Making full time trading viable

[qlai]

if it's automated i see some comments it may not be that's a no go.

You are saying that if it cannot be automated, you are not interested?

 

[helpme_please]

I have developed a day trading strategy which has a good positive expectation. My objective is to re-enter the full time independent trader space, but my trading capital is not sufficient to make a living. In order to build a live track record, and create a basis to raise third party funding,I need to abandon current employment - this is not viable due to family/living expenses obligations- any suggestions to move forward?

The answer is obvious. If your trading capital is not sufficient to make a living, then don't quit your job. Continue working at your job to build up the capital first.

The right questions to ask is ... if you hate your job so much that you are willing to do day trading when it is not even enough to earn a living, perhaps you should try looking for a new job but the new job cannot be full-time trading because your capital is not large enough.

 

[MarkBrown]

You are saying that if it cannot be automated, you are not interested?

sadly i can not use it if it's not completely automated and risk less than 1 point per contract es (4ticks) or rty (10 ticks) etc. win rate is not important if the profit factor is 1.4 or better

 

[Truth Searcher]

The answer is obvious. If your trading capital is not sufficient to make a living, then don't quit your job. Continue working at your job to build up the capital first.

The right questions to ask is ... if you hate your job so much that you are willing to do day trading when it is not even enough to earn a living, perhaps you should try looking for a new job but the new job cannot be full-time trading because your capital is not large enough.

Good perspective- thanks.

 

[Truth Searcher]

Let's look at your situation:

Thanks for your thoughtful response. A couple of points:-

- trade entry, although manual,does have auto bracket orders for stops and targets
- strategy based on British Pound futures not ES
- the return needs to be judged over a year, not a day
- I agree that backtesting needs to be extensive and followed by live data testing
- the return per day would be 400 usd per day at 10 c not 80 usd
- the purpose of posting the thread was not to raise funds but to seek advice from others who may have been in my situation
- I am not claiming my system is wonderful- it has its rough patches and must be grinded out like other systems

Reading the thread we see you have a system that has only been back tested, if even that, that generates just $80 using 2 ES contracts that requires manual trading at a minimum of 7 hours a day. You also have a family to support.

You need enough capital to trade 10 contracts/day so that would be at least $100K to meet margin requirements with some buffer for losses, which could be higher as you never mention your draw down.

So you would need someone to not only back you up with at least $100K, but also an additional salary to pay for your family expenses during your start up unless again, your draw down is minimal.

RISK:

Primary risk is system has no performance record- and no news is bad news.
Next, I assume you have no automatic stops in place as you stated your trades can't be automated. At 10 contracts leverage, all it will take is a "surprise" market lurch against you to cause a big financial loss and greatly reduce your earning potential going forward. That's a HUGE risk for just a small net daily gain of just $80/contract. No automation means YOU are the potential point of failure and you MUST watch the screens 7 hours/day. That is a lot of time to slip up by getting distracted.


Ask yourself:

Would YOU be willing to stake someone with $100K+ on an untested system with no track record, that at best, provides just an $80/contract return that requires the trader to manually operate 7 hours a day?

The Elite Board seems to have quite a few "paradox" posters that have these "wonderful" systems that bank money, but not enough money to put it into action and therefore need "financial backing". And typically it's just based on some back testing where the person can't even be bothered to present at least 6 months of R/T performance data of actual trading even if just manually paper trading on sim.

Trading is one of the easiest to scale businesses there is, so if your system works, there's no reason why you can start with a minimum and scale it up over time as your profits accumulate.

There are too many legit investment opportunities for anyone to even think about backing an unknown person with an unknown system with no measured performance, and capped with such a low rate of return to add insult to injury.

 

[Truth Searcher]

I would not do this myself, but the following is technically an option if you need capital for trading.

Take out a personal loan for $30k and set aside two months of living expenses and put the rest in your trading account. That should easily be enough with the $30k you already have to be trading 10 contracts (intra-day) and have some draw down cushion. Now this is the important part...in the event that your account get's down to $30k, shut down the operation, pay off the loan and consider it an expensive learning experience.

Certainly an option thanks

 

[Truth Searcher]

What are you using for slippage values? Have you traded real time based on 2 lots? What is drawdowns based on 2 lot and based on 20 lots of correct back testing?

I have automation on Brit Pd, slippage in real time for stops sometimes are unnerving when there literally nothing on the Dome and doing a 20 lot. Sim trading often is false, just like backtesting can not be fully dependable, back testing gives one an idea of success. Plus if using time bars, it can't be a bar with open/high/low/close, has to be a bar with 60 seconds of each trade inside of it so you know whether your exit was triggered first or last.

If you have job outside of the time to trade, that will be your only option. Forget the subscription, people start of having slippage on regular basis won't stay long at all. You can try like Topstep or Gauntlet for having them fund you, but what you asking of the forum just don't see anyone funding you without 3 years of statements. And if they do fund you, you can expect they want 80% of the profits as this is highly risky since you unwilling to fund it yourself.

Good luck

Thanks. Note:-
I am willing to fund the process, I just don’t have enough.
Slippage has been factored in.
Agree that live trading is different to sim/ backtest. However backtest is the starting point for testing an idea

 

[Truth Searcher]

sadly i can not use it if it's not completely automated and risk less than 1 point per contract es (4ticks) or rty (10 ticks) etc. win rate is not important if the profit factor is 1.4 or better

Win rate is always important although it can be lower if the risk/reward ratio is high. However, low hit rate strategies can have bigger drawdowns and for longer, making them difficult to stick with.
.

 

[Truth Searcher]

sadly i can not use it if it's not completely automated and risk less than 1 point per contract es (4ticks) or rty (10 ticks) etc. win rate is not important if the profit factor is 1.4 or better

Can you define ‘completely automated’?
Why do you completely discount non automated trading?

 

[SteveH]

OP, you live in Ireland, right? If you have regular work hours, have you considered trying to trade the last 2 hours of the either the NQ, YM or RTY futures on the US market? Also, you could probably catch the 1st hour of the afternoon session (6:00 AM - 7:00 AM Dublin time) of the HSI and/or HHI futures which trade in Hong Kong.

You need more volatility, not more contracts. You're not making much per day net because of the poor volatility of the GBP.

First 2 hours of the US e-mini futures trading is a career on low contracts. Same with the HSI/HHI.

You didn't post what your avg win, avg loss (in pips is fine) and avg winning pct are. If your avg win / avg loss is 1.0 area, forget it. What you're doing (without me having to know any more about your system) is very difficult by hand. Like Mark Brown said, 1.4 or better is needed.

The padutrader fellow on these boards is your guide to what not to do in daytrading: DON'T trade poor volatility. Trade the best volatility you can find.