Aw, lescor, that is so mundane. You need to recognize that marketsurfer is an action hero. He wants it all and he wants it now.Quote from lescor:
Wrong, wrong, wrong. Taking large risks is the only way you'll make it? Where'd you pick up that nugget of market wisdom?
The 3 goals of trading in order of importance, are:
1. Preserve your capital
2. Earn consistent returns
3. Earn large returns.
These rules apply to anyone trying to achieve long term success in the markets, and do not account for capitalization.
Quote from Thunderdog:
Aw, lescor, that is so mundane. You need to recognize that marketsurfer is an action hero. He wants it all and he wants it now.
As for taking those large risks, he likely picked up that idea from VN. You will recall that VN wrote in his books that he readily embraces risk. Not to be outdone, marketsurfer glorifies it. Coupled with a loose game, you can really get some pretty serious outcomes in no time.
Quote from marketsurfer:
please note i'm not saying its impossible, just highly unlikely to make a living with a small retail acccount without taking outsized risks. Sure, with another source of income, one can make it--when i say "make a living" i mean purely from trading. capitalization MUST be accounted for if trading is your only source of income--- even huge returns on small capital base will be eaten up by the vig, losses, and taxes. i strongly suggest going the prop route for full time traders with a firm that teaches a real edge.
when your grinding it out, you also have the vig and bills to pay, which are depleting your capital daily--not to mention taxes. i stand by my contention that taking outsized risks is the ONLY way one is going to make a living with a small sized account.
yeah, one can point to dan zanger and some others who have done it, but i betcha ALL of the traders who made it huge took crazy risks that worked out.
surf
surf
Quote from Dustin:
With so many firms offering absurd leverage these days how is it possible that under capitalization is even a factor? Anyone with less than $10k to their name has no business attempting this as a living.
Quote from mschey:
Trading is a business, and should be treated as such. A trader with a small account, say 25 or 50k, can make steady, consistent profits, generating a solid six figure income, without swinging for the fences, and taking big risks. Then you take a portion of those winnings, reinvest into the account to grow your capital, once you are beyond the maximum amount of capital you can use, you allocate to other strategies and continue to grow and compound your trading capital. It can be done, it is being done, and one only needs to chat with a few of us full time traders as proof.
Quote from marketsurfer:
i don't dispute lescor's post. other than the capitalization part--- given adequate capital, he is correct to a point. stating that one needs to have another source of income if trading in the grinding it out manner is 100% correct. one can't hope to make a living wage trading like that without substantial capital or/and without a working propfirm edge. the only way to make it without another source of income or substantial capital is too embrace RISK, big risk. otherwise, 99% would be better off with a job and investing in mutual funds. it's pure fantasy to believe otherwise.
surf
Quote from marketsurfer:
theoretically that sounds great! i don't dispute that it can be done and that a few may actually be doing it. if you are, im very impressed! I dont believe many are making 100% plus per year, year after year, and avoiding potential catastrophic risk levels at the same time.
surf
Quote from lescor:
I'll have to agree with Mike here. There are a lot of guys at prop shops earning good livings on a modest capital base. six figures+ on a 25 or 50k account is more common than you think. I'll guarantee that almost all of them hate losing more than they love winning. The solid, consistent guys are the most risk-averse bunch you'll meet. It's kinda like that saying about helicopter pilots...