Questions from a non-trader

well i suppose what got me interested here was the underlying assumption being made that pro firms and their extremely active trading style offer a more advantageous means to earning a livelihood from the markets than the abundance of alternative time frames and styles available out there...

i was simply pointing out the limitations in that style...

however, as i've already said before, firms like yours and worldco etc etc can certainly be a valid place for people that want to trade certain styles with certain instruments, provided they have an understanding of the advantages and disadvantages of different time frames and styles etc, and also understand the probabilities of making it in those respective alternatives.

best
 
Originally posted by vvv
well i suppose what got me interested here was the underlying assumption being made that pro firms and their extremely active trading style offer a more advantageous means to earning a livelihood from the markets than the abundance of alternative time frames and styles available out there...

i was simply pointing out the limitations in that style...

however, as i've already said before, firms like yours and worldco etc etc can certainly be a valid place for people that want to trade certain styles with certain instruments, provided they have an understanding of the advantages and disadvantages of different time frames and styles etc, and also understand the probabilities of making it in those respective alternatives.

best
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vvv....great post
 
Originally posted by stock777




Hmmmmmm, I need to meet some 'o dese guys.

Let's see, how about a nice LONG grueling stretch of performance. 3 years seems right. After all, we want to be young enough to spend the millions we'll be making.


Now the guys that can only muster a feeble 10% a month , with a starting stake of only $50,000, well, they can expect to have the modest sum of $1,545,634 after the 36 months are up. Not bad, beats flipping burgers.

And the really GOOD traders, the 20% a month guys , like the ones that post here :D , they need to find a good mattress to hold their $35,440,093.


Good thing only 10% of traders are doing this, otherwise it would be really hard to make living.
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ok ok I was just trying to bring some realism to T/A_Bo's post stating 10-20% was an average return for all traders.

I guess I wasn't "real" enough;)
 
Originally posted by vvv
of course the bottom line is that all you're talking about, don, is leverage...

sthg every futures or fx trader has access to who goes to a broker and opens an account...

i believe i've read somewhere that your traders have to put up usd 25K...

and with those they then have access to leverage ...

once, however, the usd 25K have been decimated that's it and out the door...

therefore, everything comes down to the original equity of 25k and positions that are sized in accordance with the equity at risk.
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vvv,

you try to make the very same point I made earlier. But Don keeps on skirting the real issue here. ABuse or use or whatever term he might say, basically Bright is providing HUGE HUGE leverage for its traders/customers. Otherwise, the 25K deposit can't generate(normally at least) $5K/wk salary like Don said without that huge leverage.

As we all know, leverage has upside as well as the devastating downside. And that stat is for people who are doing it right and the market cooperates. If it doesn't or something goes wrong, the $25K can easily be wiped out to support positions that would generate $5K.

just a thought at the real issue here...

trader99
 
Originally posted by trader99


you try to make the very same point I made earlier. But Don keeps on skirting the real issue here. ABuse or use or whatever term he might say, basically Bright is providing HUGE HUGE leverage for its traders/customers. Otherwise, the 25K deposit can't generate(normally at least) $5K/wk salary like Don said without that huge leverage.

trader99
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Can a trader with $25k make $5k a week? It really depends on the methods they use. Just for an example, let's say you only hold one position at a time. Retail brokers give you 4:1 leverage these days, enough to buy 2000 AMAT @ $50. Let's say you have a methodology that on average gives you 10 trades a day. 11 are winners, 9 are loser. The 6 winners get you 20cents (again on average) and the 4 losers lose 15c on average (not a totally unrealistic risk/reward scenario), factor in commissions and....you do the math.

Is risking $300 per trade too much risk? At 1.2%, maybe, maybe not. That's more a personal question, because it depends on what you, as and individual can tolerate.

On paper I make it seem sooo simple, of course, the reality is a lot more difficult. Difficult, but not impossible. Even in today's supposedly trendless markets (I'm in them everyday and yeah, I agree, they are tough) there are still plenty of opportunities (and plenty of different methods). And incidentally, I've heard people bemoan their difficulties in getting filled and I just don't get it. In any of the Naz stocks I routinely trade (AMAT, KLAC, VRTS, QLGC, QCOM) getting filled just is not that difficult at all.


Do you really need 10:1 leverage? I suggest that if you are only trading one position at a time there's no way you'll need that much leverage.

And I really have to disagree with the assertion that "traders" aren't interested in compounding their returns. BS. If your only objective in trading is to make a certain dollar total per year from trading, then, yeah, you probably aren't interested in compounding. If, however, you want to make the "big money" as (I think) vvv said, well, I think your sole concern should be at what rate you are compounding your money. Of course, you are not going to be able to do it by day trading, or very short term trading, (your size would just be too big), you'd have to look at a longer time frame, and your "rate of return" would fall as a consequance.

Daniel
 
Originally posted by trader99


vvv,

you try to make the very same point I made earlier. But Don keeps on skirting the real issue here. ABuse or use or whatever term he might say, basically Bright is providing HUGE HUGE leverage for its traders/customers. Otherwise, the 25K deposit can't generate(normally at least) $5K/wk salary like Don said without that huge leverage.

As we all know, leverage has upside as well as the devastating downside. And that stat is for people who are doing it right and the market cooperates. If it doesn't or something goes wrong, the $25K can easily be wiped out to support positions that would generate $5K.

just a thought at the real issue here...

trader99
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That is the game.
 
Again, not to belabor this, but "use" is not "abuse" - and there is a major difference between utilizing capital (as in entering 50 opening only orders) vs. using 10:1 or 50:1 ratio to equity.

I think that most of the above comments are right on, I just hate to think someone is not getting a complete answer from me (and I really don't try to "skirt" anything...I'll give my best answer whenever possible).....

Use of capital is a major benefit for professional traders (on exchanges, on block desks, in firms, etc.)....that is all I'm saying.
 
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