Keeping My Day Job â Trading 20k to 2 Million in 20 Years, One Month at a Time
I have no dream of day trading for a living. I have no expectation of getting rich quickly. I did harbor such desires for a long time, and I gave it the old college try.
A few months back, upon re-reading Gary Smithâs How I Trade for a Living, I decided to stop chasing those dreams and instead to pursue a simple goal: To be profitable every month.
That goal â to be profitable every month â is my only goal. I am not concerned with the size of the profit. I just want to trade profitably month after month. I figure I have about twenty years before Iâd like to retire, and if I can be profitable month after month, I would expect that my grubstake, such as it is, should grow to a respectable amount by then.
My trading account has a current equity of $20,007.03 as of todayâs close, 3/01/2011, and I am currently in all cash.
My approach is short-term swing trading. Most of my trades last a few days to a few weeks, with a very few (too few, I might add) stretching into months. I do put on an occasional day trade when an exceptional opportunity presents itself and I happen to be available to participate in that opportunity. However, most of my trades which become âdayâ trades do so simply because an intended swing trade turned tail and was stopped for a loss on the day of entry.
I trade stocks, stock options, and futures. I do not trade options on futures.
I usually size a stock or option trade at a 2% of capital risk. For futures, given the leverage involved and current volatility, I often have up to a 5% initial risk. If a trade requires more than a 5% bet, I sit that hand out. As my capital grows, I would like to bring my per trade risk level for all instruments down to 1% of capital.
Should I experience a peak to trough drawdown of 30%, I will stop trading until I can replace at least half of the drawdown with money earned and saved from my day job. So,I currently have a âstop lossâ on my equity of approximately $6K â should I find myself down by that amount at any time, I will stop trading until I earn and save half of the loss to refresh my equity.
As my main concern is to be profitable every month, and as this journal is meant to document my efforts in pursuit of that goal, my plan is to update this journal at the end of each month. I will provide an end of month p/l along with a list of the positions I opened and closed during the month. I may or may not provide weekly updates. As I am not a day trader, I do not trade everyday, and indeed, I sometimes go weeks without placing a trade depending upon market conditions.
Good trading to all,
KMDJ
I have no dream of day trading for a living. I have no expectation of getting rich quickly. I did harbor such desires for a long time, and I gave it the old college try.
A few months back, upon re-reading Gary Smithâs How I Trade for a Living, I decided to stop chasing those dreams and instead to pursue a simple goal: To be profitable every month.
That goal â to be profitable every month â is my only goal. I am not concerned with the size of the profit. I just want to trade profitably month after month. I figure I have about twenty years before Iâd like to retire, and if I can be profitable month after month, I would expect that my grubstake, such as it is, should grow to a respectable amount by then.
My trading account has a current equity of $20,007.03 as of todayâs close, 3/01/2011, and I am currently in all cash.
My approach is short-term swing trading. Most of my trades last a few days to a few weeks, with a very few (too few, I might add) stretching into months. I do put on an occasional day trade when an exceptional opportunity presents itself and I happen to be available to participate in that opportunity. However, most of my trades which become âdayâ trades do so simply because an intended swing trade turned tail and was stopped for a loss on the day of entry.
I trade stocks, stock options, and futures. I do not trade options on futures.
I usually size a stock or option trade at a 2% of capital risk. For futures, given the leverage involved and current volatility, I often have up to a 5% initial risk. If a trade requires more than a 5% bet, I sit that hand out. As my capital grows, I would like to bring my per trade risk level for all instruments down to 1% of capital.
Should I experience a peak to trough drawdown of 30%, I will stop trading until I can replace at least half of the drawdown with money earned and saved from my day job. So,I currently have a âstop lossâ on my equity of approximately $6K â should I find myself down by that amount at any time, I will stop trading until I earn and save half of the loss to refresh my equity.
As my main concern is to be profitable every month, and as this journal is meant to document my efforts in pursuit of that goal, my plan is to update this journal at the end of each month. I will provide an end of month p/l along with a list of the positions I opened and closed during the month. I may or may not provide weekly updates. As I am not a day trader, I do not trade everyday, and indeed, I sometimes go weeks without placing a trade depending upon market conditions.
Good trading to all,
KMDJ