Isn't using OPM the way hedge funds leverage up and then just keep 20% of the profits. Why keep 100% of lets say $100,000 when you can keep 20% of $1,000,000 IMHO. I mean minus the aggravation of daily reports to your partners you are still investing the same time and effort. As someone who only has $21k I've never gotten to the point where I had too much money to handle so maybe im talking out my ass for now, but I'd be eternally gratefully to the person or people who loaned me enough so trade with 100k... I understand where your coming from with doing it yourself but I will take months at best for me to reach 100k in this market isn't that wasted time?
Making $5K with $20K each month
- Thread starter PennyTrader
- Start date
I have been studying the markets for 1 year now and they are very tricky animals to master, however making 5K from 20K is possible and the lossers that say it is not possible are talking from bitter experience.
Firstly money management is the primary objective, period, second high probability trades with stops...always with stops. Lets see if I can show you guys and girls...
Suppose we have a 20K capital this means sound money management would dictate we only ever risk 2% of our capital on any one trade, so a max of 400 could be risked on any one trade and not a penny more.
Now, lets say we trade with a risk of 20 points, now I would say if you are risking 20 points you are a good trader with an eye on resistance and support, you understand elliot wave, you know that fib levels DO NOT WORK all the time, and you understand what the trend really means.
You also realise that a good trader goes for a 2:1 risk reward ratio minimum, pref 3:1. Now, lets say you only get 50% of trades right, you should be able to do that flipping a random coin in the air, actually if you do that you will lose 80% of your trades, I know I tried it! Understanding support and resistance, will allow you to be usually on the right side of the market, so maybe you can get to 50% winning trades 50% losser. Do the maths
Out of ten trades 5 lose 20 points =100 points lost
5 win @ average 30 point win=150 points won
NET 50 points per day
assuming you are busy trading and looking for 10 set ups a day which is hard work, but possible, so 50 points a day X 5=250 per week.
So 250 points X 20=5000 pounds/dollars a week, so lets say you spend half your time sleeping and trade two weeks out of 4 in a month, you still make 5K per month.
Trade often, don't get caught in one or two trades, look for high possibility trades, discard the chaff, use scanning software to find the trades, be strict with yourself, never adjust stops if the trade is in the wrong direction. Always scale your profits so you get a little of the table every day and finally understand what a free trade is, and use it.
To the traders that say this impossible, ask yourself are you trading correctly, because i will tell you now...you are not!
For the benefit of you guys please see the attached graph of the Pound/Dollar showing the possible ups and downs in the months ahead. The red numbers are the highs and lows, the little blue numbers are the weekly variations, only trade the down direction, so sell on the peaks of the blues. Be aware that some times the market does not turn on the date shown, it is only a guide, be aware that it could turn or might not, use an oscillator or MACD to assist, read the news and set your stops correctly, that means trade according to the 2% rule. Assume the trend is down, untill it proves it has turned (eg:higher highs and higher lows).
Firstly money management is the primary objective, period, second high probability trades with stops...always with stops. Lets see if I can show you guys and girls...
Suppose we have a 20K capital this means sound money management would dictate we only ever risk 2% of our capital on any one trade, so a max of 400 could be risked on any one trade and not a penny more.
Now, lets say we trade with a risk of 20 points, now I would say if you are risking 20 points you are a good trader with an eye on resistance and support, you understand elliot wave, you know that fib levels DO NOT WORK all the time, and you understand what the trend really means.
You also realise that a good trader goes for a 2:1 risk reward ratio minimum, pref 3:1. Now, lets say you only get 50% of trades right, you should be able to do that flipping a random coin in the air, actually if you do that you will lose 80% of your trades, I know I tried it! Understanding support and resistance, will allow you to be usually on the right side of the market, so maybe you can get to 50% winning trades 50% losser. Do the maths
Out of ten trades 5 lose 20 points =100 points lost
5 win @ average 30 point win=150 points won
NET 50 points per day
assuming you are busy trading and looking for 10 set ups a day which is hard work, but possible, so 50 points a day X 5=250 per week.
