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

[JimmyJam]

Quote from GTS:

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

Not beyond a couple'a ticks on the YM or 1 tick on the ES, the slippage with that number of contracts would be negligible.

The main difference is in how you manage your risk. The main problems that most retail traders run into is that they've never learned how to manager their risk correctly in relation to their amount of their performance bond.

That's because everyone is selling a system (or concept) based primarily on entry and exit signals (hell, there's even a new book out with that title).
***
Your position sizing should be done in a geometric progression in relationship to the amount of performance bond in your account. This will effectively decrease your risk while simultaneously increasing your reward. Doing this guarantees you get the win at the end of the day (or year, as the case may be).
***
Oh, and in case you're wondering, I'm not writing this for the naysayers, they already know it's impossible. This is for jimmygold and his crew, who want to learn how to better their trading.

Good trading,

Jimmy Jam

P.S. I've just answered the slew of questions on the previous page. By the contents of my post, it should be pretty clear that I've graduated High School, and then some ... you're going to have to learn how to think outside the box and be creative if you want to survive and prosper in this game. As Cavendish knows, the odds are so heavily stacked against the retail trader that only 10% will survive and prosper, PERIOD.

I just plan on being in that group, that's all.

 

[Pekelo]

Quote from GTS:

I'm trying to understand why someone capable of trading at that level isnt able to turn it into a large account in reasonable amount of time.

Psychology. Comfort level. A trader can be very comfortable knowing that each tick worths 5$ or 10$ but would be unable to trade the same way if it was $50 or $100 per tick.

There is also a difference between 4K and 40K beside the slipage, and that is position sizing. The 4 K guy if he sticks to his 1 contract can only trade 1 contract.
The guy with the bigger account can change and trade LESS then 10 cars if the setup is not optimal. He can also average in, etc....

 

[osorico]

Lot's of problems getting on to ET.

Final for day...

28 trades, 112 contracts total, 8pts NET per contract, 2h 8m total market exposure.

as of 2:40 est:

113pt YM range
100% YM range x 4 cars = 452 YM pts
100% market exposure = 5h 10m (310min)

Trading results:
Range capture ratio = 1.98%
Market exposure risk beta = .41
(for lack of a better term)

Calling it a day = priceless

Osorico

 

[sunggong]

Quote from Pekelo:

Psychology. Comfort level. A trader can be very comfortable knowing that each tick worths 5$ or 10$ but would be unable to trade the same way if it was $50 or $100 per tick.

There is also a difference between 4K and 40K beside the slipage, and that is position sizing. The 4 K guy if he sticks to his 1 contract can only trade 1 contract.
The guy with the bigger account can change and trade LESS then 10 cars if the setup is not optimal. He can also average in, etc....

Ding, ding, ding!

 

[GTS]

Quote from Pekelo:

Psychology. Comfort level. A trader can be very comfortable knowing that each tick worths 5$ or 10$ but would be unable to trade the same way if it was $50 or $100 per tick.

I meant to leave psychology out of this. Also I don't think your statement is correct. $4k to one person may in fact be equal to $40k to someone else - it really depends on how much money someone has to lose.

If someone starts with $4k and keeps growing their account and adding size over time then I don't see how the comfort level will change either - they should get used to trading larger and larger positions with the acct growth.

Quote from Pekelo:
There is also a difference between 4K and 40K beside the slipage, and that is position sizing. The 4 K guy if he sticks to his 1 contract can only trade 1 contract.
The guy with the bigger account can change and trade LESS then 10 cars if the setup is not optimal. He can also average in, etc....

Ok, if anything you are saying that the person with $40k has the advantage, not the disadvantage because he has more flexibility.

What I'm getting at is that a lot of people here are saying its easy to do $60/day on a $4k account but when I asked why aren't there more millionaires on ET I am getting the sounds of silence or ridicule. So far I haven't heard a good argument on why these $60/day people can't scale up to the point that they have a 7 digit acct.

