What are realistic goals for an 18-year old swing/position trader?

greg, just concentrate on not losing money, because at 100:1, if you are not really good already (which takes years, or insane luck) you will lose at first. The problem with luck is that if you somehow do manage to turn 1200 into 500,000 ( which is the amount of capital i need to make a living trading for myself), you will then lose that instead of the 1200.
So i say take that 1200, put 100 in a fxcm account at 400 to 1, trade 1000 unit trades to learn stuff and gamble, take 100 and use it to take a girl out who won't mind you getting upset with charts, and having to "check the market" for the rest of your life. Cause after you lose money having a pretty girl to tell you it's ok makes everything better (esp. when you're 18).

then take the other 1000, put it in an account at OANDA and trade 100 unit trade sizes, at these levels you can be wrong many times on entry, and it will take you a while to blow up. If blowing up is a real risk then you are trading with too much risk. Odds are is that you won't make enough to trade for your self right out of college.

Of course try to make your fortune now, because that would be awesome and it is what i orig. wanted to do but found that it was unrealistic. What you can hope for is to get good enough that you can 1, get hired at an entry level junior trader job or something like that, and move up quickly, if you can make them money, they will make you money. True (long term successful) traders are hard to come by, and many a fund is willing to pay a pretty penny for someone who can show performance. and/or 2 use you track record that you will have developed over the next few years to get some clients in a few years, maybe take some family money while still in college (once you know you can win of course). If you have a good track record there are lots of people who will give you lots of money to trade for them.

If you can get good enough you can basically write your own ticket. Don't focus on making money, focus on getting good and consistent, every day tell yourself, that you are going to try to be the best and just keep learning. There is always a better way, or tweak that will make your trading better, just never stop learning.
 
Greg,

Not to piss on your parade or anything - I'm all for your success, man, and I do envy you, I wish I could be 18 again, knowing what I know now.

You got that 1:250 margin is insane? Good. Now get this: 1:100 margin is still way insane, forex or not forex. Yes you can double in no time with 1:100 - you can also blow up in no time. All it takes is getting caught once with a position when a central banker makes a hawkish comment at some conference you have never heard of and you're toast.

Slippage can get to the 10's and - in news announcements - to the low hundreds. Think of losing 140 pips in one second with 1/10th of your account on 1:20 leverage and what that does to your psyche. Now think of having half your account on 1:100 and you end up in the poorhouse on your way to the lunatic asylum (ok, a hyperbole, but you get the idea).

Breakeven in the first year for a new trader (yes, someone who's studied the market for years and paper traded for months IS a NEW trader) is not amazing, not unheard of, but quite good and certainly better than 99% of new traders (and possibly better than 80% of many "experienced" traders).

100% in the first (or any) year is AWESOME. 100% on 1,200 USD over a year is a bitch (about 25 dollars a week).

1,200 a month on a job (in the US) is easy for any intelligent, educated, hardworking person.

Working and saving does not sound as alluring as doubling your paper money, but it will get you farther faster. Not going live until you get 10 winning weeks in a row is a sound (and maybe a bit unrealistic, try 8-9 out of ten with no horrible week) idea. Not starting trading until you've saved 5,000 (10-15 grand would be even better) would be a nice addition, your odds of making it through the (live) learning curve increase tenfold with just a few months of working and saving.

ToS is a reputable firm and they won't (likely) scam you. However, in my view you'd be better of by trading forex futures, not spot (that way you have a regulated market AND volume analysis).

I hope that a) you follow my advice; b) that if you don't - hey, I wouldn't blame you, I've been 18 too - you prove me wrong.

Best trading,

Jorge
 
Quote from Sarvise:

Greg,

Not to piss on your parade or anything - I'm all for your success, man, and I do envy you, I wish I could be 18 again, knowing what I know now.

You got that 1:250 margin is insane? Good. Now get this: 1:100 margin is still way insane, forex or not forex. Yes you can double in no time with 1:100 - you can also blow up in no time. All it takes is getting caught once with a position when a central banker makes a hawkish comment at some conference you have never heard of and you're toast.

Slippage can get to the 10's and - in news announcements - to the low hundreds. Think of losing 140 pips in one second with 1/10th of your account on 1:20 leverage and what that does to your psyche. Now think of having half your account on 1:100 and you end up in the poorhouse on your way to the lunatic asylum (ok, a hyperbole, but you get the idea).

Breakeven in the first year for a new trader (yes, someone who's studied the market for years and paper traded for months IS a NEW trader) is not amazing, not unheard of, but quite good and certainly better than 99% of new traders (and possibly better than 80% of many "experienced" traders).

100% in the first (or any) year is AWESOME. 100% on 1,200 USD over a year is a bitch (about 25 dollars a week).

1,200 a month on a job (in the US) is easy for any intelligent, educated, hardworking person.

Working and saving does not sound as alluring as doubling your paper money, but it will get you farther faster. Not going live until you get 10 winning weeks in a row is a sound (and maybe a bit unrealistic, try 8-9 out of ten with no horrible week) idea. Not starting trading until you've saved 5,000 (10-15 grand would be even better) would be a nice addition, your odds of making it through the (live) learning curve increase tenfold with just a few months of working and saving.

ToS is a reputable firm and they won't (likely) scam you. However, in my view you'd be better of by trading forex futures, not spot (that way you have a regulated market AND volume analysis).

I hope that a) you follow my advice; b) that if you don't - hey, I wouldn't blame you, I've been 18 too - you prove me wrong.

Best trading,

Jorge
More...

