The reality of trading

[nitro]

Hedged trading, where you are trading the spread between two or more instruments is a very low margin business.

Using (highly) leveraged instruments, my reality is that it takes $50,000 account to make $100/Day after commissions. So $500/Week or $2000/Month. If I add the colocation fees, software fees, etc, that reduces the profit to about $1,700/Month take home.

And I am lucky, since I write my own software I don't have lease fees which would further reduce this take home number.

The only real way to trade highly leveraged instruments on a relatively small account (Which is what $50,000 is) can only be done by spreading.

Brokers take note, lower your commissions or drive retail traders into oblivion. Every 10% lower commission is that much more profit for me, which increases my volume and size. WIN:WIN. The current tiers for volume traders are far too stringent.

These calculations are very important for risk averse people that come here looking to have their own yacht trading.

 

[dealmaker]

Hedged trading, where you are trading the spread between two or more instruments is a very low margin business.

Using (highly) leveraged instruments, my reality is that it takes $50,000 account to make $100/Day after commissions. So $500/Week or $2000/Month. If I add the colocation fees, software fees, etc, that reduces the profit to about $1,700/Month take home.

And I am lucky, since I write my own software I don't have lease fees which would further reduce this take home number.

The only real way to trade highly leveraged instruments on a relatively small account (Which is what $50,000 is) can only be done by spreading.

Brokers take note, lower your commissions or drive retail traders into oblivion. Every 10% lower commission is that much more profit for me, which increases my volume and size. WIN:WIN. The current tiers for volume traders are far too stringent.

These calculations are very important for risk averse people that come here looking to have their own yacht trading.

#1 reason for small business failure is under capitalization. A trader needs to have a large enough account to survive the learning curve ( markets are dynamic what works today may not work tomorrow, education is on going), increased slippage and low volatility environment. A trader to have a realistic chance trading full time needs to have a SIX figure account. There will always be OUTLIERS. Of-course lower the cost of trading the better.

 

[fordewind]

Hedged trading, where you are trading the spread between two or more instruments is a very low margin business.

Using (highly) leveraged instruments, my reality is that it takes $50,000 account to make $100/Day after commissions. So $500/Week or $2000/Month. If I add the colocation fees, software fees, etc, that reduces the profit to about $1,700/Month take home.

And I am lucky, since I write my own software I don't have lease fees which would further reduce this take home number.

The only real way to trade highly leveraged instruments on a relatively small account (Which is what $50,000 is) can only be done by spreading.

Brokers take note, lower your commissions or drive retail traders into oblivion. Every 10% lower commission is that much more profit for me, which increases my volume and size. WIN:WIN. The current tiers for volume traders are far too stringent.

These calculations are very important for risk averse people that come here looking to have their own yacht trading.

Any business is a very low margin business,except prostitution and drug dealing or if your lucky enough to be in Russia in 90-th,buying out steel and oil factories for pennies.

 

[nitro]

Any business is a very low margin business,except prostitution and drug dealing or if your lucky enough to be in Russia in 90-th,buying out steel and oil factories for pennies.

Really?

What about a Gucci store? How much does it cost to make one of those $2000 purses?

 

[nitro]

#1 reason for small business failure is under capitalization. A trader needs to have a large enough account to survive the learning curve ( markets are dynamic what works today may not work tomorrow, education is on going), increased slippage and low volatility environment. A trader to have a realistic chance trading full time needs to have a SIX figure account. There will always be OUTLIERS. Of-course lower the cost of trading the better.

Agreed on all counts, except the low volatility part. For some reason, I make most of my money in low vol environments and mostly don't do well in high volatility (probably emotional if a more accurate term) environments.

 

[nitro]

The Most Profitable Small Businesses

http://www.forbes.com/sites/brettne...ost-profitable-small-businesses/#77df7be918c2

I find this one hard to believe. These guys make a fortune with almost no cost:

15. Lessors of Miniwarehouses and Self-Storage Units: 11%

 

[nitro]

Note that the only reason that trading appears to have a greater profitability than these businesses listed above is because of the high leverage, and the [extreme] risk taking.

 

[fordewind]

Really?

What about a Gucci store? How much does it cost to make one of those $2000 purses?

Gucci spent 50 years to make 2K purses,so Gucci don`t count.So dont this one:

http://www.telegraph.co.uk/foodandd...u-wait-14-years-for-a-restaurant-booking.html

 

[nitro]

Flipping houses:

https://www.linkedin.com/pulse/average-gross-profit-margin-flipping-investment-home-amiri

 

[dealmaker]

Agreed on all counts, except the low volatility part. For some reason, I make most of my money in low vol environments and mostly don't do well in high volatility (probably emotional if a more accurate term) environments.

Its easier for a marginally skilled trader to make money during high volatility ( or wipe out for that matter, skill is a matter of time assuming focus)....