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Making a living with a $30K account
- Thread starter l2tradr
- Start date
Quote from l2tradr:
Hi,
A friend of mine is wondering if one can make a living trading the YM or the ES with a $30K account. He's been trading stocks for 5 years, with approximately 60% yearly returns (day-trading, no margin). Great money management in place, with very low drawdowns over this period.
He wants to trade mini futures for a living (currently works in the evenings). Is it possible for him to make a living with a 30K account? He has more money but wants to trade only 10 contracts intra-day.
Do you guys think that it's enough capital to achieve this goal? His living expenses are less than $2K a month and he could always go back to work if things don't work out.
Any advice for him? My opinion is that it would be very difficult to do it, but he insists that he can.
Thanks
The answer is right here, in your own numbers. Do a simple cash flow analysis and you should understand it yourself.
For example.
Say you currently have 30K in your trading account after 5 years of trading.
For the past 5 years, you have had 60% yearly return on your trading funds.
Each year you have taken out 24k to live on and left the rest in the account for trading for the next year.
A simple DCF analysis will show you that you must have had around 39K when you started trading 5 years ago.
Now, what you need to ask yourself is:
1. Could you sustain the 60% return on a yearly basis to infinity including drawdowns?
2. Would your needs remain constant to allow you to live on 24k forever? Note that I assume that 24k covers all your needs including taxes!
3. Note that even if all of the above is true and nothing else changes, you will still run out of cash in just 3 more years!
There you have it. Good luck.
Happy trading.
All you're doing here is broadcasting the fact that you've never been on a trading floor, never set foot in a trading company, never worked with anyone who was successful and probably never will. I don't mean these words to be mean, but maybe it would benefit your trading to call Don Bright and ask to come out and visit his outfit. I've never met the man, I have no idea who trades for him or what they do, but I would bet a very large sum of money that you would find traders there that are profitable beyond your comprehension.Quote from rcanfiel:
Yes. Fantasy vs. Market Reality
Again, this is absurdly different. Everyone who trades has the technology to capture the market every day!!! Good lord my man, how can you not see this? YOU need to learn how to pull out small pieces of profit without becoming a causualty. I'm going trying to follow in the footsteps of any ONE of the people I've met who have absolutely destroyed the markets by your standards. Aim for the bottom rung buddy, I hope you can climb up a couple from there.A man can stare at the Sun, and say "look at the potential" but we still don't have the technology to harness it profitably yet for all energy needs. The market does not yield its potential to anyone. You need to learn how to pull out small pieces of profit, without becoming a casualty.
Stop reading Hershey and start reading books that actually offer some hope.
I benchmark based on applying statistical analysis to the methods I use, to see what they offer
I don't understand how anyone can look at Hershey, and accept anything that comes from someone who refuses to submit his constant braggado to testing. The one time he did, he apparently stumbled.
That's because you've never been on the other side and are totally incapable of comprehending what it's like. If you could, you'd realize it's a simple thought excercise to determine why he doesn't post his blotter. Everyone who asks this of him has this bizarre stance that HE owes THEM something. He owes you absolutely nothing. The information is there, the support system is there, YOU have to do the work to find out if it works or not.
TNG
Quote from daveb351:
Suggest he reads " Trade your way to Financial Freedom", by Van Tharp. Money management & having a trading plan is the key. Never enter a trade where the reward is less than 2X risk...if he adheres to this he can do it.
This seems unrealistic to me. Can someone explain how you can know this before you get in?
Quote from thenewguy:
All you're doing here is broadcasting the fact that you've never been on a trading floor, never set foot in a trading company, never worked with anyone who was successful and probably never will.
I worked on one of the world's largest electronic trading floors, in an Investment Bank within Primer Brokerage and Derivatives, have been trading for over 20 years and find you to be very naive. And your powers of observation seem very misguided; you tend to make assumptions on things you cannot possibly know.
Again, this is absurdly different. Everyone who trades has the technology to capture the market every day!!! Good lord my man, how can you not see this?
And how many hundreds of thousands have you made from this exactly? You seem to be speaking from reading what others have said.
YOU need to learn how to pull out small pieces of profit without becoming a causualty. I'm going trying to follow in the footsteps of any ONE of the people I've met who have absolutely destroyed the markets by your standards.
Who, Jack? That is a pitiful thing for you to say. And how many hundreds of thousands have you made from this exactly?
That's because you've never been on the other side and are totally incapable of comprehending what it's like. If you could, you'd realize it's a simple thought excercise to determine why he doesn't post his blotter. Everyone who asks this of him has this bizarre stance that HE owes THEM something. He owes you absolutely nothing. The information is there, the support system is there, YOU have to do the work to find out if it works or not.
You seem far away from entering the land of profitability. Jack doesn't post, because Jack likes to be seen as a guru. But he is a paper guru. The one time he appears to have offered evidence, he was down >25%. He avoids tracking because he knows what will likely happen. I just challenged him to go at it with me and ProfIllogic and he offered a bizarre excuse that netted out to that would be too profitable.
Stop reading what others have said and learn how to trade. Spend less time informing others what you don't know yourself.
TNG
Quote from thenewguy:
All you're doing here is broadcasting the fact that you've never been on a trading floor, never set foot in a trading company, never worked with anyone who was successful and probably never will.
