Is it possible to net $100K a year

[flyingdutch]

Quote from Dominic:

I actually started this thread asking about others P&L (Is 100K possible with $100K BP per year) and have been beat down over a $65K loss on one stock that I included in the post. So many have been quick to judge and point the finger without knowing all the facts on the trade, even though that wasn't even the main question, just a remark.

I had 3K of PGTV and was holding overnight. News came out pre market (40 per share) and the stock dropped close to 20 points in 1 day. Only 3.5 million shares and 60% short float. Needless to say I, among many other longs got taken too the cleaners.

hmmm, now that shines a different light on the situation. I agree that everyone makes losses from time to time. You cannot be right all the time. But if you want to make money, you'ld better be sure that you put everything you can into your favour before entering a trade. So let's have a closer look at your "disaster" trade. It happened on 5th Feb 2004. Right? If I look at the daily chart, the stock is heading down already for a couple of days, and around 42. Volume is going up, strengthening the down trend. The naz is down (although close to a support). The only little support for the stock is at 40. The next support is waaayyyy down. a rebound on 40 could have lifted it up to 50. But a break through the 40 would have been a disaster anyway. (Look at the bar of 15 Jan). The ATR is around 3. Also the bar at 8/11/3 could have given you a clue where this stock would be heading after 40. So my question is: why did you put such a big lump of your capital on that trade? What made you buy it? So, had I been asked that day, I would have said ; you are taking about 4-5$ risk per share, with a considerable high probability of the stock going down. 3K shares. So you were putting around 15k at risk. 15% of your capital. That is already waaaayyyyy too much.
Had I been asked that day what trade to take on that stock, considering it's direction, the direction of the naz, it's support lines, the MACD and Slow Stoch, I would have taken a short
at 42 (the close), stop 44, target 37. I never put more than 2% of my capital at risk. IF capital was 100k, risk to take 2k. Divided by 2$ risk, makes 1000 shares to short.

To summarize, this trade had already a high probability of being a looser when you entered it. The overnight news turned it from a bad trade in a disaster trade.

So to come back to your original question: can you make 100k with 100k. Yes, even 200, or 300. How? By selecting GOOD trades. I realize that this may sound like a non-statement , but I hope I made it clear from the above that this wasn't one. And as long as you are not able to recognize the (potential) good trades from the bad ones, you're doomed in this bussiness. Now there are lots of good books on identifying good trading patterns, there is trading software that can help you, sites that give signals. But it takes time, time, work, work. I am a full time trader, and when I say full-time , it's about 12-14 hours a day (including accounting, studying, backtesting etc.).

Oh, and BTW, I ONLY do daytrading, just to avoid these overnight "surprises". But that is another story.

TFD

 

[tradewiz50]

Quote from Dominic:

(-$65K on one trade) and cant seem to get my edge back.

You got F#cking Raped on that trade. Obviously, you need to work on your cash management and just basic discipline.

Ever hear of a stop?

To answer your other question. Yes you can make over 100K a year. I've done it for the last 3 years.

 

[Mecro]

Quote from rjontrades:

Just so someone can give you a response to the original question, I have averaged over $200k/year the last 5 years, and have traded nasdaq almost exclusively (hate the specialist system). And rarely do I ever use over $150k of buying power. I trade at a prop firm and at times may have $200-250k being used, but it more likely will be $50-100k. So it can be done, as long as you have access to the bp, which may prove difficult in a retail account if you are losing.. Just remember small winners (not scalping though, for me at least) add up... Hope you can pull it off.

This a great example. I assume rjon makes about 1k a day which will amount to over 200k a year. It is very possible with 150K BP as I did it throught December & January. But at times when I would take a few positions and some higher priced stocks, my 150K BP would hinder me. Hence I had it raised to half mil and I have not yet needed all of it yet.

My suggestion is to simply go to prop or even retail and get some good BP around 200k-300K. It seems like your 65k loss raped your account and started hindering your trading due to lack of funds.

 

[mogul]

Quote from Mecro:

Oh my god, leave the poor guy alone.

WTF yo it's like you guys are having orgasms over lecturing and criticising this guys loss. I'm pretty sure he stated the loss situation and fully acknowledged his mistake in letting his ego take control and not exercising discipline. Take a look at a daily, PGTV dropped almost 20 points in one day. Apparently if you held it a few more months you would have made some money.

Man that stock used to be over 700.

harsh or not...the guy asked for advice...now if he blew 3/4th of his trading account on one trade the advice could not be harsh enough

 

[Virtuoso]

Quote from EtfTrader:

If you aren't making at least 40%+ off your money consistently every year, then something is wrong - this is not your line of business. Who cares what other people are making. You need to focus on getting the job done, consistently, year over year.

