When is the right time to quit your job and trade full time?

[VIXTrader]

Yes let's do some math because apparently you're missing the point...

but 25k of margin (with 75k in reserve) being used to control 525k notional or 525k of margin being used to control 525k notional is still 525k notional. The unleveraged guy obviously has more protection against the absolute most extreme of moves (so extreme it's beyond flash crash extreme), that's a given, everyone using leverage already knows this. If the market is so volatile that one can be exposed to such utterly ridiculous moves they might as well not put *any* money in it leveraged or unleveraged. At a certain point you've got to have a pragmatic outlook on just how extreme things can get otherwise you might as well not trade period. Buy OTM options if you're that worried about it.

I can't believe I'm arguing with someone who doesn't understand what leverage means. This god damn forum man, I swear. It is just chalk full of first week traders...


Person A has 1,000,000 of real cash in his account

Person B has 100,000 of real cash, and leverages the rest so he trades with 1,000,000 (you said 6-20x leverage, so 10x is a fair statement)


- If they both have a 10% winning year, no harm no foul. They both make 100,000, they can both withdraw money from their trading account to pay for rent, food, living, etc. Not much of course, because after taxes, inflation, leaving a bit in the fund for capital growth etc, you're left living the hobo life, but still, you're ok that year.


- If however they both suffer a 10% loss in a single year:

Person A loses 100,000, and has 900,000 left over to regroup the next year

Person B loses 100,000 and is completely F'ing flat broke. Can't buy a slurpee



yeah, there about the same thing... Good call genius



5 x leverage means a 20% losing year wipes you out completely. 10 x leverage means a 10% losing year wipes you out completely.

You've actually used some examples of over 20 x leverage, meaning a 5% losing year and you're BROKE. Literally, zero cash left in the account, and mommy needs to pay your rent for you. LOL

And in your case, if you're trading hours, days on es futures, it's all the same concept. Leverage makes you susceptible to moves that will wipe you out. Tiny moves that happen all the time will be amplified to gut wrenching levels.



I'd be shocked if you could even tie your own damn shoes. Does your mommy still cut up your food into little bite size pieces for you? Hell, I bet she chews it for you and spits it into your mouth as well...


As I said before, leverage doesn't suddenly make an unsustainable system sustainable. It just works in good times. In bad times, it works the OTHER WAY genius. It multiplies the pain. No way of getting around the double edged sword. Leverage is for losers. If you can't make decent returns safely, you shouldn't be trading

And in your case, if you can't understand grade 8 math, you also shouldn't be trading

 

[i am nobody]

I can't believe I'm arguing with someone who doesn't understand what leverage means. This god damn forum man, I swear. It is just chalk full of first week traders...


Person A has 1,000,000 of real cash in his account

Person B has 100,000 of real cash, and leverages the rest so he trades with 1,000,000 (you said 6-20x leverage, so 10x is a fair statement)


- If they both have a 10% winning year, no harm no foul. They both make 100,000, they can both withdraw money from their trading account to pay for rent, food, living, etc. Not much of course, because after taxes, inflation, leaving a bit in the fund for capital growth etc, you're left living the hobo life, but still, you're ok that year.


- If however they both suffer a 10% loss in a single year:

Person A loses 100,000, and has 900,000 left over to regroup the next year

Person B loses 100,000 and is completely F'ing flat broke. Can't buy a slurpee



yeah, there about the same thing... Good call genius



5 x leverage means a 20% losing year wipes you out completely. 10 x leverage means a 10% losing year wipes you out completely.

You've actually used some examples of over 20 x leverage, meaning a 5% losing year and you're BROKE. Literally, zero cash left in the account, and mommy needs to pay your rent for you. LOL



I'd be shocked if you could even tie your own damn shoes. Does your mommy still cut up your food into little bite size pieces for you? Hell, I bet she chews it for you and spits it into your mouth as well...


