Trade a big account

[Laissez Faire]

1. If not his wife’s capital, then whose? He doesn’t seem to have his own capital to trade with.

Trading is a luxury, not a necessity. He can choose to not trade until he saved up enough of his own capital.

I don’t see a problem trading his wife’s money if he is profitable.

I see a problem using his wifes money as «tuition money».

Do you agree?

2. I never said $14K was undercapitalized. Exactly the opposite. I recommended dividing his current capital of $140K into 10 equal units of $14K and trading a couple of MES with one unit and keeping the remainder in reserve.

Maybe we’re mincing words, but you said people blame being undercapitalized, yet you suggest 14K for a few MES.

I say 14K is a VERY good account for trading 1-2 MES. Definitely not undercapitalized.

I also said 1-2 MES ain’t going to take you anywhere unless your trading is absolutely stellar.

Where is our disagreement?

I know someone who started out on his own with a 500K account. I’m 100% confident that if I had a 500K account I could trade for a living comfortably. Sadly, I do not.

Maybe there is a guy who started with one MES and have now compounded that to 100 ES. I’d love to hear that story and meet the guy.

3. My central advice was to focus on learning above all else. Focusing on the money is what most people do. Your post is an example. That’s just the way it is.

Maybe just simulator trade, then.

 

[savoir]

Trading is a luxury, not a necessity. He can choose to not trade until he saved up enough of his own capital.

I don’t see a problem trading his wife’s money if he is profitable.

I see a problem using his wifes money as «tuition money».

Do you agree?

I don’t agree or disagree. He asked for comments about his intention to trade. He said he had $140K plus another $50K to add. I offered my thoughts on that.

Maybe we’re mincing words, but you said people blame being undercapitalized, yet you suggest 14K for a few MES.

I say 14K is a VERY good account for trading 1-2 MES. Definitely not undercapitalized.

I also said 1-2 MES ain’t going to take you anywhere unless your trading is absolutely stellar.

Where is our disagreement?

The context was adding $50K to the $140K. I said adding another $50K was the wrong course and I suggested he not take on the mindset of an “undercapitalized” person who thinks he has a better chance of success with a larger account. I also said a winner takes money out of the account, not put more money into it. The $14K is a separate suggestion and unrelated to an “undercapitalized” mindset.

I know someone who started out on his own with a 500K account. I’m 100% confident that if I had a 500K account I could trade for a living comfortably. Sadly, I do not.

Okay, but I don’t see how that’s relevant to his request for comments.

Maybe there is a guy who started with one MES and have now compounded that to 100 ES. I’d love to hear that story and meet the guy.

I suggested as a beginning point that he focus on learning and to keep the tuition low. I don’t know about one MES to 100 ES as being any kind of standard. That’s your invention.

Maybe just simulator trade, then.

I have no comment about that.

 

[Laissez Faire]

I don’t agree or disagree. He asked for comments about his intention to trade. He said he had $140K plus another $50K to add. I offered my thoughts on that.

The context was adding $50K to the $140K. I said adding another $50K was the wrong course and I suggested he not take on the mindset of an “undercapitalized” person who thinks he has a better chance of success with a larger account. I also said a winner takes money out of the account, not put more money into it. The $14K is a separate suggestion and unrelated to an “undercapitalized” mindset.

Okay, but I don’t see how that’s relevant to his request for comments.

I suggested as a beginning point that he focus on learning and to keep the tuition low. I don’t know about one MES to 100 ES as being any kind of standard. That’s your invention.

I have no comment about that.

Okay. Thanks for clarifying.

 

[newwurldmn]

A little background: I've been trading S&P 500 related products for 7 years, SPY, spy options, ES, ES options, MES. In the first few years, I traded big accounts (usually started with $25K) and lost a lot, two years ago I started to trade very small accounts (1~2K), I only trade one or two MES contracts. I'm still a struggling trader but I think I know enough to become profitable, sometimes my emotions made me lose big, with the small accounts the room for errors is very small.

Two months ago, my family gave me a big account (140K) to trade, told me to trade safe, big loss is unacceptable. they believe that I can grow the account however slowly.

At first I was very confident, I mainly trade the wheel strategy (sell cash-secured puts, and covered calls if assigned), shouldn't be hard to make small profits. The market in the past two months is not very friendly to option sellers, my account got a big hit in the first week, at May 20 net liquidity dropped to 120K, fortunately I recovered all losses and became profitable in June, then 500 points decline, my account dropped to almost 120K again. With the recent rally I'm now 3K in red, I almost liquidated everything on Friday, it's been very stressful for 3 weeks.