 

[Cavendish]

although it may not be of a massive relevance to a 4k starting up account, but in my opinion the central premis is relevant, this is how i look at risk budgeting. I also agree with JJ about positive expectance, and it always leads me on to thinking about another perverse piece of logic, which runs that if you have a good strong system with positive expectation you should trade within a risk management framework as discussed elsewhere, aiming for 1% daily standard deviation takes you 16% volatility a year, so a goo system should stay at this level (or at x level stdev) and play a long game.

conversely if you have a poor system, you should bet big and early in the hope of getting lucky quick, as in the ong run you will definitely lose. can never work out why that feels so odd, but i think its true. i think.

back on to risk framework - a daily VaR amount linked by the SQRT(252) formula to give an annual volatility as a rule of thum is good i think. i realise there are issues with linearity and distribution in moving from VaR to Stdev, but as a rule of thumb its okay.

Then use an expected shortfall type of approach with some scenarios relevant to your markets, and see if these losses would be acceptable. if not, look to hedge them with puts, diversifying positions, or simply reduce the position size.

 

[jjrvat]

jj,

I never denied that very few small traders can make “millions”. I even congratulated you to be one of them but please if you’re going to use my opinions at least quote them correctly:

1. I said [SMALL TRADERS USUALLY ]. I didn’t say ALL and especially I wasn’t referring to Master traders like you.

QUOTE]Quote from GTS:

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.

GTS,

2. If you just talking about making $600 in one day with a 40k account it is possible, if it is $600 per day consistently it will be almost impossible but if you ask me to aim for $12000 profit a month with my 40K account I will say definitely YES I WILL GIVE IT A TRY … if I had 40k to spare.

jjrvat

 

[GTS]

Quote from jjrvat:

Quote from GTS:
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.

2. If you just talking about making $600 in one day with a 40k account it is possible, if it is $600 per day consistently it will be almost impossible but if you ask me to aim for $12000 profit a month with my 40K account I will say definitely YES I WILL GIVE IT A TRY … if I had 40k to spare.

No, I'm talking about doing exactly what the OP is asking, making $600/day on AVERAGE by doing the same thing that the people who say $60/day AVERAGE is easy; just scaled by ten.

So far I have not heard any technical trading reasons why they are not equivalent (e.g. slippage), just psychological concerns.

 

[sunggong]

Quote from GTS:

I meant to leave psychology out of this. Also I don't think your statement is correct. $4k to one person may in fact be equal to $40k to someone else - it really depends on how much money someone has to lose.

If someone starts with $4k and keeps growing their account and adding size over time then I don't see how the comfort level will change either - they should get used to trading larger and larger positions with the acct growth.

Ok, if anything you are saying that the person with $40k has the advantage, not the disadvantage because he has more flexibility.

What I'm getting at is that a lot of people here are saying its easy to do $60/day on a $4k account but when I asked why aren't there more millionaires on ET I am getting the sounds of silence or ridicule. So far I haven't heard a good argument on why these $60/day people can't scale up to the point that they have a 7 digit acct.

First, you can't leave psychology out of the equation.

Second, you can't talk about two different people's perception on how much 4k is really worth to them.

You need to look at one person here. If that person starts out with 4k and is successful. It gets more challenging to achieve similar success when the account size grows to 40k for that same person and even harder when it grows to 400k and strategies will have to be changed accordingly.

You make it sound like someone who does well with 4k can equally do well at 40k and 400k and beyond. That's not the case. You can't just scale your strategy....

That's why several hundred % rate of return for daytraders is completely different from 10%, 20% ROR for fund managers and other big boys at the Wall Street.

 

[Pekelo]

Quote from GTS:

I
If someone starts with $4k and keeps growing their account and adding size over time then I don't see how the comfort level will change either - they should get used to trading larger and larger positions with the acct growth.

In theory, I agree. But there can be practical reasons like withdrawing money for expenses, etc.

I assume if the growth is steady and doesn't happen to fast, the trader can get use to the increased risk. This also happen in real life, quite a few people run up accounts from a small amount. It is just not that common.

There is another psychological reason why it is hard to do so. Once the trader is succesful with a few cars, it is VERY easy to think himself as invincible and always right. Thus when the increase in the number of contracts traded happen, there is usually a bigger DD, because the trader is reluctant to acknowledge that he can be wrong sometimes...