Lots of loners, nev'dowells, and the spirits of folks who lost it all haunting this board. Don't pay much attention to the negativity. Good luck and keep your job or get another if u want to be close to the markets. Trade on the side! surf
When is the right time to quit your job and trade full time?
- Thread starter jinxu
- Start date
Lots of loners, nev'dowells, and the spirits of folks who lost it all haunting this board. Don't pay much attention to the negativity. Good luck and keep your job or get another if u want to be close to the markets. Trade on the side! surf
I don't understand how a forum for "traders" has so many people with such crappy math skills. This isn't complicated people, there's just 2 main variables. Rate of return, and how much you want to spend in a year.
*obviously it's a little different for each person, but we can make some common assumptions that are reasonably accurate.
Start with 1,000,000 and make 10% a year, every year, forever
- Deduct 30% for taxes = You now have 70,000
- Leave 2% in the fund to cover long-term inflation = You now have 50,000
- Leave 3% in the fund so your principle grows a little = You now have 20,000
You want to live your life spending 20,000 a year? Are you planning on living in the ghetto with 6 room mates and eating Mcdicks every meal?
Ok, let's say you're a better "trader" than that, and you want to spend more every year.
Start with 500,000 and you want to spend 50k a year
- Leave 2% in the fund to cover inflation = 50,000 spending now needs 60,000 after tax
- Leave 3% in the fund so the principle grows = 60,000 after tax is now 75,000 after tax
75,000 after tax requires 107,000 before tax.
107,000 / 500,000 = a required rate of return of 21.4%
You think you can make 21.4% a year, every year, forever, starting in 2015 after the great bull market is over? Ok, be my guest
starting with 1,000,000 in my mind is bare minimum. You'd still need to make 20% a year ever year, FOREVER to have a reasonable amount of spending money. And if you have even one negative year along the way, those drawdowns are incredibly amplified when you're pulling out spending money. It's likely one negative year ends your run and you have to find a job.
Anybody here want to run the math on starting with 250,000 ? It's hilarious how high your rate of return needs to be, EVERY YEAR, just to break even. Yeah, I'm sure the average dude on Elite Trader is up to the challenge
*obviously it's a little different for each person, but we can make some common assumptions that are reasonably accurate.
Start with 1,000,000 and make 10% a year, every year, forever
- Deduct 30% for taxes = You now have 70,000
- Leave 2% in the fund to cover long-term inflation = You now have 50,000
- Leave 3% in the fund so your principle grows a little = You now have 20,000
You want to live your life spending 20,000 a year? Are you planning on living in the ghetto with 6 room mates and eating Mcdicks every meal?
Ok, let's say you're a better "trader" than that, and you want to spend more every year.
Start with 500,000 and you want to spend 50k a year
- Leave 2% in the fund to cover inflation = 50,000 spending now needs 60,000 after tax
- Leave 3% in the fund so the principle grows = 60,000 after tax is now 75,000 after tax
75,000 after tax requires 107,000 before tax.
107,000 / 500,000 = a required rate of return of 21.4%
You think you can make 21.4% a year, every year, forever, starting in 2015 after the great bull market is over? Ok, be my guest
starting with 1,000,000 in my mind is bare minimum. You'd still need to make 20% a year ever year, FOREVER to have a reasonable amount of spending money. And if you have even one negative year along the way, those drawdowns are incredibly amplified when you're pulling out spending money. It's likely one negative year ends your run and you have to find a job.
Anybody here want to run the math on starting with 250,000 ? It's hilarious how high your rate of return needs to be, EVERY YEAR, just to break even. Yeah, I'm sure the average dude on Elite Trader is up to the challenge
Last edited:
You think you can make 21.4% a year, every year, forever, starting in 2015 after the great bull market is over? Ok, be my guest
Dude, I'm not disagreeing with some of your points - but it's already been pointed out that the way you're describing things is like a long-only buy-and-hold investor.
Large amounts of people here don't even trade stocks - they trade futures, they go long and short, they don't depend on bull vs bear, and in fact the more volatility the better.
