I'm in a very similar situation. Small Business owner. Business is good, but tougher than it used to be. I started thinking seriously about wanting to learn to trade and invest as an eventual replacement to business income, years ago. Trust me, it's a LOT tougher than you think, and 10k isn't going to do it. Now, by all means open an account with 10k and start trying things out. You have to start somewhere, but don't count on making 200 to 400 dollars a day from a retail account using that much capital any time soon.
Making $200-$400 a day (average), realistic goal for a new trader to grow into?
- Thread starter bryan942
- Start date
How much per day are you willing to lose before you stop for the day. That is the key to your success.
Well, I have to totally agree with what Steve0617 has said with very few exceptions. One being that I think Oliver Velez is a piker, and would not listen to anything he says. hsa methods are far to complex for the average trader to execute consistently.
With respect to Makloda, I would have given up years ago if the best I could do was around 25% per year. Perhaps these numbers are fantastic for a hedge fund or mutual fund, but for an individual, I personally consider them beyond poor.
I started in 1983, just goofing off part time, while working a full time job. By 1996 it no longer made sense to keep my job, and I started full time trading. During my learning years I traded everything, and I do mean everything. I started with stocks and went in every direction. Ended up trading full size S&P contracts, as there were no minis at that time.
Now, I trade stocks exclusively. NASDAQ or NYSE. I prefer NASDAQ, but it really does not matter. I could trade anything, as it is not at all what you trade, it is how you trade it. I just feel personally that there are far more insufficiencies to exploit in stocks, rather than futures. Basically, it is easier for me to make money.
Ditto on what Steve said about your trading method being simple. It should be ultra simple; I know mine is, otherwise I could never execute it. You should be able to explain it to a ten year old in five minutes.
I use no technical analysis at all. I only use price action. I believe that technical analysis only pulls a trader further away from the only thing that matters-----price.
It is a rare event that I am not done trading by 11:00 AM. I look to exploit the price action at the open basically. I honestly do not care how anyone else trades or what anyone else is doing. I only care about my account and what works for me.
I use no position sizing or anything else that you will read about. I trade the same amount of shares every single day. Despite what you read about daily goals, I do set a goal of making 1% per day, on the money in my account. Yes, I do use 4x margin, but the 1% goal is simply on the money in my account.
So if you wanted to make $500 per day, you would need 50k trading at 4x margin. I consider myself a very mediocre trader at best. I just know what does and does not work for me. I personally think trading is easy, although it did not used to be. I had to sort out all the b#llshit on my own with no help from anyone. If I someone had explained to me what I know now, in the beginning, I could have shaved 13 years off my learning curve, as well as a lot of pain and frustration. I probably could have been profitable within 6 months.
I don't care for Steenbarger, but I would highly recommend the Douglas book. If your mind is not right, you will never be profitable.
With respect to Makloda, I would have given up years ago if the best I could do was around 25% per year. Perhaps these numbers are fantastic for a hedge fund or mutual fund, but for an individual, I personally consider them beyond poor.
I started in 1983, just goofing off part time, while working a full time job. By 1996 it no longer made sense to keep my job, and I started full time trading. During my learning years I traded everything, and I do mean everything. I started with stocks and went in every direction. Ended up trading full size S&P contracts, as there were no minis at that time.
Now, I trade stocks exclusively. NASDAQ or NYSE. I prefer NASDAQ, but it really does not matter. I could trade anything, as it is not at all what you trade, it is how you trade it. I just feel personally that there are far more insufficiencies to exploit in stocks, rather than futures. Basically, it is easier for me to make money.
Ditto on what Steve said about your trading method being simple. It should be ultra simple; I know mine is, otherwise I could never execute it. You should be able to explain it to a ten year old in five minutes.
I use no technical analysis at all. I only use price action. I believe that technical analysis only pulls a trader further away from the only thing that matters-----price.
It is a rare event that I am not done trading by 11:00 AM. I look to exploit the price action at the open basically. I honestly do not care how anyone else trades or what anyone else is doing. I only care about my account and what works for me.
I use no position sizing or anything else that you will read about. I trade the same amount of shares every single day. Despite what you read about daily goals, I do set a goal of making 1% per day, on the money in my account. Yes, I do use 4x margin, but the 1% goal is simply on the money in my account.
