or the time it takes you to blow out your account.

I agree,this should be the question! Now the one thing that might be an issue is the psychological issues the trader might have trading a $4K vs $40K account. The losses and commisions are a smaller % on the $40K account.