With a 40k account.
- Thread starter tyler19
- Start date
There is a possibility to consider what is there to make.
For position trading stocks.
In stocks you could look at the price change per day that is occurring in a set of stocks that you might choose to trade. Look at it as a percentage. Money is made by price change so that is a place to look.
This gives you a way of seeing how your daily profits in your account will be building up.
Once you examine this, then you can apply it to the annual income you will be receiving. This is determined by the compound interest formula in general.
Since people have to work up to being good traders you will not make what the market offers to you for several reasons. You can make a list of all these reasons and then consider what happens when you get that particular reason to not matter anymore.
You can see that all the above expressed as logic is not easily understood or turned into a practical set of things to do as a regime.
But it is true that you do have the ability to examine issues and one by one get organized to make money.
Some self examination questions are helpful:
1. Why don't I consider or make use of the most powerful money maker in the compound interest formula?
2. Why did I focus on the daily take? How much is it costing me to do this?
3 and 4. How important is the initial capital and when should I take it out of my account forever? Why?
5. and 6. Why don't I have a method of finding the best money makers to trade in stocks? Do scalpers even trade any good money makers?
For commodities see if you can get the daily take from the following chart. I numbered the trades for you (the point where profits are taken and the next trade begins.) Use the 40,000 for margin to trade 10 contracts. Make a list from 1 to 30 and write down the number of points for each. Then add the points and multiply by 50 dollars per point. Then multiple by 10 for 10 contracts. You will find that the total days profit for last friday in the attachment is a good size number. The market H - L = about 7 points for the day.
Divide the profit for the day by the 40,000 dollars of margin in your account at the beginning of the day.
Keep adding contracts until you get to about 30 or so and hold on that number for the rest of the time. This means that you will be dumping so many dollars weekly into another account (stock trading).
The stock trading account can handle about 8 streams of 100,000 shares each before you have to go to another level of investing (sector rotation @ 4% a week for 4 to 6 week holds.)
Ok. Stay away from the markets and just do simulations. If you ever do get into trading, I would advise not using margin, but if you have to , please do not use anything more than 3 to 1. You should find markets where you can do this. With 2000, it may only be the cash forex market--I don't know as I don't trade that--only futures. I would use position trading and stay in positions for long periods of time so that slippage is not a concern(terrible in the forex is what I've heard) and commissions are not as much of a concern. The bottom line though is to first learn to set risks accordingly, then with a good entry signal, you WILL make money. --just not 400 a day.