Starting with $10k

Hi All,

Thanks for the many replies! I know if I started with $10k and stayed in stocks and covered calls it would be a long road to wealth through steady returns and many years for the money to grow. If I ventured into options, I could make decent money after a lot of practice, but I would need to make it a full time job and prove a successful method. The returns could be sizable since options allow large leverage, but it could also lead to greater losses if they went the wrong way. I want to learn more and more about everything and right now am unsure the best way to make the $10k grow.
 
First you need lots of backtesting as 10k is very tough in almost anything you trade. But I would offer you explore Commodity Spreads meduim term. Learn how to trade them and margins are incredible lower than if you trade one outright.
 
Quote from Ted28:

Hi All,

Thanks for the many replies! I know if I started with $10k and stayed in stocks and covered calls it would be a long road to wealth through steady returns and many years for the money to grow. If I ventured into options, I could make decent money after a lot of practice, but I would need to make it a full time job and prove a successful method. The returns could be sizable since options allow large leverage, but it could also lead to greater losses if they went the wrong way. I want to learn more and more about everything and right now am unsure the best way to make the $10k grow.
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Weeklies are about the only place you will be able to get high returns consistent enough to allow you to grow fast enough to move into wealth. However, it's not easy and takes a lot of patience. I normally sit around for an hour or two waiting for a good opening. Then I normally am out of my position in thirty minutes or less. Sometimes my positions don't last more than a couple of minutes (best was 200% in 2 minutes). Having the willingness to sell and walk with a profit in pocket is hard to learn. Dropping a position because you were wrong is even harder and normally the hardest thing to do.

If you can find something that works and willing to see it through, you could end up being successful but there's no promise. It also helps to have no life and live with minimal expenses (early on).
 
Quote from treeHamster:

Weeklies are about the only place you will be able to get high returns consistent enough to allow you to grow fast enough to move into wealth. However, it's not easy and takes a lot of patience. I normally sit around for an hour or two waiting for a good opening. Then I normally am out of my position in thirty minutes or less. Sometimes my positions don't last more than a couple of minutes (best was 200% in 2 minutes). Having the willingness to sell and walk with a profit in pocket is hard to learn. Dropping a position because you were wrong is even harder and normally the hardest thing to do.

If you can find something that works and willing to see it through, you could end up being successful but there's no promise. It also helps to have no life and live with minimal expenses (early on).
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Thanks! Do you do covered calls on the weeklies, or just calls? Also, do you do weeklies on the big dollar stocks, like MA, PCLN, AAPL, ISRG, etc?
 
Quote from Handle123:

First you need lots of backtesting as 10k is very tough in almost anything you trade. But I would offer you explore Commodity Spreads meduim term. Learn how to trade them and margins are incredible lower than if you trade one outright.
More...

That sounds interesting too. Thanks for the advice!
 
I do straight long positions. Today I ran CAT C90's from .37->.46, BBRY C15 from .17->.15, JPM C49 from .30->.37, and GOOG C875 from 2.15->2.10. Total return to the book after commissions, a sliver under 10%. Yesterday it was around 18%. My week to date performance is 28.89%. It would probably be ~38% but my broker's platform is having a plethora of problems which are keeping my orders from opening and/or making them take forever to process.

Tomorrow I'm looking for 25-30% on the book.

Here's a book I ran last spring (below). It's more volatile, but it gives you an idea of what weeklies give for returns (not to say you can get those because I still haven't found anyone else that can manage to do what I do).

https://docs.google.com/a/holotechs...xYsQIP6ZdEJ0dVVHbUZNT29McXFpZDBUUXllWVE#gid=0
 
Quote from treeHamster:

I do straight long positions. Today I ran CAT C90's from .37->.46, BBRY C15 from .17->.15, JPM C49 from .30->.37, and GOOG C875 from 2.15->2.10. Total return to the book after commissions, a sliver under 10%. Yesterday it was around 18%. My week to date performance is 28.89%. It would probably be ~38% but my broker's platform is having a plethora of problems which are keeping my orders from opening and/or making them take forever to process.

Tomorrow I'm looking for 25-30% on the book.

Here's a book I ran last spring (below). It's more volatile, but it gives you an idea of what weeklies give for returns (not to say you can get those because I still haven't found anyone else that can manage to do what I do).

https://docs.google.com/a/holotechs...xYsQIP6ZdEJ0dVVHbUZNT29McXFpZDBUUXllWVE#gid=0
More...
treeHamster,
Looked at your spreadsheet and that was quite a wild ride ! Have you modified your approach and sizes for the current market ? Also, I have not heard of Choice Trade...how has your experience been with them except for the problems you are having right now ?
 
I trade with smaller positions but that was a different book. I started a new one and it grows significantly slower. It used the same model for weeklies but a different goal and position sizing for the book.

ChoiceTrade is...meh. If you don't have enough cash for IB or LightSpeed or aren't good enough to make IB or LS profitable (after data and platform fees), then it's good. If you can afford IB/LS, you're better off there. CT ends up being a giant pain in my butt. I'm already stuck here for the time being which is why I haven't switched.
 
I have a client who just went live 3 months ago with a $10K account at Advantage Futures and he's doing very well swing trading futures spreads. They are very, very cheap to margin and carry overnight. Having said that, he is an experienced OTC energy trader who trained with me off-hours in exchange futures spreads so he was really well put together before he hired me.

Probably start with stocks and trade ridiculously small would be as good as anything else, but IMHO you are going down the wrong path. Save that money, and invest a modest amount in a charting platform using delayed data. Do lots of research and testing, build at least a dozen different trading systems, and paper trade them. Track your daily drawdowns - most important metric for you to consider. I think that just starting to trade without a really well engineered and tested trading system is just gambling and a road to frustration for you. This is a business and you'd better treat it like a business. Get your shit wired tight. Focus. This business attracts alot of very bright people who apply ruthless intellectual firepower to the markets.
 
Quote from Ted28:

Hi All,

In a nutshell, I have tried and failed miserably with stock trading for the past few years......
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Ted28:

I recommend peer-to-peer or social lending.

http://www.lendingclub.com/

http://www.prosper.com/

Rates are good but investments in consumer notes are not asset-backed securities. I think the quality of the notes with Lending Club is better. Prosper is okay.




The new kid on the block in social lending:

https://www.uhaulinvestorsclub.com/

Rates are not as great as above but investments are asset-backed securities.



For humanitarian types that want to help the world.

https://www.microplace.com/

I don't recommend competitor Kiva because they do not pay interest back.


Invest in small amounts regularly and diversify. Scrutinize everything before investing in a note and do your homework.
For every 10k you invest, you can see several hundred dollars back per month. Expect a default rate of 10-20%. Continuously invest small amounts and diversify to protect yourself. Do not think A credit people are the best or safest to invest in. They can default more than those with worst credit too. You are dealing with all sorts of people so scrutinize and diversify.
 
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