Trading fulltime retail with $50k
- Thread starter wiesman02
- Start date
A person can make 2 to 3 times 800 dollars a day in the equities with 45 to 50k and no leverage.
No trader who is taking what is offered will have a static level of capital in the markets. Capital increases at an exponential rate.
Today, a post in another thread mentions a profit of 16%. This is a profit on 50K that is 10 times the 800 dollars.
You asked how?
What a person needs to make money in trading stocks is an uncomplicated method that works every day of the week and, if he has a full time job, works without having to attend to monitoring during RTH's.
1. Get a Universe (Now its about 80 stocks).
2. Keep it up to date.
3. Sort and trade the stocks using the attached sheet of paper. (unusual volume is a calculation where the day's volume is divided by the 65 day average).
It doesn't matter whether you do it in the evening and place orders the next day. If you have 16,000 dollars and divide it inot four streams, you can make 5% on each stream each day and have 800 dollars.
The first week you add 4,000 dollars to your capital and you have 20,000 dollars which is making you 1,000 dollars a day and yielding 5,000 dollars a week of new money.
At the end of two weeks you have half of the 50,000 trading capital or 25,000 dollars.
At some point (roughly 100,000 shares in each stream) you will find that it takes about 20 partial fills to enter a stock and about 30 partial fills to exit a stock. By this time you will have more than four streams and you will be doing more than just position trading to make money.
What is interesting about all of this is that no one person or one method ever affects the huge pools of capital in the markets.
If you go to leveraging and intraday trading futures equity indexes the yield on capital is about 50 times greater per day. today would be one where excessive profits would be made since the market is so very favorable for extracting profits. The objective in markets having one instrument is to always be in the market, always be on the right side. This is done by using sentiment to be on the right side and simply use the MODE (continue, or change) to hold or reverse, respectively.
Everything about making money in markets comes down to using the tools available. Knowledge, skills and experience are required. A learner experiences each trading day as he uses his knowledge and tools for the given skill set he has acquired. Skills beget more skills as more tools are understood and of use.
You tell us you are standing on the outside and do not know what the market offers each day. Look at the market to find out. Look at a Universe that has a list of stocks. Use the attachment to "see" the list sort by "unusual volume". Notice the stocks at the top are making the most money. You can do this for 250 days of the year and you get the same result.
There is a Wiley book for 19.95 that explains how to use two numbers for investing to do better than (twice as well) the averages each year. The numbers are the ingredients of the P/E and they are used as E/P. You chose the highest E/P stocks.
I chose two other numbers: today's volume and the 65 day average. I made a sheet for using it. You make a lot of money compared to the Wiley book.
You have three chioces:
1. Stay outside.
2. Spend 20 bucks to make twice the indexes. (There is a web site that gives you the list free).
3. Print the sheet and get to be very rich.
You probably will do what most people do. Read ET to find out the full range of what people are doing.
I made reference to a post made today, a day which some people may feel presents difficulties.
Apparently it was attainable one a day like today.
I miscommunicated that 16% a day is possible on avarage for a person's total porfolio. I do know some people who use their account sweepings (small leftovers from going from one trade to another) for making 15% a day. This, of course, is just a side focus and not much capital is involved.
The ability to lose 15% in a day is a tough thing to achieve when using "unusual volume". Most list are color coded and I just do not believe a person could make mistakes in trading on "unusual volume".
As each morning begins stocks are sorted by volume. Initially there is little price movement but if a stock is favorable, it is "green" visually and making upward movement from the prior value (the prior close). By the time DU for a day is reached (.25 of the 65daily average), a person "knows" that 2 to 4 times the DU will be reached by day's end. Accompanying this is the breakout away up from the upward right trend channel line (the IT "trend line") that contains the intermediate term long trend.
If a person is expert, certainly he can do the same for "shorting" stocks of high quality by simply using the "red" and "short" characterisitcs when the stcok is in a non dominant portion of the IT channel.
It is well known that the cubic power law ratio of longs vs shorts half cycle durations favors shorts (2's) over longs (3's): 8 to 27 relative durations for a given movement.
