Reasonable yearly profit threshold and expectations

T

total_keops

Two questions:

1 - For all you hustling hard to become a profitable full time trader and make a living of trading, what are your realistic yearly profit expectations. Assuming you start each year with 30-100k and can use some leverage do you expect to make an average professional (IT, engineer type of job) salary (50-70k) or do you expect to make over 100k-300k or even millions per year? The reason you put so much effort into becoming a full time trader is money, I would like to know what are most people expectations. For those alreading trading full time for a living, how much do you think is a reasonable yearly profit (no need to put you numbers)?

2 - There are clear disavantages to be a full time trader over working for a steady corp job like the stress of trading, variable income, risk of capital, ... There are also some advantages like freedom, being your own boss, ... Considering both sides, what is the yearly profit threshold would you accept as minimum to quit a job and live of trading? Would you prefer earning 30k instead of 50k in a factory because you love trading or you would require over 100k because of the stress, risks and uncertainties?

I am curious if people here ever thought about it because I faced this choice years ago and decided to go back to the corporate world because my trading was not earning enough on a risk adjusted basis and I'd like to compare my numbers to others.
 
My numbers are:

1 - I think a retail trader starting like most of us are can reasonably expect to get to make 100-300k on average. Not a piece of cake but I think it's achievable.

2 - I was in the 50-70k salary range and would not quit unless I would expect to make 100k per year trading for a living. The risk of capital and the extra stress of trading is the reason why I would require to earn extra money.
 
My numbers are:

1. within three years of starting with 300 dollars my weekly commissions were more than my salary as an "engineer/writer" at IBM which had at that time 80% of the world market.

2. I stayed two more years. I did not experience stress while trading. I kept sweeping my account and I got married and got a lot of toys. I also went to Europe for summers. I moved to Grennwich, Conn a small wealthy community near NYC. I sailed competitively. Then I moved to Switzerland and came home to Bucks County,Pa.

With regard to the numbers in your OP, I have never axperienced those numbers even though I am speaking of the easy days of the 50's and 60's. In stock trading, I have had million dollar days. (I left on the table twice your highest number in Q2.)

If I did do work it was because I was asked and my trading was not a concern of places like EOP, UCSC, etc. I squeezed in doing what I wished. Usually I dated or married seven sisters college graduates. When women were admitted to Princeton I was chosen by a psych major from the first graduating class.
 
If you think trading is riskier and more uncertain than working for someone else and commuting to a job each, then you will likely find it difficult if not impossible to cultivate the mindset necessary for consistent profitability as a trader.
 
jh, when you made fortune world was different place. after war, level of corruption was much less and there was plenty for everyone.

this days things are different. hft will go even after $10 if it can. computer power is near free. corruption in western economies is at breaking point.

I had same dilemma as op and also decided in favour of work. In meantime I improved and cleared my mind.

I think going for 300k year is stupid. If you have winning system that can take size, one has to go for rich.
 
Quote from toolazy:

jh, when you made fortune world was different place. after war, level of corruption was much less and there was plenty for everyone.

I completely agree with you. Making money was so easy then. No PC's no software no automated analysis, no computer to make charts. None of that stuff to get in the way of doing everything by hand.

If I wanted a sailing yacht I just when down to the Fairfield bank and trust and got a 2 year loan interest only and two years later walk out of the bank fully paid off and have more capital left over than the boat cost. It was a ball then. My oldest couldn't sail for more than two weeks in the summer (3 months old) or he would lose his appatite sleeping below decks beingg lulled by the waves hitting the hull (four ton keel). Once I tripped over the antenna on my sighting radio and had to repair it with aluminum foil. What good is a 1,000 North brand compass if you can't triangulate coastal radio stations.

I had to make copies of my B size vellum master as brownlines on a blueprint machine. Open high low close and volume on 30 stocks sheets was a breeze to pencil in and the data came early the next morning before open.

Dialing the phone was fun too. Just dial all the numbers and keep a finger in the last digit. Lightening fills on the call backs.

this days things are different. hft will go even after $10 if it can. computer power is near free. corruption in western economies is at breaking point.

Hey it IS different now. we have e mini's on indexes. there is no odd lot charge of an 8th. I press this button on this grey box and a CRT or flatscreen lights up.

I can crash any platform by using too many math expressions. (everything can be automated as hilights but platform suppliers don't have adequate charting capacity.

When I'm running 100 contracts or 100,000 shares I can't see anything less than the 1,000's of dollars place holder. It is worse than a 4.00 gas pump. I have had to reject 100 dollar bills handed to me for pocket money. The banks try to unload the counterfits they get. I had a credit card blocked in HI; the bank said they called my house and I wasn't answering so they blocked the account.

I can see that I only have to press the button and 11 accounts take the profit segment automatically by being "linked-in' to one master account.

I could add your account in about 15 minutes with customer relations (with them running my trading PC and doing the nitty gritty) It is as easy to trade your account as it is to trade my account since it is automated..

Try finding a master mechanic who can match fuel injectors for V-12. what happens when you notice the 12 speaker system is foggy?