Anyway, I definitely don't want to be in the same situation ever again, 20K loss for two times, this is my worst trading ever. If I lose $1k per day, 20K would take me a month to lose that much.

In the meantime, I also day trade MES, I can hold 500 SPY but I can only handle a few MES contracts mentally. My P/L is usually less than $200, but most days are green.

So, I mainly trade options (only selling), also day trade MES as complement. After this two months experience, I want to switch my trading - mainly day trade MES, and only trade options when a big chance presents, e.g. after a few days decline. But it seems to be a waste of fund, if I only trade a few MES contracts, a 10K or 20K account at most should be enough. I will deposit another 50K, so it's a 190K account, how do you trade this account? Safely, and maybe fund-efficiently.

I want to hear all kinds of opinions to open my mind. Thanks!

it’s hard to scale up your size and change your mandate and lower your risk tolerance all at once. I would slow it down. Offer to take 30k and work on perfecting your new mandate and risk parameters. Then take more money.

not to mention the markets have changed over the last 6 months. Covered calls are a bullish strategy. They will perform similarly to being long only on the downside. It’s hard to not lose money when you are long this market. This part is your fault for not setting the expectations with your investors.

 

[nodoubts]

I agree with Gold Digger. You should only be trading your own capital. Risking the money of family will lead to disaster.

Emotion is the only reason traders lose money. You admit it's a problem, which is common, so it needs to be dealt with. Until you can trade without emotion, it's not responsible to be trading other people's money at all. Reign yourself in.

Return their money, trade your own money only, improve your technique, build up your account through effective practices. Do that, your account will grow, you don't need outside capital.

Happy trades!

 

[777]

A little background: I've been trading S&P 500 related products for 7 years, SPY, spy options, ES, ES options, MES. In the first few years, I traded big accounts (usually started with $25K) and lost a lot, two years ago I started to trade very small accounts (1~2K), I only trade one or two MES contracts. I'm still a struggling trader but I think I know enough to become profitable, sometimes my emotions made me lose big, with the small accounts the room for errors is very small.

Two months ago, my family gave me a big account (140K) to trade, told me to trade safe, big loss is unacceptable. they believe that I can grow the account however slowly.

At first I was very confident, I mainly trade the wheel strategy (sell cash-secured puts, and covered calls if assigned), shouldn't be hard to make small profits. The market in the past two months is not very friendly to option sellers, my account got a big hit in the first week, at May 20 net liquidity dropped to 120K, fortunately I recovered all losses and became profitable in June, then 500 points decline, my account dropped to almost 120K again. With the recent rally I'm now 3K in red, I almost liquidated everything on Friday, it's been very stressful for 3 weeks.

Anyway, I definitely don't want to be in the same situation ever again, 20K loss for two times, this is my worst trading ever. If I lose $1k per day, 20K would take me a month to lose that much.

In the meantime, I also day trade MES, I can hold 500 SPY but I can only handle a few MES contracts mentally. My P/L is usually less than $200, but most days are green.

So, I mainly trade options (only selling), also day trade MES as complement. After this two months experience, I want to switch my trading - mainly day trade MES, and only trade options when a big chance presents, e.g. after a few days decline. But it seems to be a waste of fund, if I only trade a few MES contracts, a 10K or 20K account at most should be enough. I will deposit another 50K, so it's a 190K account, how do you trade this account? Safely, and maybe fund-efficiently.

I want to hear all kinds of opinions to open my mind. Thanks!

You need to say why you think you have an edge (positive expectation) on your trades.

Why in the world do you think you can beat both the competition and frictional costs of trading?

I can tell from your writing that you probably have negative expectation on your trades but why do you think that you have positive expectation?

___

Look up the meaning of "positive expectation" as without this, risk control, aka money management, will not make you a winner.

 

[Flapdoodle]

Position sizing is very important before making trades. Traders should also understand and calculate the risk and the profits and then make your trading decisions.

 

[777]

A little background: I've been trading S&P 500 related products for 7 years, SPY, spy options, ES, ES options, MES. In the first few years, I traded big accounts (usually started with $25K) and lost a lot, two years ago I started to trade very small accounts (1~2K), I only trade one or two MES contracts. I'm still a struggling trader but I think I know enough to become profitable, sometimes my emotions made me lose big, with the small accounts the room for errors is very small.

Two months ago, my family gave me a big account (140K) to trade, told me to trade safe, big loss is unacceptable. they believe that I can grow the account however slowly.

