Reality for an Individual Trader
- Thread starter drader77
- Start date
It's all math, ..
1) you need enough of a initial balance to weather price variance.
Let's say you saved 10k.. that 10k took a few months to save.
2) ES is 50 per point,.. what's the usual range been recently.. under 10 points per session.
10 points = 500 bucks.. or 5% of your balance. Let's say your able to grab half that or 2.5%.. how many points can you risk to make 2.5%.. 1%?.. or 2 points...
If you can only risk 2 points and daily ATR dwindled to 10 .. you would end up playing the edges of the ATR.. if you play in the middle most likely you get chopped up.
If the long term trend filter indicates up.. you end up waiting for the bottom of ATR, with a 2 point stop. Only take longs with 2 point stop.
At the bottom of ATR look for breaks in vector direction, like trendlines or EMA crossovers.
To make it even more probable.. wait for fast market days,.. like FOMC/Econ reports. Key is to never go against you intraday trend filter.
http://www.screencast.com/t/CPdTSn4rmp
There are like 12 videos there.. .wmv file .. full download is needed. Good to watch price action and how the ticks fly.
So it's all math... if you loose 1 percent on each decision,.. realistically if you kept banging away on high probable days.. you can make 20 points.. 10 stop outs you loose 1k.. play high probable days to make 20 points.
Library videos are all demo videos.. still valid to see how transparent price action is on news days.
You would need 20 high probable days to double your account. There are probably about that many in a whole year. Trade only those days,.. and work or study the rest.
If your truely crazy.. reduce your capital to 10 decisions. Meaning you risk 1k per decision. Or 10 contracts with (500 intraday margin)..2 points on 10 contracts is 1k.. you can make 10 decisions on a high probable day before blowout. 10 contracts 20 points.. 200 points.. or 10k.. account doubles each probable day.
http://www.screencast.com/t/JrHNltf9M
1) you need enough of a initial balance to weather price variance.
Let's say you saved 10k.. that 10k took a few months to save.
2) ES is 50 per point,.. what's the usual range been recently.. under 10 points per session.
10 points = 500 bucks.. or 5% of your balance. Let's say your able to grab half that or 2.5%.. how many points can you risk to make 2.5%.. 1%?.. or 2 points...
If you can only risk 2 points and daily ATR dwindled to 10 .. you would end up playing the edges of the ATR.. if you play in the middle most likely you get chopped up.
If the long term trend filter indicates up.. you end up waiting for the bottom of ATR, with a 2 point stop. Only take longs with 2 point stop.
At the bottom of ATR look for breaks in vector direction, like trendlines or EMA crossovers.
To make it even more probable.. wait for fast market days,.. like FOMC/Econ reports. Key is to never go against you intraday trend filter.
http://www.screencast.com/t/CPdTSn4rmp
There are like 12 videos there.. .wmv file .. full download is needed. Good to watch price action and how the ticks fly.
So it's all math... if you loose 1 percent on each decision,.. realistically if you kept banging away on high probable days.. you can make 20 points.. 10 stop outs you loose 1k.. play high probable days to make 20 points.
Library videos are all demo videos.. still valid to see how transparent price action is on news days.
You would need 20 high probable days to double your account. There are probably about that many in a whole year. Trade only those days,.. and work or study the rest.
If your truely crazy.. reduce your capital to 10 decisions. Meaning you risk 1k per decision. Or 10 contracts with (500 intraday margin)..2 points on 10 contracts is 1k.. you can make 10 decisions on a high probable day before blowout. 10 contracts 20 points.. 200 points.. or 10k.. account doubles each probable day.
http://www.screencast.com/t/JrHNltf9M
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OP asked about trading commodity futures... wtf does that have to do with calling "an IR-team"?
... And powerful IT and programming resources, and sometimes waived transaction cost, and powerful research and software applications, and an on average way higher iq, and an on average way better education, and more insight into market internals through access to other professionals in this space, and sometimes insider information, and plenty more funding, and, and, and.
Not saying non professionals cannot make it, but it's ludicrous to assume that a go it alone individual is not up against a massive challenge.
Not saying non professionals cannot make it, but it's ludicrous to assume that a go it alone individual is not up against a massive challenge.