Here we are talking about just being able to get involved in taking what the market OFFERS and probaly not making any fine points about how to really make money.
At some point in a trader's career, the issue of losing money becomes somewhat remote. A trader is spending his time choosing between the rate of profits rate than If a stock is going to be making a profit. The rate may be related to a long or short trade.
You are speaking of a stock making a 16% profit in a long trade or a stock making a 15% profit in a short trade as I read your comment. Both these stocks would fist apprear to be rising to the top of the Universe sorted by "unusual volume". One would be long (and GREEN) and the other would be short (and RED). The % (in absolute value) is next considered. An expert choses to deploy capital (or shorting margin in terms of borrowing an equity) to make the most money.
when it comes to protecting a position, the issue is not in terms of losses; It is in terms of how hard the element of the portfolio is working. This is a relative money velocity decision. It comes as a comparison of demand for money among opportunities. On a list sorted by unusual volume and subsorted by money velocity, it comes down to looking at stocks not owned and above the owned stocks. A stock peaking in profits is slowing down and a stock that is an opportunity is rising in money velocity. There is a cross over at some point where noe stock becomes relatively unfavorable and another steps up to the line.
Consider how important it is to do crossovers. For example do some graphics on holds of various periods. Consider the range of 30 to 100 cycles per year. Going from 80 to 100 is a matter of introducing crossover trading. A three day hold can be reduced to 2 1/2 days by selling a peaking stock in the am and picking up a breakout stock in the pm. To move 100,000 shares of two similar stocks around 30 would take 30 partial exits so as to not exceed normal block size trades and as money is freed up 20 partial fills would be needed to establish a new position.
Regard NTRI in 2006 where this could be done as above. In each 2 1/2 day hold 30% was realized and the cycle was done four times during the year, all in the same price range. As a 3 day trade it would take 12 days; as a 2 1/2 day trade it would take 10 days. There is a difference in anual income when you divide 12 or 10 into 240 trading days during a year. It is a 20 cycle difference under a money velocity condition where 30% is done each cycle. What is it worth to a trader to add 20 cycles @ 30% a cycle? This trader is not in your place of considering a 15% loss. For him it is a 15% win simply because he, unlike you, has a monitoring, analysis, decision making and trading platform that is design to make what the market offers.
I have mentioned trading approaches that range from doubling the averages (Joel Greenblatt's, The Little Book That Beats the Market's, Wiley and as reviewed in March Kiplinger's on page 39) to doing 100 cycles a year at maximum daily offering by the equities markets. Trading with 50K begins to work when a person puts in the effort to make it work. It is not a market offering issue; it is a trader effectiveness and efficiency issue.
You comment on two trades: 16% and 15%; please recognize that this is an expert making 31% and someone else losing 31% or it could be a person making 1% or a person losing 1%. Four possibilities for two trades in sequence.
I'm sorry Jack Hershey, but I simply don't follow what you're trying to convey. If indeed your ROI is about 16% per day (unless I missunderstood your point), you should be more wealthy than Bill Gates. As a matter of fact, 1% per day consistently over several years would have made you a very wealthy multi-millionaire or better. Obviously, I mus be missing the thrust of your argument.
It sounds as if you are using some type of automated system. Is that correct?
Is there a simplier way you can break down your methodology. Perhaps you can give an example of your set-ups and trades, as well as the fundamentals associated with your set-ups, entries and exits.
Thanks,
Walt
the attached will explain it to some people. I hope you take the time to digest it.
Jack Hershey,
I appreciate the time and effort you've put into explaining your perspective on trading. However, the attachment really did not help. Do you have actual examples of trades taken, with the set-ups and exits for the actual trades?
Can anyone else explain what Jack Hershey is trying to convey... Anyone?
Either Jack is a bona fide Genius or he's starting to suffer from dementia.
Help... anyone...
I appreciate the time and effort you've put into explaining your perspective on trading. However, the attachment really did not help. Do you have actual examples of trades taken, with the set-ups and exits for the actual trades?
Can anyone else explain what Jack Hershey is trying to convey... Anyone?
Either Jack is a bona fide Genius or he's starting to suffer from dementia.
Help... anyone...