So if you wanted to make $500 per day, you would need 50k trading at 4x margin. I consider myself a very mediocre trader at best. I just know what does and does not work for me. I personally think trading is easy, although it did not used to be. I had to sort out all the b#llshit on my own with no help from anyone. If I someone had explained to me what I know now, in the beginning, I could have shaved 13 years off my learning curve, as well as a lot of pain and frustration. I probably could have been profitable within 6 months.
I don't care for Steenbarger, but I would highly recommend the Douglas book. If your mind is not right, you will never be profitable.
Quote from bryan942:
Again, I just wanted to thank everyone who has posted so far. Before I made my first post here, I spent some time reading these forums and I was almost afraid to post because it seemed like anytime anyone asked a similar question, it was flooded with negative or overly critical responses. The responses I have received all appear constructive and both optimistic and realistic at the same time. Reading through everything so far, I can tell you what directions I am leaning and maybe ask a few more questions.
1. I think beyond a doubt, I need to spend some time paper trading before I jump in. Right now I don't have a ton of disposable income that I am willing to risk. I was thinking somewhere along the lines of 10k to start. Initial feedback appears that that will put me far short of what I should be starting with. I also would like to entertain the idea of simulated trading. Frank Thomas mentioned X-trader in one of his posts. Are there any other similar or more robust programs that can help me paper trade and keep a track record that I can look back on, or do i just stick to good ol' excel?
2. Also, I like the idea of swing trading, as it currently allows me to ease into this process. It also allows me to hold positions for periods of time that wouldn't require me to be in front of a computer all day, at least at first. Being that I will be working my regular job during the day, does it make sense to look at trading something like forex as opposed to equities, where the market is open beyond regular business hours or is this totally irrelevant?
3. I don't know really what the differences between a retail or prop firm are (this shows you how green i am), but am I wrong to assume that if I wanted to be a part of something like that, I would have to move to NY or Chicago ideally? Also, what kind of place would hire a computer engineer converted to business owner who has no relative trading experience?
I think my next step is to head to the local bookstore and investigate the suggested reading. I am gonna take the advice of learning the psychology of this business first.
If anyone else knows of any other great resources or has any other feedback for, please feel free to not hold back. I accept all forms of criticism
thanks
-bryan
This is still a major mistake. Going to the local bookstore is another step towards blowing your money.
Some of the advice here is useful. But the reality is, you are making a HUGE mistake. There are a lot of people offering you advice, who themselves are not making money.
Your are likely to put in a huge amount of time and money, and wind up MUCH poorer for the experience. And then you will still be not making any money.
Put your time and money into investing into your business. This is no place to make "an extra $200 - $400 a day."
RUN, WHILE YOU CAN. The reality is, this is the advice you will wish you followed, 2-3 years from now.
Take a look at this thread. Read the FIRST entry:
http://elitetrader.com/vb/showthread.php?threadid=95359
If everyone took the advise that the markets were too hard and the failure rate was too high there would be no successful independant traders. That being said, to me, the decision to get into trading is much like the decision to take a trade itself. If you weigh the risks and benefits of getting into trading, and the impact it will have on your existing business and the rest of your life, it may be worth the risk, or it may not be. Regardless the passion to trade can be a strong one, and you might regret never trying even if you do decide its not worth the risk... tough decision!
Bryan - here is a prime example of what could happen to you if you lose your money, so be careful. You could become bitter and post on message boards telling people the markets are rigged and there's no way to make money trading them.
There is one constant here on ET - misery loves company. Some here assume that since they could not make a living at it, then no one can. As Szeven said, if it was literally impossible to make money trading, no one would do it.
You know what's interesting about this thread you quoted as a reason to NOT Trade?
Now, if I was Bryan reading that, I would see A TON OF POTENTIAL. Either the glass is half full or half empty, right?
That same thread could read - by staying disciplined, I am a multi-millionaire. Trading is great. (Of course no one here would believe that, but it's so easy to pounce on the 'I give up' threads...) Again, misery loves company here.
steve0617 - that was some of the best stuff I've read on this board!
And I got a good chuckle at your "chicken house processor" comment.
When I'm out and don't care to talk about what I do with people I meet (for the same reasons you mentioned) I say I'm a chicken rancher from Tulsa. No lie, lol!
And I got a good chuckle at your "chicken house processor" comment.
When I'm out and don't care to talk about what I do with people I meet (for the same reasons you mentioned) I say I'm a chicken rancher from Tulsa. No lie, lol!