Popular daytrading account size

[SimpleMeLike]

To extend coin flip exercise, I'd have them:

1. Tell them they'll have to make 2 decisions, as in trading
2. Bet heads vs tails (like long vs short)
3. If they win, what do they do next? Choices = cash out, or try to double/let it ride
4. If they lose do they take the loss and move on (smart) or let it ride (add to loser, wrong)

Hello KCalhoun,

I agree with you. It is very interesting exercise. I did it once, took a long time, but it forces me to journal my trades. That trade management is sooo important, because there are sooo many ways to exit a position.

That is good exercise of decision making and record keeping.

 

[SimpleMeLike]

You boys are just cannon fodder.

savoir,

Please explain what you mean by how I am a cannon fodder?

 

[schizo]

Use the $2K to trade stocks. Risk 1% or $20 per trade.

Do this until your account balance is $5K.

I thought you need $25K to bypass the PDT. Plus, what can you buy with meager 2K other than some junk penny stocks?

 

[BAT31]

Unless that's a girl, i try to run away from things like these in life.

Let's say a person is one of these geniuses that apply logic to this game :
(seen many times, good example noneless)

timestamped

That video was a classic. I am an IT professional (IT Support), and understand the software developer types-- arrogant, confident, smart, and very rules-based.

Dude thought he could read books on technical analysis and trade mechanically. It makes sense from his perspective, because programmers have been trained to think logically, systematically (i.e., Price is +3SD -> Sell).

Out of all the books he read, he didn't read about hedging through the use of spread trading.

Obviously, dude is several orders of magnitude smarter than me. However, I don't think I would lose 350K in the markets. I would probably go into deep depression if I did something like that.

 

[SimpleMeLike]

I thought you need $25K to bypass the PDT. Plus, what can you buy with meager 2K other than some junk penny stocks?

Yes, that is fine.

Put $30K in the account and only risk 0.06% per trade or $18 per trade.

The point I am trying to make is trade extremely small until you prove consistent profitability. Once you do that, then scale up.

A cocaine distributor not going to front me 1000 kilos of coke to sell after our first meeting right? No, he going to give me maybe half a kilo to prove my trust and how fast I can return a profit. If I do well, he may let may get 2 kilos, then 4 kilos, then 6 kilos, and on and on.

Same as trading, start small, keep the capital to the side for other business moves incase trading money take awhile to come.

 

[SimpleMeLike]

Unless that's a girl, i try to run away from things like these in life.

Let's say a person is one of these geniuses that apply logic to this game :
(seen many times, good example noneless)

timestamped

People got these very basics, - completely wrong.
Why would you need to start the living out of it - right away ?
Why it can't be a side activity, that you're either learning or something that makes an additional income to your regular salary.

And for that you don't need $100k.
Neither - $500k.

First learn & understand da hell are you doing.

,,You need 500k to start'' .
... ... ...

So, based on that, PDT should be moved from $25k to $500k. (the irony)
Catch one swing of 400% like $CHEF did, with $500 and you're already $1500 up.And that would take just... 1000 times less than initial suggestion.

,, When my team of engineers came to me, they told that the radio module will cost 100k. I said i need one for 10k. They said it's impossible. I said - i give you 12 months to make it possible.
18 months later, they came back, with a better module than NASA had and for 10k''

- Elon Musk
(details might be wrong, you get the idea tho)

That guy in the video is bullshitting, he did not lose no $350K, just an internet marketer get subscribers and likes to sale products and services. He did not show his broker account paperwork showing where he lost $350K

 

[luckyfnlou]

Yes, that is fine.

Put $30K in the account and only risk 0.06% per trade or $18 per trade.

The point I am trying to make is trade extremely small until you prove consistent profitability. Once you do that, then scale up.

A cocaine distributor not going to front me 1000 kilos of coke to sell after our first meeting right? No, he going to give me maybe half a kilo to prove my trust and how fast I can return a profit. If I do well, he may let may get 2 kilos, then 4 kilos, then 6 kilos, and on and on.

Same as trading, start small, keep the capital to the side for other business moves incase trading money take awhile to come.

I love the cocaine analogy!

I'm glad my early trading days were with small accounts so I understand what PDT and margin calls are. It'll be interesting if the new covid traders are staring out well capitalized and trading before they understand the risks. Time will tell I guess.

My greatest edge is I know I don't know it all so I'm always checking my 6.

 

[NotKnown]

From this exercise the trader will see and feel how important the math is in trading.

I am not a huge fan of the coin toss theory as it infers the market is some random beast to which it is not but I take your point that trading in itself is statistically based.

There are many things in nature that are unknown and so we develop tools to make sense of it all. Trading is no different. If you have the right tool set to measure what is going on, it all starts to make a bit more sense. The question then becomes "What are you trying to measure?" and "Is it profitable?".

 

[lovethetrade]

If you are really good in daytrading, you just need to trade the indexfutures and forget the rest of your huge list. How can you follow dozens of markets simultaneously?
I just watch the ES and with the leverage they offer your returns can be very high.

Does it make sense to do both then; automate so you can trade a diversified portfolio and manual trade an index?

 

[virtusa]

Does it make sense to do both then; automate so you can trade a diversified portfolio and manual trade an index?

Discretionary trader, so automation is impossible.