Some food for thought for your $100,000 account:

Compounding
Starting Equity: $100,000
Year over year % gain: 40.00%

Year Dollar Gain Balance
==========================
0 $100,000
1 $40,000 $140,000
2 $56,000 $196,000
3 $78,400 $274,400
4 $109,760 $384,160
5 $153,664 $537,824
6 $215,130 $752,954
7 $301,181 $1,054,135
8 $421,654 $1,475,789
9 $590,316 $2,066,105
10 $826,442 $2,892,547

What is it, clearly, you are trying to achieve?

That is a lovely calculation you done concocted, assuming of course, that you live in a world without such a thing as income tax and living expenses...

I'm just sayin...

 

[Turok]

...and liquidity limits.

JB

Quote from Virtuoso:

That is a lovely calculation you done concocted, assuming of course, that you live in a world without such a thing as income tax and living expenses...

I'm just sayin...

 

[Virtuoso]

Quote from BSAM:

Bro, how in the heeeellllll did you lose sixty-five thousand dollars on ONE trade? Seriously, please explain, if you care to do so. Just curious and it could help some other trader.

A man can be as wise as Soloman with the "emotional intelligence" of a zen monk and still get carried away...

 

[optionist]

Dominic,

Losses are part of the game and we all need to just accept this fact and move one. Those who haven't had big losses have either been very discipline at all times, or just plain old lucky.

Making any amount of money in this market (or in any capital related businesses for that matter) depends very much on the style of one's trading and or the buying power. One can play risky and make lots of money but then again there'll be a time when he/she can get wiped out by series of bad trades, etc. The point is that one shouldn't think of absolute $ amount but that focus should be on trading method and its scalablity for making money.

As for dealing with big losses, the best thing you can do is try not to be quick to get it all back. Trade smaller position size and gain your confidence back first. The name of the game is consistency and once you're on a role, you're recover them in no time.

 

[kcmike]

$800 a day for 200 days a year is $160K. After taxes, commissions and losing days (assuming you don't loss 65%-no jab intended...I just know some smarta$$ will through it out there) there's got to be $100K left.

My question to add to Dominics is how much do you have to put into play EACH day to make (gross) $800 a day?

Thanks.

 

[lkh]

Quote from flyingdutch:

hmmm, now that shines a different light on the situation. I agree that everyone makes losses from time to time. You cannot be right all the time. But if you want to make money, you'ld better be sure that you put everything you can into your favour before entering a trade. So let's have a closer look at your "disaster" trade. It happened on 5th Feb 2004. Right? If I look at the daily chart, the stock is heading down already for a couple of days, and around 42. Volume is going up, strengthening the down trend. The naz is down (although close to a support). The only little support for the stock is at 40. The next support is waaayyyy down. a rebound on 40 could have lifted it up to 50. But a break through the 40 would have been a disaster anyway. (Look at the bar of 15 Jan). The ATR is around 3. Also the bar at 8/11/3 could have given you a clue where this stock would be heading after 40. So my question is: why did you put such a big lump of your capital on that trade? What made you buy it? So, had I been asked that day, I would have said ; you are taking about 4-5$ risk per share, with a considerable high probability of the stock going down. 3K shares. So you were putting around 15k at risk. 15% of your capital. That is already waaaayyyyy too much.
Had I been asked that day what trade to take on that stock, considering it's direction, the direction of the naz, it's support lines, the MACD and Slow Stoch, I would have taken a short
at 42 (the close), stop 44, target 37. I never put more than 2% of my capital at risk. IF capital was 100k, risk to take 2k. Divided by 2$ risk, makes 1000 shares to short.

To summarize, this trade had already a high probability of being a looser when you entered it. The overnight news turned it from a bad trade in a disaster trade.

So to come back to your original question: can you make 100k with 100k. Yes, even 200, or 300. How? By selecting GOOD trades. I realize that this may sound like a non-statement , but I hope I made it clear from the above that this wasn't one. And as long as you are not able to recognize the (potential) good trades from the bad ones, you're doomed in this bussiness. Now there are lots of good books on identifying good trading patterns, there is trading software that can help you, sites that give signals. But it takes time, time, work, work. I am a full time trader, and when I say full-time , it's about 12-14 hours a day (including accounting, studying, backtesting etc.).

Oh, and BTW, I ONLY do daytrading, just to avoid these overnight "surprises". But that is another story.

TFD

isnt it amazing how clear things are looking at after the fact charts.