I had same dilemma as op and also decided in favour of work. In meantime I improved and cleared my mind.

I think going for 300k year is stupid. If you have winning system that can take size, one has to go for rich.

My whole life is sheets of partial fills every day. I buy 3 ring binders by the dozen (6.88 for 6). I slave over punching paper and loading new ink carts)
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Toolazy:

I guess it ll comes down to the symptoms potential traders have.

In CW type trading, there are so many unknowns.

Humans have a sophisticated survival system. It really works quite well.

When you go to big money firms you see this survival system at play. Mostly it centers on bullshiting clients successfully. Clients are always a revolving door thing. Keeping a client only works if they are terrifically stupid.

20% a year is a half a day of trading when dealing with what I grewup with.

I do not deal with Freezing as in the Lizard Syndrome. I do not have the symptoms mentioned in the Behavioral Finance home page. This stress you guys have all the time is emotional and caused by doing betting when you do not know what is going on.

Fear , anxiety and anger come from ignorance of the system of operation of the markets. A human deals 100% with this internal self bullshitting all the time.

Flee or fight is always on the table. Fighting as we see is done by the financial industry by inventing more and more bullshit instruments not regulated by those who look out for the ignorant man in the street and legislators.

Fleeing is totally rational when a person's emotional system is being truthful.

The financial industry is based on comissions and fees. academia is not capable of the intellectual pursuits required. there is zero incentive from any funding source.

Take the NSF. Look at the bullshit research they fund. I know the NSF down cold and have been a "program of the year" at NSF (The kickoff of the environmental movement back in those easy research days). Congress cannot fund rational reaearch since the financial industry has its lobby way out powering Congress.

I was lucky.

I had the ability to discern the system of operation of the markets. Generally, it is unbelievable in the academic world. But I was recruited by Wharton since they need "names". I checked in occasionally and I did stuff on campus and in the Delaware Valley. I was recruited to run the research at Drexell (half time) and concurrently to run Penn's College of General Studies (half time). I didn't; my wife could not tolerate my absences.



The system of operation of the markets is simple and finite. Extracting the full offer continually is easy to do.

By dealing in terms of finite maths and by understanding the whole set of market elements, only one possible system emerges.

Systems are structured, they have operating processes. The operating processes are best efined as orders of events. (time is not a variable). outputting of results can only be described as an effectiveness and efficiency measure.

"Good enough" is so far out of the range of "believable" possibility that it is assured that NO ONE is going to do research or do system's analysis ever.

The wizard books are very cool descriptions of people who did see the markets working and they partnered with the markets.

BUT then there is the sophomoric LTCM bullshit approach and so on.... This type of fooling around on corporate levels kills all potential for solving problems using capital.
 
Quote from total_keops:

Two questions:

1 - For all you hustling hard to become a profitable full time trader and make a living of trading, what are your realistic yearly profit expectations. Assuming you start each year with 30-100k and can use some leverage do you expect to make an average professional (IT, engineer type of job) salary (50-70k) or do you expect to make over 100k-300k or even millions per year? The reason you put so much effort into becoming a full time trader is money, I would like to know what are most people expectations. For those alreading trading full time for a living, how much do you think is a reasonable yearly profit (no need to put you numbers)?

2 - There are clear disavantages to be a full time trader over working for a steady corp job like the stress of trading, variable income, risk of capital, ... There are also some advantages like freedom, being your own boss, ... Considering both sides, what is the yearly profit threshold would you accept as minimum to quit a job and live of trading? Would you prefer earning 30k instead of 50k in a factory because you love trading or you would require over 100k because of the stress, risks and uncertainties?

I am curious if people here ever thought about it because I faced this choice years ago and decided to go back to the corporate world because my trading was not earning enough on a risk adjusted basis and I'd like to compare my numbers to others.
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Im a minimalist, I would keep trading if I consistently make 2000-3000 a month. I love the challenge, more money makes it better, but why go work for the man when you can trade from the comfort of your home and only have to shave once every 10 days? You have the freedom to live anywhere in the world with a decent internet connection.

Cant make enough to live good in the states, move to a place where 2-5k a month is alot of money!

But if you are making money profitably every month would you not be able to up your size per trade? Most important is consistency.
 
Quote from jack hershey:

I do not deal with Freezing as in the Lizard Syndrome. I do not have the symptoms mentioned in the Behavioral Finance home page. This stress you guys have all the time is emotional and caused by doing betting when you do not know what is going on.

Fear , anxiety and anger come from ignorance of the system of operation of the markets. A human deals 100% with this internal self bullshitting all the time.
More...
above is correct, however I managed to move on from that point.

Based on your writings, I am having second look into volume as indicator for insight into mass behaviour. Always like to derive from first principles :) getting there is more fun than being there.
 
Quote from NoDoji:

If you think trading is riskier and more uncertain than working for someone else and commuting to a job each, then you will likely find it difficult if not impossible to cultivate the mindset necessary for consistent profitability as a trader.
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say 10% unemployment - that means 90% are actually making money..trading is the other way round ..if one thinks trading is not riskier one is only fooling himself..
 
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