How often do these big moves from "comments happen?" I have decided a while back that 100:1 margin required a stop on every trade, no exceptions. In forex, will gaps be able to take me out on this kind of news or sudden turns? (Note: I also decided a while back that I don't hold any positions over the weekend, so this limits exposure)

Also, 10 straight weeks of profits I know is a hard goal to shoot for, but if nothing else I should really solidify a scalping method by then (if you could practice being right over 4 hours thousands and thousands of times to fix it, but you could only try to perfect a 10-year investing strategy 6 times over ever-changing markets, which strategy makes sense?), which should regulate my returns closely enough to trade live.

You are quite close on my goals. on $1000, my goal is 5% per week net, $50 start. I can't live off that initially, but when I'm bored I have an excel spreadsheet that includes expected payments and taxes over the next four years, and profits after getting out of college... (you get the drift).

Anyway, even if 100% on a grand is a bitch, think about investing in an ETF! I still laugh at that one.

Time will tell. Thanks for your answers!

Best Regards,

Greg
 
Can anyone give me insight into real slippage? Many people tell me thsi is a big deal, but I haven't heard any detail. Forex, options, stocks... Normal trading, news, high volume, low volume... What should I be concerned about?

I only trade forex and high-volume options (my list is only 35 stocks right now, the rest didn't pass my tests of bid-ask spreads, volume, and open interest over a few different time periods). Thanks!
 
Don't rule out etf's, at least I don't think so. Well rule out lots of them, but for instance, DXD is a dow 2x short, which if you bought 100 shares of it back when I bought it in October and road it to it's peak (i say the peak, because I think it is going to go much higher) you would have made over 50%.

note: In reality i got 1/4 position at 46, 2/4 at 50, and 1/4 at 60. I'm looking too add more if it falls any lower.

I used to try to trade with lots of leverage like you want to , but in the long run its just not worth it. cause it doesn't work.
You can use high leverage on a small % of your capital in your case one or two hundred dollars. You want to build a track record that shows stable growing low risk returns.

Hedge funds that make 20-30% a year consistently (or mostly so, as is always the case) are few and far between. So why not try to make that much, and start one of those.
If they can't make 100% a year, what makes you thank that you can do that over and over, for a while until you build some capital, during college?
think LOW leverage. Trust me, you'll thank me later.
 
Anyway, about slippage...
If I were you I would focus on strategies where slippage doesn't matter so you don't have to sit in front of the screen all day. if your are trading a stock from 30 up to 80 over a year it does not matter if you get slipped a penny or two.

Someone else also said it but make sure to get low commissions because they can have an impact with small monies.

I like ETF's of indexs for longer term,stuff with small monies, forex too. options are good.
 
kid ... why don't you write to CRAMER ( the booyah gentleman )

ask him if what you intend to do makes any sense

if he tells you not to waste your free time and or what little money you have trying to become while in college the next

CRAMER then please follow his advise

good luck kid

PS ... does anyone know what percent of college age kids are doing what this young ET poster wants to do ?
 
Quote from TraderGreg:

I have been studying the market for what I estimate to be around 300-400 hours in the past 7 months. I am opening my trading account in the next few weeks, after my last sessions of paper trading. I will have four years of college during which I plan to grow my trading account, and be trading professionally immediately after college. My current goals are 2% a week on average for the 4 years, partly due to the fact that I am starting out with only $1500, and commissions are $10 per entry and exit, and partly because I know I am still an amateur. Anyway, over four years, I see (1.02^50)^4 coming out at 52.48 times my principal of 1500 for a trading account totaling $78700 roughly. Withdrawals should not be necessary as I will hold a part-time job, although I am not sure about taxes. I am still a dependent as I am in college. Any input will help. Thanks.
More...

With novices there is really no point in giving you advice, because you are going to go ahead and do what you think is right anyway, and you will dismiss the opinions and experience of anyone who says things you don't want to hear. All I will recommend is this:

1) Trade the MINIMUM size possible until you are consistently profitable for 6 months+. If that means trading a measly 1 share, so be it. I am almost certain you will trade more than minimum size, and in 1 year you will regret having done so. But at least you can't say you weren't warned.

2) Get the cheapest commissions you can.

3) Keep a detailed trading journal with your real-time thoughts on market direction, and feelings about entering and then having on a position, and update it each day, week, month, quarter, and year. It may help if you do this on Elitetrader in the journal section - it's a good way to enforce discipline. The better your record-keeping, the faster you will learn and the more ideas, techniques and experience you will pick up.

4) After exiting, do a post-mortem on every trade you did, and note down what went right, what went wrong, why it did or didn't go according to plan, what you learned from it, and how to avoid any similar mistakes next time. This is also a great learning tool.

5) Make your goal to survive as long as possible without busting out, NOT to make the highest returns possible. You cannot learn well if you have no capital. Chasing high returns as a novice is the fastest way to go broke. Being sat there working a McJob to save up another trading stake, unable to participate in the market, is like Chinese Water Torture. You do NOT want to be in that position. Far better to have a $500 profit in your first year, and at least still be able to play the markets and learn, rather than shoot for a $10k profit and blow up. Imagine if some incredible trading opportunity comes along, and you are busted out, sitting on the sidelines because of earlier mistakes on marginal trades? So - survival first, consistent profits second, home runs third.

6) Work harder. 300-400 hours is NOTHING. That's about 6 weeks work for a full-time trader (12 hours per day * 6 weeks * 5 days per week = 360 hours). If this took you 6-7 months, that means you need to increase your work ethic TENFOLD to even be on the same level as your competition. You will have a job so you can't really do that, but if you are not doing at least 4 hours trading study & preparation each night, and 10 hours each on Sat & Sunday, then you have no hope in hell. As an example, it's 10am on Sunday here and I've been working since 9 - just taking a quick break to check Elitetrader, then back to working on my plan for next week. If you are sat around sipping mint juleps or playing football, you can forget making money trading your own account.

7) Come back here in 1 year and let us know how you did.
 
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