So 250 points X 20=5000 pounds/dollars a week, so lets say you spend half your time sleeping and trade two weeks out of 4 in a month, you still make 5K per month.
Trade often, don't get caught in one or two trades, look for high possibility trades, discard the chaff, use scanning software to find the trades, be strict with yourself, never adjust stops if the trade is in the wrong direction. Always scale your profits so you get a little of the table every day and finally understand what a free trade is, and use it.
To the traders that say this impossible, ask yourself are you trading correctly, because i will tell you now...you are not!
For the benefit of you guys please see the attached graph of the Pound/Dollar showing the possible ups and downs in the months ahead. The red numbers are the highs and lows, the little blue numbers are the weekly variations, only trade the down direction, so sell on the peaks of the blues. Be aware that some times the market does not turn on the date shown, it is only a guide, be aware that it could turn or might not, use an oscillator or MACD to assist, read the news and set your stops correctly, that means trade according to the 2% rule. Assume the trend is down, untill it proves it has turned (eg:higher highs and higher lows).
PennyTrader,
Stumbled onto your post last night and spent a couple of hours reading it in it's entirety which I've rarely done. You're doing what many of us are aspiring to, that is extracting from the slomarket for a living. You wouldn't be doing this if you didn't have the skills and kahunas that are required. Your win percentage is phenomenal and I'm sure your ROI is as well. Eliminate major blunders (JSDA) and you are there, same problem I'm working on.
A word of caution, we are in a bull market right now, even a knucklehead like me is make money. When the market heads south like last May to August, will the same setups/trades still work like they are now? My guess is probably not. We must be prepare for it.
Keep up the great postings. Hope I can pick up at least one useful thing I can apply. I'm inexperienced so it may take me a while to find it but I'm sure what you've posted can help me to be a better trader. Thanks for sharing.
I'm pulling for your. If I could bet, I'd put my money on you.
I just notice something, naysayers and doubters aren't posting anymore, I wonder why.
Check your mail.
Stumbled onto your post last night and spent a couple of hours reading it in it's entirety which I've rarely done. You're doing what many of us are aspiring to, that is extracting from the slomarket for a living. You wouldn't be doing this if you didn't have the skills and kahunas that are required. Your win percentage is phenomenal and I'm sure your ROI is as well. Eliminate major blunders (JSDA) and you are there, same problem I'm working on.
A word of caution, we are in a bull market right now, even a knucklehead like me is make money. When the market heads south like last May to August, will the same setups/trades still work like they are now? My guess is probably not. We must be prepare for it.
Keep up the great postings. Hope I can pick up at least one useful thing I can apply. I'm inexperienced so it may take me a while to find it but I'm sure what you've posted can help me to be a better trader. Thanks for sharing.
I'm pulling for your. If I could bet, I'd put my money on you.
I just notice something, naysayers and doubters aren't posting anymore, I wonder why.
Check your mail.
Wow, you must be under a lot of financial pressure. Wish you could get a loan to solve your immediate financial problems. It seems even 5K a month at this time is not sufficient. You certainly look capable of repaying everything in due course based on your trading records, but having to scale up your profit target to meet these huge expenses does not seem right: you shouldn't be trading under these kinds of pressure.
My prayer and thoughts are with you.
I've been following this from the start and find Pennytrader transparent in his trades and also generously transparent in his thought process. People tend to respect this basic honesty, so I suppose most early doubters do respect that too - which goes to show most ETers are basically rather decent people afterall in spite of earlier naysaying - which means there's still hope for ET?
Thank you all for the kind words and well wishes. Thanks for the PMs.
Have a great week everyone!
Have a great week everyone!
ESRG - 1.67 x 1.68, almost has one million shares traded today, so I could post on ET. I'm in 2K shares as a swing trade, target is $2+ in a few days. This is a trading tip from a friend, hope he's right again and don't ruin me.
DNDN - I like the setup here, if breaks 6.44 resistence, then shall see a nice pop to 6.49 and then 6.77.
DNDN premarket high is $6.65, $6.49 is the value price in premarket, $6.77 is the value price from a few days ago.
