Trading fulltime retail with $50k

If I may say, you have just taken the first step in the right direction and I congratulate you for your insight.

FWIW, you will probably spend the next two years losing. Make sure you prove that you have something that works by first trading very small shares for say a year (or if trading futures, simmulate it by using ETFs). Once a month, pick a day where you go full shares, so that you can see what it is like to be really live, and you don't get psychologically damaged trading small shares all the time. People think that once they have a system, that there still aren't psychological issues, in fact, there may be as many.

I have said this many times. The only thread worth reading on these boards are the Don Bright open only order journals. I am not saying it works, but it is the only place where you can see the ups and downs of known systemic traders that actually trade. It is a great place to start to learn about what you are facing as a system trader.

nitro
Quote from scriabinop23:

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And you know what I'm learning? I don't understand how anyone who isn't a market maker can actually make a living in these markets on short term trading (scalps, and very short term swings) without a system that takes the human component of execution out of it. It simply introduces too much potential for abberation. Furthermore, when you step back (like I'm forced to), you realize that most of these guys on this board are in the same shoes I was in a year ago - without a decent system (some call it an edge), and just great hopes from the reliance on their self belief and perception of self-capabilities. Maybe they are hopefully wise enough to step back before they lose it all.
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Funny thing about reading this board, everyone goes on and on about risk management, having a system usually based on back tested strategies and obscure TA analysis etc... . Yet it seems most traders still fail.

I only have one friend who trades. He reads the news, buys stock and naked calls on a stock when he thinks it is going up, buys naked calls on the QQQQ's and OEX when he thinks the market is going up, and buys naked puts when he thinks it is going down. I don't think he has ever had a losing year and has had some 6 figure years over the last 10 years.
 
Quote from polpolik:

scri,

based on your statements/story, I would have to argue that you blew out your account because you did not have the right money management skills nor the correct position sizing.

I would argue that I don't have an edge in most cases. Unless you think trading using S/R and candlestick reading is an edge which I don't think is. I do know my significant learning of money management and position sizing enabled me to have a great 2006 and so far, in 2007 (knock on wood).

Maybe I'm one of the few people that think you can make a living in this industry as long as you have great risk control / money management, and implement correct position sizing basing it on volatility.
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yep - you are right. the worst thing is that i intellectually knew all the correct money mgmt techniques and position sizing rules going into this. I wasn't disciplined enough to follow them (manually) -- thus I am thinking auto strategy trading will be a better fit for me. Once I had a few losses early on, met a few traders who put on size, then believed I could somehow get around that ... I decided to keep my position sizes the same as if I were trading a much larger account. It was my only 'hope' of recovery. Agree though thats all flawed.

as far as trading without an edge and purely good MM skills, I wish you luck and hope you are right for your own sake. But I can say that you must have some sort of 'edge' to make money (even if you don't know what it is), year after year. Backtest a few systems and you'll see quickly that 'random' simply doesn't work, with good money management.
 
Quote from Cocaine:

Dont listen to those that say "get a job and trade on the side" if your real passion is trading. If you want something bad enough,you will find ways to make it work (ala living at home with the "rents" for a while to save $$$). Everyone, myself included, had to learn the game over many many days/weeks/months etc. Knowing this, you should be prepared for a long journey. But one of great learning and eventual understanding. I dont make that much trading compared to some, but I have been between 112k-174k every year since 2001. Plus I get to be home with my wife and have much more freedom to do what I please.

Fortunately you are young and with few responsibilites, you are an ideal candidate for giving it a go.
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Ignore anyone who tells you "quit your job and trade" - They are jackasses - the number of people like you who will trade off $50K and make a living area probably 1-2%. And after some years of learning.

Those who advise you otherwise will never offer you any proof that you are reasonably likely (probability wise) to make a real living from this. "Works for me" does not factor in the 20+ people who cannot do it and washed out, for every one trader who makes money. And a lot of those who claim to be successful, are not. Scared money ($$$ you need to live off of) is dead money.

You need to start learning how to trade without dependening on it as your income source.

Shame on those who say "o for it" to a newer trader, encouraging them to lose their capital before they have a clue even how to make irregular profits...
 
Some in this thread who've mentioned you can't make a very good living with 50k capital are just plain wrong. I have 200k plus but I only have to use 45-50k to earn 800+ a day.

I've been day trading for over 15 years and experienced a lot of heartache over the years... and I can say none of it was caused by what the market did to me... it was what I did to myself.

I trade full time now and look back on my trading life and wonder why I made it so hard.

It took a lot of maturing and a lot of tough losses but those days are behind me.

Several in this thread have advised you to focus on your psychology of trading... and I can say without a doubt... this is what will make or break your trading career.

People are always looking for the holy grail of TA to give them the certainty of price movement that they will never find.

The real path to success is knowing yourself and developing an intense desire to succeed as a trader and an equally intense desire to know who you are.

Trading success is a small percentage of TA, but it's a very large percentage about how well you know yourself.
 
Thanks guys. I'm gonna continue to trade smaller lots and i'll check in, in a few more months.

I'll def. take all your advice and see how things go.
 
Quote from samus:

Some in this thread who've mentioned you can't make a very good living with 50k capital are just plain wrong.

Another bona fide stupid saying. Few people will "make a very good living with 50K." Most will piss away their money for various reasons. This is another example of a cheerleader encouraging someone to jump off a cliff, and figure out how to pack their parachute on the way down

I have 200k plus but I only have to use 45-50k to earn 800+ a day.

Yes, the rest is called "reserve" having 200K and 50K is not the same thing

I've been day trading for over 15 years and experienced a lot of heartache over the years... and I can say none of it was caused by what the market did to me... it was what I did to myself.

I trade full time now and look back on my trading life and wonder why I made it so hard. It took a lot of maturing and a lot of tough losses but those days are behind me.

Well, now you can give back and encourage someone to jump into the quicksand, since it is all so easy to make a very good living...

Several in this thread have advised you to focus on your psychology of trading... and I can say without a doubt... this is what will make or break your trading career.

Psychology does not make or break people. Not having an outperformance edge is what does in most of them. Almost all newer traders are playing against house odds, and when you are at less than 50% advantage, you lose eventually. Next, poor money management is what kills people. They win a few, and get wiped out as in the last couple of weeks of market activity.

Trading success is a small percentage of TA, but it's a very large percentage about how well you know yourself.

This is a vacuous statement???
 
Quote from rcanfiel:

Psychology does not make or break people. Not having an outperformance edge is what does in most of them. Almost all newer traders are playing against house odds, and when you are at less than 50% advantage, you lose eventually. Next, poor money management is what kills people. They win a few, and get wiped out as in the last couple of weeks of market activity.
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And more importantly, 50% advantage is not enough if your risk/reward ratio is not well under 1. (mix the numbers any way you like).
 
keep yr day job, day trading doesnt work. whatever you make u lose back.
the only way to make money and not waste yr life is to know stocks and buy cheap and hold them until theyre expensive. buying small lots of many stocks or better yet index funds. use the macd indictor on a 1 to 2 year graph fr buy and sell points.
 
Quote from wiesman02:

**I suppose I would go for a prop firm, unfortunately, I live in central Connecticut, where there's no prop firm in site and I have no intentions of moving just yet.**


If I had a chance to work for a prop firm in your situation and I had to move, I wouldn't hesitate a second. That's passion.
I day trade the fx markets, unfortunately there not that many prop firms around.

Good Luck to you.
G.
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