Turning $5,000 into $1,000,000

Where can one expect to meet slippage due to size if the average trade is lasting between 3 and 15 minutes, each trade varying between -2 (for stops) and +10 NQ pts, with all entries being countertrend limit offers/bids (picking reversals)? Where would you say size starts playing a factor? 50 contracts? 100 contracts?

If by using this method one was able to turn 5k into 15k in about 3 weeks, what can you reasonably project those returns to continue before the law of size finally catches up? I don't think this question is as unreasonable as the first, and am looking for an honest first-hand answer -- any takers?
 
Forgot to mention, the 5k --> 15k being achieved with lot sizes starting from 3 progressing up to 7 (I suppose using up to 50% of one's maximum daytrading buying power for NQ via IB margins).
 
Originally posted by JonnyT
I have found this post in another forum which was geared towards investing in general (Kyosaki, Burley etc......). Problem being there were no answers or discussions so I hope elitetrader.com can come to my rescue.


"""""""I'm having the current "problem" (or challenge). I have had great difficulty executing without significant slippage above 300 SP eminis (at the market execution). To my system, "significant slippage" is more than 0.5 points. I trade 5' charts and aim to make 4-6 points per day consistently in some 10-15 trades. Most trades are either 1.0-2.5 point losers, breakevens, or 3-4 point winners, with about 60W32L and 8Bk. Some "knowledgeable" people tell me that I have hit the ceiling for my system, and that I should stay at that level or less. Of course these "knowledgeable" people have never had the rates of return that I have had.

Anybody with any knowledge of money management knows that one can grow an account of $5K to $1M in less than 80 trading days with little %risk.(I took a bit longer and with a bigger starting account, for conservative reasons, but the theory stands).

Any suggestions to take my trading to the next level?. (i.e.: 10 times the current position size). """"""""


Now the area I would love to discuss is the best money management technique to turn $5,000 to $1,000,000 using the Emini S&P's. The poster claims this can be done in 80 days with little % risk.

Is there an age old theory to do this? If not, what is the best way to do this? Are there any Guru's that have this money management technique in a lecture series for $5,000? Otherwise are there any good books on the topic of money management and position sizing?

Personally I have turned $20k into $100k in 11 months trading only the ES. Looking back I put this mostly to good fortune. When I was at $20k I didn't care if I lost the money as it felt like play money, but now that my personal programming tells me that $100k is real and not for play I find that I haven't been as profitable.

If my next goal is to reach the $250k mark, what should I do now? Risk the $80k in profit on one trade? Risk $40k on two trades? Risk $20k on four trades?

Or should I head to my local casino because the drinks are free?
More...
You are going to get killed.

The people that have the capacity to do this aren't posting on this board.

nitro
 
A lot of people on here seem to be lacking in economics knowledge. They say things like, "Oh great! Then in 5 years I can make one billion dollars!"

What they fail to realize is that, as your size grows, you start pushing the market around. It is one thing to scalp points with 10 contracts but what happens when you trade 500? You're going to slip the market anywhere from .25 - 1.00 depending on the time of day and volume.

This is synonymous to people comparing investing to active trading. You can make 500% returns when you actively trade because that is actual work. Just shoving money into a stock and riding it means you aren't actively managing that account.

It is a lot easier to make a million than it is to make a billion. That's why hedge fund managers and other large mutual funds that get very large have a tremendous problem with managing assets. Just the sheer size of the money involved means that, if they pull out of a stock from their portfolio by selling it, they're going to tear right through many many levels of bids.

Please keep the "well you don't trade" comments to yourself. One doesn't have to trade to have a firm understanding of the mechanics behind economic principles. And, yet again, for the record -- I have traded.

Thank you.
 
Originally posted by nitro

You are going to get killed.

The people that have the capacity to do this aren't posting on this board.

nitro
More...

Nitro,

I don't get it??? Why is he going to get killed trying to take a 100k account to 250k???

As for the 5k to 1mil, I don't think he was implying he was going to attempt it -- he was asking for the money managment method that the guy was speaking of...

PEACE and good trading Nitro,
Commisso
 
Originally posted by J_Commisso


Nitro,

I don't get it??? Why is he going to get killed trying to take a 100k account to 250k???

As for the 5k to 1mil, I don't think he was implying he was going to attempt it -- he was asking for the money managment method that the guy was speaking of...

PEACE and good trading Nitro,
Commisso
More...
Oh,

100K into 250K is not too bad...

I thought it was about taking 5K into 1M in 80 days?

nitro
 
Originally posted by JonnyT

Now the area I would love to discuss is the best money management technique to turn $5,000 to $1,000,000 using the Emini S&P's. The poster claims this can be done in 80 days with little % risk.

Is there an age old theory to do this? If not, what is the best way to do this? Are there any Guru's that have this money management technique in a lecture series for $5,000? Otherwise are there any good books on the topic of money management and position sizing?

Personally I have turned $20k into $100k in 11 months trading only the ES. Looking back I put this mostly to good fortune. When I was at $20k I didn't care if I lost the money as it felt like play money, but now that my personal programming tells me that $100k is real and not for play I find that I haven't been as profitable.

If my next goal is to reach the $250k mark, what should I do now? Risk the $80k in profit on one trade? Risk $40k on two trades? Risk $20k on four trades?

Or should I head to my local casino because the drinks are free?
More...

Jonny,

As far as the best method to use to try and turn 5k into 1mil -- I would say that trader was living in a state of illusion...

As far as you are concerned -- I really cannot understand the sudden dilema??? If you were able to turn 20k into 100k then why do you suddenly need a road map to turn it into 250k? What has changed? You cannot tell me that you have hit size resistance trading a 100k account in the ES minis...

Why not just continue with the same position sizing module that you used to get where you currently are?
 
Originally posted by nitro

Oh,

100K into 250K is not too bad...

I thought it was about taking 5K into 1M in 80 days?

nitro
More...

I did at first also -- I think he was quoting someone else that claimed to know of a method to do it in 80 days with little risk :p

100k into 250k is very doable, I just don't think I would try to be doing it in 80days though :) Whats the hurry -----> slow and steady wins the race in this game...

PEACE Nitro,
Commisso
 
Hindsight being 20/20.....you could have turned $5k into $200,000 overnight last week with some o.t.m. EDS Sep puts. THere actually was some open interest b4 this ball went over the back wall for a home run.........
 
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