You've got some good advice there. I am/was in a similar situation....made alot trading..spent alot on a car and other stuff and then wondered how to trade a large account size.
Unfortunately its not a case of just increasing your bet size because liquidity becomes an issue.
I play a few strategies - firstly I tend to keep away from day trading - largely due to time and liquidity considerations. I tend to go for swing trades and macro trades. Swing trades I'll risk maybe a 10% move on the trade....but I don't put that much on...I tend to put on between $20k-$80k per stock...if I I'm bullish on a particular sector but liquidity is not good then I'll choose a couple of stocks and spread the risk. If I'm risking 10% then I'm looking for atleast 20% and ideally to catch a big trend.
I also do alot of futures- particularly currencies - prefer to take advantage of the futures leverage but I treat them as if they are the full amount...e.g. one cable contract is $100,000 as opposed to one cable contract is only a couple of thousand in margin. I also hedge my dollars by taking currency positions.
I also keep aside a pool of what I cool gambling money - this is money that I am willing to lose entirely...usually to buy way OTM options on an punt - ones which will pay 50 or 100-1 - mostly if I'm going for a big breakdown or run-up.
The most difficult thing for me is that I usually have a pile of cash doing nothing ...and with todays interest rates its quite painful.
I've been doing research on s-term high yield bonds but not quite comfortable with them yet. I also look for companies with strong fundamentals and technicals that have a nice dividend yield ..if I can pick up a stock moving sideways on very strong support (monthly/yearly support) that pays => 5% dividend then that will do nicely as a place to park cash.
Key though is to work out your risk tolerance and what you want...e.g if you have $1m then if you make 15% pa thats $150k - for some people that's enough ...if thats enough for you then dont take any more risk...you need to decide if that's enough for you. I do believe that safety of capital is quite important - no need to give your money back to the market.
One good thing I like about having alot of trading capital is that I can stick it sideways stocks...e.g. if as stock has been trading sideways for a very long time, I used to wait for the breakout before jumping in....whereas now I will just accumulate it at its support level...and then it doesn't matter if it takes months to break out...particularly if it also pays a dividend.
Also expand your horizons....look at global markets...become a cherry picker....in the last few years I've invested in stock/currenices/futures from Philippines, UK, US, Europe, Australia, New Zealand, China, Hong Kong, Canada....and probably a few others I can't remember.
Unfortunately its not a case of just increasing your bet size because liquidity becomes an issue.
I play a few strategies - firstly I tend to keep away from day trading - largely due to time and liquidity considerations. I tend to go for swing trades and macro trades. Swing trades I'll risk maybe a 10% move on the trade....but I don't put that much on...I tend to put on between $20k-$80k per stock...if I I'm bullish on a particular sector but liquidity is not good then I'll choose a couple of stocks and spread the risk. If I'm risking 10% then I'm looking for atleast 20% and ideally to catch a big trend.
I also do alot of futures- particularly currencies - prefer to take advantage of the futures leverage but I treat them as if they are the full amount...e.g. one cable contract is $100,000 as opposed to one cable contract is only a couple of thousand in margin. I also hedge my dollars by taking currency positions.
I also keep aside a pool of what I cool gambling money - this is money that I am willing to lose entirely...usually to buy way OTM options on an punt - ones which will pay 50 or 100-1 - mostly if I'm going for a big breakdown or run-up.
The most difficult thing for me is that I usually have a pile of cash doing nothing ...and with todays interest rates its quite painful.
I've been doing research on s-term high yield bonds but not quite comfortable with them yet. I also look for companies with strong fundamentals and technicals that have a nice dividend yield ..if I can pick up a stock moving sideways on very strong support (monthly/yearly support) that pays => 5% dividend then that will do nicely as a place to park cash.
Key though is to work out your risk tolerance and what you want...e.g if you have $1m then if you make 15% pa thats $150k - for some people that's enough ...if thats enough for you then dont take any more risk...you need to decide if that's enough for you. I do believe that safety of capital is quite important - no need to give your money back to the market.
One good thing I like about having alot of trading capital is that I can stick it sideways stocks...e.g. if as stock has been trading sideways for a very long time, I used to wait for the breakout before jumping in....whereas now I will just accumulate it at its support level...and then it doesn't matter if it takes months to break out...particularly if it also pays a dividend.
Also expand your horizons....look at global markets...become a cherry picker....in the last few years I've invested in stock/currenices/futures from Philippines, UK, US, Europe, Australia, New Zealand, China, Hong Kong, Canada....and probably a few others I can't remember.
