Quote from candletrader:
Unlike dreams, woolly assertions, and fancy arguments, the only way a trader will find out if he can average 4-6 points over the long-run is to trade over the long run and work out the numbers (over a few years with simple money management, any trader averaging 4-6 pts per contract per day will be richer than a small country)... any newbies here parading themselves as hardened veterans are in for a rude awakening a few years down the line when their notions of extreme wealth based on their proposed 4-6pt average, in all probability, fails to materialize...
In my view, there is most definitely a positive correlation between:
1) mathematical inadequacy and wild claims of multiple points per contract per day long run averages
2) newbie status and such claims
Your mental disconnect is marvelous. Everyone here knows that trading accounts are kept in a range of values.
You have a surplus of capital that is unused in yours as you tell us in the poll you conducted. Trading indexes certainly isn't the main game in town.
People have capital. They use it to capitalize assets. These include:
Businesses, homes, gliders, boats, cars, furnishngs, and so on down the line. Sometimes we can't buy what we want. I failed to find any star rubies (unmounted) in the usual places shopped before for them. No supply anymore.
There are other places that are financially based for money to be placed. Protection, Tax deferment, incentive locations, locations for future growth. Illiquid applications of capital are possible.
Long term family funds and such fit into the picture too. Family material loans to museums (check out the early american furniture in the Metropolitan in NYC; it is an asset on loan. A Manhattan dairy farm never sold for real estate profits turns out to work quite well as a long term land lease for builders of office buildings. Just look for the bronze plaque on the rows of buildings.
What do you do with investment accounts? You may picture these as segments and under asset alocation management for handling the time constraints associated with them. Sets of investment rules apply.
You must have read Gary Smith's biological and trading accounts in the books he has written. This is routine for many people like Gary Smith and those of his caliber.
So you know where money made in leveraged accounts goes. And you know why it is taken out of the accounts.
What is this silly bullshit you lay out about small countries (See above) and what does it mean when you come up with a poll about what to do with extra money you can't trade in a commodities account? Some one here said they thought a lot less of you when you answered their Q's about how you do your edge. They made assumptions that you had some degree of sophistication.
Can you get over being hung up on this silly stuff you are pulling or are you just going to call us "dudes" and refer us to silly little pocket books that people give to teenagers for April Fool's day. Motley fools probably reviewed that book for the humor of it.
People size their commodities accounts according to the market's liquidity. When the accounts (split to begin with) get big, they consider how to move the money to other capital market applications. What do you think I mean when I say I have a 100,000 share cap (think $30/share) on the streams of money I trade every 6 to 8 days in the stock market?
Making 1 point on the ES03U daily H/L range? Why would any person in the world ever consider 1 point a day as a daily net earnings target. It is a gross daily earnings target that is a loser (below break even) for many edge trading strategies.
There is no one that can talk about 1 point a day without putting it in a context. Think about a 1 point gap... It is the first time you ever did....lol Did you see that four tick gap up??? Was that a days long term average profits?? Did you see that? Did you reverse on that 1 point gap up? damn I I missed the retrace too. I'm going to go right in now to catch the 1 point trend as it resumes the main 1 point gap up trend. Damn that spread is 25% of my long term average again today. I hope it drops to a lower spread than 25% of my long term average.
You have 20% draw downs and you make 10 points once in a while. 20% of what? 20% of the 5,000, the 10,000, the 20,000 per contract. Damn, it looks like 20% is a couple of points or so.
With some crude money management, you will soon both be rich enough to financially outgun a small country...