I was correcting the smurf on his attempt to derail this thread with stuff about information asymmetry... keep your panties on mate, don't take excerpts out of context.....
You are welcome, it is the job of this and similar websites to keep a steady stream of new suckers flowing. Newbies, the excitable, the broke, the lazy, the hopefuls, in summary anyone who has not made it elsewhere in life. The very few who make it in this business would never ask questions like you have. They would have read and figured it out on their own. A 1 hour tour of couple threads would have given you all the information you asked about and plenty more. Do I try to discourage you? Perhaps but I am not able anyway. The sucking sound that never stops ensures me of this. After all you are providing the bread and butter on the tables for a whole group of "middle men" (that's as positive a description of the snake oil sales men and freeloaders and parasites in this industry I could come up with).
So in summary, welcome to the vast group of traders at ET. As you may have noticed, everyone here is a winner,even those who operate out of mom's basement.
So in summary, welcome to the vast group of traders at ET. As you may have noticed, everyone here is a winner,even those who operate out of mom's basement.
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Uhm... I'm an individual trader at the moment... (with professional background).. and IQ/programming skills/research abilities are individual skill sets...
ROFLMAO. You got that one! Pros and institutions are wrong much of the time. Plus they are really just fighting each other.
So am i so what? Can you afford Bloomberg, Reuters, Datastream? Do you colocate and trade off hardware rather than software applications for the absolute speed advantage? Do you get the inside scoop from talking to clients? Do you overhear the latest trends in the industry and you hear it first? If not then you are naturally disadvantaged as anyone who is not professional. Again I am not saying an individual non professional cannot make it but it is way harder as depicted in this thread. By the way even with programming skills you are up against an industry that employs hosts of developers to get them whatever a trader/Quant trader needs so a trader can focus on what he/she does best.
It is poor advice and outright ridiculous of some to suggest to a beginner that it's pretty easy, just "find your edge" and just "move to longer holding periods". Those with corporate interests who chimed in here really only wanted to actually mean "as long as you pay me your commission dollars and pay me for the suckers software application i am selling you"... Yes I am very cynical but it's because I believe I have seen it all. It's a suckers industry populated by mostly suckers, wannabes, parasite salesmen. Maybe 0.01% of all employed or working in this industry actually generate alpha. Yes, that is 1 in 10000 people with pretty decent education and IQs. As long as this TRUE picture is presented I don't mind the schnucks telling their story how "they got rich selling books and teaching others to trade"
It is poor advice and outright ridiculous of some to suggest to a beginner that it's pretty easy, just "find your edge" and just "move to longer holding periods". Those with corporate interests who chimed in here really only wanted to actually mean "as long as you pay me your commission dollars and pay me for the suckers software application i am selling you"... Yes I am very cynical but it's because I believe I have seen it all. It's a suckers industry populated by mostly suckers, wannabes, parasite salesmen. Maybe 0.01% of all employed or working in this industry actually generate alpha. Yes, that is 1 in 10000 people with pretty decent education and IQs. As long as this TRUE picture is presented I don't mind the schnucks telling their story how "they got rich selling books and teaching others to trade"
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@Zzzz1 sure all that helps, all I'm stating is that it's not a necessity as in the way OP asks.
As I said earlier, the way you trade defines what you need. I don't do algo's, so also don't have to co-locate. I hate the small speed delays sometimes... but I've had a fair bit of that when I was a pro too.
Anyway, if OP wants to put in hard work and learn... that's a good start. If he wants to go all-in with credit card debt, like other people high on the dumb-scale... (possibly this one too: https://www.elitetrader.com/et/threads/ym-magic.307470/)... than he's going to be f#Dked and this all is a waste of my and your time
As I said earlier, the way you trade defines what you need. I don't do algo's, so also don't have to co-locate. I hate the small speed delays sometimes... but I've had a fair bit of that when I was a pro too.
Anyway, if OP wants to put in hard work and learn... that's a good start. If he wants to go all-in with credit card debt, like other people high on the dumb-scale... (possibly this one too: https://www.elitetrader.com/et/threads/ym-magic.307470/)... than he's going to be f#Dked and this all is a waste of my and your time