I worked on one of the world's largest electronic trading floors, in an Investment Bank within Primer Brokerage and Derivatives, have been trading for over 20 years and find you to be very naive. And your powers of observation are seem. You don't grasp much of what has been said.
Again, this is absurdly different. Everyone who trades has the technology to capture the market every day!!! Good lord my man, how can you not see this?
And how many hundreds of thousands have you made from this exactly? You seem to be speaking from reading what others have said.
YOU need to learn how to pull out small pieces of profit without becoming a causualty. I'm going trying to follow in the footsteps of any ONE of the people I've met who have absolutely destroyed the markets by your standards.
Who, Jack? That is a pitiful thing for you to say. And how many hundreds of thousands have you made from this exactly?
That's because you've never been on the other side and are totally incapable of comprehending what it's like. If you could, you'd realize it's a simple thought excercise to determine why he doesn't post his blotter. Everyone who asks this of him has this bizarre stance that HE owes THEM something. He owes you absolutely nothing. The information is there, the support system is there, YOU have to do the work to find out if it works or not.
You seem far away from entering the land of profitability. Jack doesn't post, because Jack likes to be seen as a guru. But he is a paper guru. The one time he appears to have offered evidence, he was down >25%. He avoids tracking because he knows what will likely happen. I just challenged him to go at it with me and ProfIllogic and he offered a bizarre excuse that netted out to that would be too profitable.
Stop reading what others have said and learn how to trade. Spend less time informing others what you don't know yourself.
TNG
You're right, I know very, very little about you. If you have the kind of experience you say you have and have not met anyone in all those years of the calibre that you seem to think is "impossible" then I am totally blown away. Honestly. To think that I've had the experiences I've had, with so many different groups purely by luck, in such a short time is almost mind numbing. To think that you some how missed them all in all that time and experience literally blows my mind.Quote from rcanfiel:
I worked on one of the world's largest electronic trading floors, in an Investment Bank within Primer Brokerage and Derivatives, have been trading for over 20 years and find you to be very naive. And your powers of observation seem very misguided; you tend to make assumptions on things you cannot possibly know.
I'm speaking from direct observation of being very closely involved with people who perform at this level for many years. All I'm arguing here is that it's possible. I never said it was easy, or that I could do it, although I don't see any reason why not. I will say that it's harder than I thought, and the difficult part has been dealing with the personal issues.And how many hundreds of thousands have you made from this exactly? You seem to be speaking from reading what others have said.
Who, Jack? That is a pitiful thing for you to say. And how many hundreds of thousands have you made from this exactly?
Didn't you accuse me of making assumptions at the beginning of this post? I never said Jack. I have no idea if his stuff works, that's why I'm looking into it. That's what rational, motivated people do. The things he talk about are MUCH closer to my actual experiences than the way you talk, however.
You seem far away from entering the land of profitability. Jack doesn't post, because Jack likes to be seen as a guru. But he is a paper guru. The one time he appears to have offered evidence, he was down >25%. He avoids tracking because he knows what will likely happen. I just challenged him to go at it with me and ProfIllogic and he offered a bizarre excuse that netted out to that would be too profitable.
Stop reading what others have said and learn how to trade. Spend less time informing others what you don't know yourself.
Again, the point flies right over your head. Jack posting his blotter, or whatever, would not prove a damn thing to me. I already know what he's talking about is possible, or close enough that I'm not going to split hairs over the details. The only question remaining is: "Can I do it?". I'm not even talking about his methods, but any of the fantastically profitable methods I've seen in the past. What would knowing that he could trade accomplish for me? Would that garuntee that I could do it?
You got stuck trying to figure out if what he is saying is possible. I (apparantly??) had the great fortune of being shown that without a doubt very early in my career. Going back to my original post, my only job now is to clear out all the crap keeping me from getting there. It's a very tough job (maybe I come with a lot of baggage??)
And in case you think I haven't thought of this, I'm well aware that you may just be fishing for some info about the groups I've worked with. I'll save you some time and say that I'm not going to divulge any information about what they were doing, or what they are doing.
Anyway, I hope I haven't irked you in anyway with this discussion, and I wish you whatever success you desire in this endeavor.
TNG
vectors101
Guest
Quote from thenewguy:
I'm speaking from direct observation of being very closely involved with people who perform at this level for many years.
I think the question was how many thousand of dollars you have made in the market.
Not what you heard from other people who said what they did.
Quote from vectors101:
because the guy doesn't even have $2000
The people I have met who have been extremely successful at trading have all followed the same path. This is my observations in a nutshell.
1. Educate yourself on the markets
2. Find something with positive expectancy
3. Leverage that up as quickly as a mathematically defined risk-adverse strategy will allow you to do (massive psych issues here)
4. Stop when you've pulled so much money out of the market that you feel the trouble isn't worth the reward.
People have so much trouble with #3 that it's mind boggling. #4 is the answer to all of RC's questions. You'll notice some steps that are missing, like #5. Put your system on collective2, which is shitty software, and the system probably won't work because your "edge" is taken away by ridiculous restrictions that people who can't trade have created; and #6 promote yourself like a goddamn jackass about how much money you've made. There are only negative results that can come from #5 and #6 to someone who's made it to either #3 or #4.
Everything Jack has written that I've read conforms to my observations. I bet he has a bit more than $2,000.
TNG