making a living v. getting rich

[Scientist]

Quote from axeman:
Tony Oz mentioned in one of his books that because of
similar isisues (opening 50% lower the next day after horrible
news for example ), he never uses more than 25% of his capital
on any one stock, no matter how tight his stop is.

Absolutely! I didn't know Oz's book, but my rule is 25% of capital as absolute maximum for scalping. Also, with many particular stocks (internet stocks like NTES, SOHU - great for scalping because of less experienced DT's / MM's), I have a limit of $20,000-$50,000 per trade, in order to avoid liquidity issues. If you trade INTC or MSFT, of course it doesn't matter. But who would?

There's no point in maxing out your account for scalping, anyway - I generally have 5% liquidity, 70% in day trades / swings and 20-25% in scalps, which makes a good balance for me.
- However, the scalping, although less than 1/4 equity, makes me more money than the day/swing positions many a time!
It's definitely worth looking at for an experienced trader.

This makes sense.
I think the same should be considered even when scalping
a stock for a few seconds. You could be that one unlucky
trader that gets caught at just the right time, and you KNOW
the SPEC isn't gonna let you out of that trade ( for NYSE) when he is trying to cover his ass during a mad rush.

Maybe it's a specific NYSE problem? I don't actually scalp NYSE - Is it any good for scalping? I mean, you don't get the sort of panic volatility that you would get with nasdaq due to its lightning fast & automatic execution, would you?
Correct me if I'm wrong.

~Scientist

 

[indahook]

Quote from baggerlord:

I have a completely different definition of rich. I make less than 2k a month, but I have my own place, my own car, anything I really want, and I don't work. (I run a small biz that is profitable and am just starting to work on my trading). My day consists of working 30mins and then going skiing. I am moving to a ski resort in a few weeks. By your guys definition I am broke-ass poor, but I feel rich.

DITTO DITTO DITTO


Preach on brother bagger!

 

[Scientist]

Quote from baggerlord:

I have a completely different definition of rich. I make less than 2k a month, but I have my own place, my own car, anything I really want, and I don't work. (I run a small biz that is profitable and am just starting to work on my trading). My day consists of working 30mins and then going skiing. I am moving to a ski resort in a few weeks. By your guys definition I am broke-ass poor, but I feel rich.

Your words on golden scales. I know a lot more unhappy $-rich people than happy ones.

What's the point in being loaded if you're not happy?
What's the point in being loaded anyway?

~Scientist

 

[Ditch]

Anybody know the feeling of living in a golden cage? That's how i felt in my corporate high-profile job. At a point in time i decided to give it all up. i didn't have any clue what i was going to do for a living back then, but i knew i couldn't take it anymore. When i finally ran into the e-mini's i was as poor as a church rat. i wasn't far from being homeless, so i had no other choice than grind it out. now i can start thinking of becoming rich.

 

[Whamo]

Quote from marketsurfer:

we all know about money management and grinding out profits day in and day out--- you will make a good living at this game with skill BUT one will never get rich without taking extraordinary risk. this is ofcourse if you are not already wealthy when you started. any thoughts ??

best,

surfer

In my opinion, one can get monetarily rich (at least $1 million in the bank over and above retirement accounts) without taking extraordinary risks if your living expenses are reasonable and your trading is consistently profitable. I think this can be done with either stocks or futures but given the additional leverage it would be easier to do with futures.

 

[Thunderdog]

Marketsurfer,

I don't know the answer to your question, but I have heard it said that the FASTEST way to make a small fortune trading is to start with a large fortune.

Regards,

Thunderdog

 

[bobcathy1]

My first year I traded to get rich,
Now that I am smarter, I just try to grind out a living one trade at a time.

 

[prox]

Quote from candletrader:



I disagree... you can change your lifestyle through either (for better or for worse )...

Yep, nothing like eating Ramen for breakfast, lunch and dinner.

 

[Monsoon]

Quote from baggerlord:

I have a completely different definition of rich. I make less than 2k a month, but I have my own place, my own car, anything I really want, and I don't work. (I run a small biz that is profitable and am just starting to work on my trading). My day consists of working 30mins and then going skiing. I am moving to a ski resort in a few weeks. By your guys definition I am broke-ass poor, but I feel rich.

bingo

 

[vanilla2]

lol, yes, ramen. oriental flavor is my fave, although once i saw chicken curry and it rocked, but then i never saw it again. recommend adding an egg as you cook it. lovely.