As I said before, leverage doesn't suddenly make an unsustainable system sustainable. It just works in good times. In bad times, it works the OTHER WAY genius. It multiplies the pain. No way of getting around the double edged sword. Leverage is for losers. If you can't make decent returns safely, you shouldn't be trading

And in your case, if you can't understand grade 8 math, you also shouldn't be trading

Leverage depends, for intelligent people at least, from the qualifications of the trader. A trader should first proof, with low or even without leverage, that he can control his risk. If he can, he can take leverage, if he cannot he should continue to practice with low leverage.
So your discussion about leverage is wrong, or at least incomplete.
And your statement leverage is for losers, is complete nonsense, and shows a lack of intelligence. Leverage on it's own cannot be discussed without additional elements. Using leverage and survive is the ultimate proof of high qualified traders. In that case leverage is for winners. Risk depends from what you do but also from who is taking the risk.
Some people have less risk with leverage 5 than others without leverage. The reason is simple: there are small idiots and there are big idiots.

I already wrote in past: if I drive at 100 MPH it is more safe than my girlfriend driving at 50 MPH. Put a driver in the car that never saw a car, and you will see what causes the risk.

I think nobody said that a losing system could become profitable. So why do you discuss this? Maybe you missed 8 grade reading and understanding text?

 

[onemoreshot]

What a retarded pissing match.

 

[Mike Okistini]

Time for a little truth injection here.... the OP should know on his own the answer to this question but just came here to get a pat on his back and his nuts tickled. Anyone coming here proclaiming to be an experienced trader but looking for tips from anonymous posters on when to quit their job and trade full time is a douche waffle whose sack isn't large enough to make it in this business. Either you can make money and have enough to live on or not.

So pull up your diapers and stop taking a piss on all of us and go trade already.

 

[onemoreshot]

Time for a little truth injection here.... the OP should know on his own the answer to this question but just came here to get a pat on his back and his nuts tickled. Anyone coming here proclaiming to be an experienced trader but looking for tips from anonymous posters on when to quit their job and trade full time is a douche waffle whose sack isn't large enough to make it in this business. Either you can make money and have enough to live on or not.

So pull up your diapers and stop taking a piss on all of us and go trade already.

+1 I doubt anybody on this thread that claims they are so awesome can back it up.

 

[sellindexvol66]

Time for a little truth injection here.... the OP should know on his own the answer to this question but just came here to get a pat on his back and his nuts tickled. Anyone coming here proclaiming to be an experienced trader but looking for tips from anonymous posters on when to quit their job and trade full time is a douche waffle whose sack isn't large enough to make it in this business. Either you can make money and have enough to live on or not.

So pull up your diapers and stop taking a piss on all of us and go trade already.

i gave u your first like just based on the well placed dick references.

 

[i960]

I'm done arguing with this dude about leverage. He obviously doesn't get the concept of a working trading margin and notional exposure plus likes to argue with nonsensical strawmen arguments in attempts to boost his point. Use leverage reasonably and you'll be fine.

 

[VIXTrader]

i960, in your case you are talking about using over 20 x leverage. That means, you are saying you can go forever, literally, FOREVER, without having a single 5% portfolio drawdown at any time in your life. And even a 1 or 2% portfolio drawdown is going to hurt bad at that much leverage.

It's abundantly obvious you're brand new to trading so you might actually believe you can avoid a 5% portfolio drawdown for the rest of your life. But when you get a little experience, have traded through several different kinds of market cycles, and you can take off your training bra, you'll realize that EVERYBODY suffers 5% portfolio drawdowns at some point or another.

You may not necessarily be correlated to this bull market, but every method of trading has it's own version of bull markets and bear markets. Repeat, EVERY method of trading will have it's own version of a bear market. You will suffer drawdowns, no doubt about it.


I'd always prefer to have a normal conversation, but you don't even grasp the most basic of concepts, so... Don't underestimate the power of public ridicule. What I've said to you, although you don't like how I'm saying it, will likely save you some money in the future.



Before a person even considers using leverage, they should first be able to show a verifiable track record of at least 5 years proving that the use of leverage would have improved results.