Addiionally, Vixtrader has shown with numbers why there are no "old, bold traders". At some point, they re-allocate to lower risk (thus return) assets & strategies. They know better and are probably glad that they ended up at the right tail of the distribution.
As for alternative assets/strategies, put it in context by using the Security Market Line but imagine additional dimensions of time frame,strategy type and level of automation. Every financial asset/strategy is beholden to the greater bull from whence they came.
Excuse me. I need chicken heads and pigs blood for tomorrows trading.
As for alternative assets/strategies, put it in context by using the Security Market Line but imagine additional dimensions of time frame,strategy type and level of automation. Every financial asset/strategy is beholden to the greater bull from whence they came.
Excuse me. I need chicken heads and pigs blood for tomorrows trading.
Last edited:
What you made in one day is almost completely irrelevant; what really matters is the return-per-unit-time you can reasonably expect in the future. And that return will probably always decline, unless you continually improve, as the market is only getting more efficient over time, owing to ever-improving algorithms, human traders, etc.
Your original question is unanswerable on an anonymous forum such as EliteTrader, as only you can know your strategies' potential and your styles' potential, as well as your personal tastes. Your ability to dispassionately evaluate these factors will be one of the biggest determinants as to whether you:
1) (perhaps rationally) decide to stick with your day job
2) succeed at trading, or
3) simply blow your money and start beating the pavement for another "boring" job a couple of years from now.
VIX - You may want to check your own maths for the 1st case with 3% retained. You end up with 40,000 USD (70,000 - 3% of 1 M USD = 40,000) which I guess is near the average US wage.
You also seem to be missing a few important points:
- Your returns are reasonable on the total underlying amount but you can borrow money or use options etc to get the equivalent underlying. Past few years I have been borrowing from broker at ca 1%.
- You dont have to be a buy and hold investor and just restrict yourself to the stock market. Up, down or stuck in trading range it doesnt matter since you can make money with the right strategy.
You also seem to be missing a few important points:
- Your returns are reasonable on the total underlying amount but you can borrow money or use options etc to get the equivalent underlying. Past few years I have been borrowing from broker at ca 1%.
- You dont have to be a buy and hold investor and just restrict yourself to the stock market. Up, down or stuck in trading range it doesnt matter since you can make money with the right strategy.
Read my postings and you know the answer already.
I think I have much more daytrading experience than you. And I still survive. You apparently had to stop. Or maybe even never started.
Last edited:
I don't understand how a forum for "traders" has so many people with such crappy math skills. This isn't complicated people, there's just 2 main variables. Rate of return, and how much you want to spend in a year.
Anybody here want to run the math on starting with 250,000 ? It's hilarious how high your rate of return needs to be, EVERY YEAR, just to break even. Yeah, I'm sure the average dude on Elite Trader is up to the challenge
With maths you can prove anything. It only depends of you assumptions. Take low figures and you can proof that he cannot survive, take high figures and you can proof he will be a billionaire.
The only real proof is the track record.
And about "FOREVER". If I can make $25,000,000 in a few years, I don't care that it is not FOREVER. It is enough to survive the rest of my life in fairly wealthy conditions. I don't chase the eternally repeating high returns. So this nonsense of "nobody can make at least 20 years consistenly high returns" is for stupid people. It is not necessary to have them for a good life.
Daytraders make much more than 10% a year, even more than 10% a month, if not they should stop and find another job. Use the 10% a month and calculate again, the result will be "slighty" better I think. But that does not fit in your story..... Or maybe you cannot calculate the result.....
Ok. You may-- but i think u are taking your personal experience as the baseline rather than looking at the business as a whole. surf
They only experience that I know and that I can check is my personal experience. All the rest is from what I hear and so uncontrolable.
Daytrading is very difficult and only very few survive it in the LT. But people who want to give it a try should not be told that it is by defintion a losing game. People should use common sense, limit the risc and try if they want to. Without trying you never know what it will give for YOU. What it gives for others is not important. I am the living proof that you can make money, I am also the proof that you can wipe out your account, and that it can take years before the real money comes in. But I am glad I tried and it made my life much better.