At first I was very confident, I mainly trade the wheel strategy (sell cash-secured puts, and covered calls if assigned), shouldn't be hard to make small profits. The market in the past two months is not very friendly to option sellers, my account got a big hit in the first week, at May 20 net liquidity dropped to 120K, fortunately I recovered all losses and became profitable in June, then 500 points decline, my account dropped to almost 120K again. With the recent rally I'm now 3K in red, I almost liquidated everything on Friday, it's been very stressful for 3 weeks.

Anyway, I definitely don't want to be in the same situation ever again, 20K loss for two times, this is my worst trading ever. If I lose $1k per day, 20K would take me a month to lose that much.

In the meantime, I also day trade MES, I can hold 500 SPY but I can only handle a few MES contracts mentally. My P/L is usually less than $200, but most days are green.

So, I mainly trade options (only selling), also day trade MES as complement. After this two months experience, I want to switch my trading - mainly day trade MES, and only trade options when a big chance presents, e.g. after a few days decline. But it seems to be a waste of fund, if I only trade a few MES contracts, a 10K or 20K account at most should be enough. I will deposit another 50K, so it's a 190K account, how do you trade this account? Safely, and maybe fund-efficiently.

I want to hear all kinds of opinions to open my mind. Thanks!

Game plans are not enough. What if I had a game plan for boxing Mike Tyson?

Keeping loses smaller is not enough, you need and edge that you can explain and win with.


Example:


Keeping losses small will not allow you to beat roulette because you have a disadvantage on your bets.
____

What you want to do is try to find a winning trader and work for them. This may not be possible but keep your eyes open.

You want someone you do not pay as gurus-for-hire are mostly hustlers.

At least see if you can get to know someone who is successfully doing what you want to do!!!

____

Also, I would stop trading family money or at least tell your family you will stop trading the money if you lose a certain amount.

 

[Concinnity]

Oh man this is just one of those things.... very similar to getting older and wishing you knew back then, what you know now.

It's crazy to see how many people have access and get access to pretty large account sizes and don't understand or comprehend what they truly have in front of them. Wish I could say I was different, but in my younger years I had access to a pretty large account and didn't understand what I had, nor how to effectively trade it. So, can fully admit I am the pot calling the kettle black here.

Thankfully have my emotions under control now and have removed all excuses. But it still will likely be awhile before I get back to where I was.

 

[SimpleMeLike]

A little background: I've been trading S&P 500 related products for 7 years, SPY, spy options, ES, ES options, MES. In the first few years, I traded big accounts (usually started with $25K) and lost a lot, two years ago I started to trade very small accounts (1~2K), I only trade one or two MES contracts. I'm still a struggling trader but I think I know enough to become profitable, sometimes my emotions made me lose big, with the small accounts the room for errors is very small.

Two months ago, my family gave me a big account (140K) to trade, told me to trade safe, big loss is unacceptable. they believe that I can grow the account however slowly.

At first I was very confident, I mainly trade the wheel strategy (sell cash-secured puts, and covered calls if assigned), shouldn't be hard to make small profits. The market in the past two months is not very friendly to option sellers, my account got a big hit in the first week, at May 20 net liquidity dropped to 120K, fortunately I recovered all losses and became profitable in June, then 500 points decline, my account dropped to almost 120K again. With the recent rally I'm now 3K in red, I almost liquidated everything on Friday, it's been very stressful for 3 weeks.

Anyway, I definitely don't want to be in the same situation ever again, 20K loss for two times, this is my worst trading ever. If I lose $1k per day, 20K would take me a month to lose that much.

In the meantime, I also day trade MES, I can hold 500 SPY but I can only handle a few MES contracts mentally. My P/L is usually less than $200, but most days are green.

So, I mainly trade options (only selling), also day trade MES as complement. After this two months experience, I want to switch my trading - mainly day trade MES, and only trade options when a big chance presents, e.g. after a few days decline. But it seems to be a waste of fund, if I only trade a few MES contracts, a 10K or 20K account at most should be enough. I will deposit another 50K, so it's a 190K account, how do you trade this account? Safely, and maybe fund-efficiently.

I want to hear all kinds of opinions to open my mind. Thanks!

hello hurricane_sh,

Do this and thank me later.

Give your family back their money.

Stop trading your own money.

Stay in SIM until you build at least a 1 year track record that is profitable per your liking.

Never forget Warren Buffet first and 2nd rule

Don't lose money.