If you can do that, and that's a big IF because guys like i960 won't have a 5 month track record let alone 5 years, but IF you can prove that, then you can dip your toes into more leverage to boost results.



A good rule of thumb (and it's obviously just a rule of thumb) even a good trading system can always lose 1/3 of how much it can make.

If you're trying to make 30%, you better be able to sustain a 10% portfolio drawdown, even if you're a brilliant trader.

If you're trading system can and has returned 50%, at some point you'll also probably suffer a 16% or so drawdown...


There is no such thing as a system that can only make money and not lose occasionally as well. i960 thinks he can go forever without a 5% drawdown. LOL

 

[rallymode]

i960, in your case you are talking about using over 20 x leverage. That means, you are saying you can go forever, literally, FOREVER, without having a single 5% portfolio drawdown at any time in your life. And even a 1 or 2% portfolio drawdown is going to hurt bad at that much leverage.

It's abundantly obvious you're brand new to trading so you might actually believe you can avoid a 5% portfolio drawdown for the rest of your life. But when you get a little experience, have traded through several different kinds of market cycles, and you can take off your training bra, you'll realize that EVERYBODY suffers 5% portfolio drawdowns at some point or another.

The only thing abundantly obvious is that you cannot differentiate between portfolio management and daytrading in lieu of having a regular job. That's not necessarily a bad thing, people who manage OPM like yourself tend to avoid leverage as that adds unnecessary volatility to their equity curve. Daytraders on the other hand dont care about smooth equity curves or drawdowns, they care about PnL distribution. I can assure you that no daytrader worth a damn is shooting for a 30% return on a 10% peak-through, that's investing not trading.

A good rule of thumb (and it's obviously just a rule of thumb) even a good trading system can always lose 1/3 of how much it can make.

Again, you seem confused on the subject at hand. Perhaps you have never been a daytrader yourself or perhaps you were only daytrading to establish a record that OPM will consider attractive but if you are good at trading the intraday frequencies you are likely hitting 10x your peek-through in which case leverage is the only thing that will propel you to the big leagues, not grinding it out and playing it safe. Why on earth would i spend my entire day looking at the screen for a 30% return? I can simply give people like you that money and get a regular job or better yet enjoy my life.

Let me give you some insight to the mind of a daytrader and how they actually think. And, since you like to use math, here is some. 100% return on 10% drawdown. If you say thats not possible then that just shows me you arent qualified to speak on behalf of daytraders. So if i dial up the leverage 5x assuming the capacity is there and wire out my profits every time i hit 100% on capital how many times per year am i allowed to hit my max DD and still have a profitable year?

 

[sellindexvol66]

The only thing abundantly obvious is that you cannot differentiate between portfolio management and daytrading in lieu of having a regular job. That's not necessarily a bad thing, people who manage OPM like yourself tend to avoid leverage as that adds unnecessary volatility to their equity curve. Daytraders on the other hand dont care about smooth equity curves or drawdowns, they care about PnL distribution. I can assure you that no daytrader worth their damn is shooting for a 30% return on a 10% peak-through, that's investing not trading.



Again, you seem confused on the subject at hand. Perhaps you have never been a daytrader yourself or perhaps you were only daytrading to establish a record that OPM will consider attractive but if you are good at trading the intraday frequencies you are likely hitting 10x your peek-through in which case leverage is the only thing that will propel you to the big leagues, not grinding it out and playing it safe. Why on earth would i spend my entire day looking at the screen for a 30% return? I can simply give people like you that money and get a regular job or better yet enjoy my life.

Let me give you some insight to the mind of a daytrader and how they actually think. And, since you like to use math, here is some. 100% return on 10% drawdown. If you say thats not possible then that just shows me you arent qualified to speak on behalf of daytraders. So if i dial up the leverage 5x assuming the capacity is there and wire out my profits every time i hit 100% on capital how many times per year am i allowed to hit my max DD and still have a profitable year?

rally,

i see it must be too cold to be running that Sea Ray at bikini island....yet