you need to trade a minimum of 77k and 10 lots to make a decent living

C

chewbacca

for all the people that ask:

assume decent living = 100k - 200k minimum to make up for the amount or risk, uncertainty, and ridicule you expose yourself too

assume you average 1-2 points a day trading very conservatively and very consistantly

you need at least 10 lots on ES

sub ten lots is good to practice on

10 lots is 770k notional value - conservative use of margin means you need at least 77k capital to make money
 
I whole heartedly agree with your 10% equity guideline but if you can make more than 1 to 2 pts per day then you can dial your contracts back and minimize your risk further.

If you can't do more than that, or you don't even care to try then dailing the contracts up is the way to go. The nice thing about the fut's market is you can size up without liquidity issues.
 
Quote from chewbacca:

for all the people that ask:

assume decent living = 100k - 200k minimum to make up for the amount or risk, uncertainty, and ridicule you expose yourself too

assume you average 1-2 points a day trading very conservatively and very consistantly

you need at least 10 lots on ES

sub ten lots is good to practice on

10 lots is 770k notional value - conservative use of margin means you need at least 77k capital to make money
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WTF are you talking about chewwy?

1) your definition of "decent living" is definitely not mine.

2) to make up for the amount or risk, uncertainty, and ridicule you expose yourself too
HUH?? Name 1 profession or business that has no risk, uncertainty (of something), and ridicule. Last I checked the waitress at my local breakfast joint, my local mechanic, attorney, accountant, doctor, postman, banker, etc etc etc had all these things associated with their CHOSEN professions.

3) assume you average 1-2 points a day trading very conservatively and very consistantly
If this is what you AVERAGE trading full-time, you have other issues to deal with.

4) you need at least 10 lots on ES
sub ten lots is good to practice on
Ummm, see item 3 above. And if your AVERAGE is 1-2 points a day trading full-time with size of 10, you have MANY issues to deal with!

5) 10 lots is 770k notional value - conservative use of margin means you need at least 77k capital to make money
Who cares what the notional value is! You profit or loss has NOTHING to do with notional value. We are talking about futures contracts right? If I DAYTRADE 1 ES and I "put up" $500 to do that, I win or lose 12.50 per tick. If YOU "put up" $7700 to DAYTRADE 1 ES, you will win or lose $12.50 per tick. You used the word DAYTRADING. Even if this was not what you meant (you hold overnight), notional value still means nothing. Your market risk is exponentially increased, but the risk is STILL not based notional value. You will win or lose $12.50 per tick regardless.

Good trading to all, and a happy new year!
Osorico :)
 
You're mostly correct. Since most people starting out in trading are in high school and college, the "necessary" first year income can be closer to ~$50,000 as long as you don't spend too much on frivolities. Instead of having to earn ~$10,000 each and every month, month after month after month, it's more likely that someboby will produce an exponentially growing sequence, i.e. 500-700-0-1000-(-800)-1100-1500-1000-1600-2000-2500-5000-3000, with some drawdowns along the way as their position size increases. I have to study for my trigg final tommorrow. Catch you guys later.
 
I can almost guarantee that anyone short of Paul Tudor Jones who tries to trade the ES with $7700 in account equity per contract will blow out.

We have discussed many times the idea that it is so easy to net 1 or 2 ES points per day. It may look easy, but if you can do it consistently over time, Goldman has a seven figure job waiting for you. $50 per day times 200 trading days on a $7700 account equals approximately 150% return. Sure, you can do it in a hot, trending market. But you will give it all back when the market starts to chop. All you need to do is look up the managed funds and hedge fund reports to see how many professional traders do it consistently. Answer: none. If they did, they would soon control all the money in the world.
 
<i>"$50 per day times 200 trading days on a $7700 account equals approximately 150% return. Sure, you can do it in a hot, trending market. But you will give it all back when the market starts to chop...</i>

+2pts per day blended, averaged = +500pts in a calendar year.

If all of those are made in a 3 - 4 month period while the rest is churn or drawdowns, it is still +2pts averaged per day. Key is surviving drawdowns.

<i>"... All you need to do is look up the managed funds and hedge fund reports to see how many professional traders do it consistently. Answer: none. If they did, they would soon control all the money in the world."</i>

No they wouldn't. Even the ES has intraday liquidity limits, and they are smaller than what appears. Ability to fill 500 contracts per turn <b>on every signal in every level of volume</b> with acceptable slippage is questionable. Watching order flow on T&S clearly demonstrates that.

That may take entries in two - three pieces, that may mean turning 500-lots couple times per day, that may mean limiting capital to x$$ times whatever is reasonable margin per contract.

Regardless, any intraday trader will quickly cap out max margin no matter how great they are. 300% annual returns cannot handle one dollar more than 50% annual returns when it comes to max number of ES contracts on every single trade before slippage is an issue.
 
Quote from AAAintheBeltway:

I can almost guarantee that anyone short of Paul Tudor Jones who tries to trade the ES with $7700 in account equity per contract will blow out.

We have discussed many times the idea that it is so easy to net 1 or 2 ES points per day. It may look easy, but if you can do it consistently over time, Goldman has a seven figure job waiting for you. $50 per day times 200 trading days on a $7700 account equals approximately 150% return. Sure, you can do it in a hot, trending market. But you will give it all back when the market starts to chop. All you need to do is look up the managed funds and hedge fund reports to see how many professional traders do it consistently. Answer: none. If they did, they would soon control all the money in the world.
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It's a good point. How does a person know that the market is offering '1 - 2 points' at any given time? Coin tossing? The '1 - 2 points' idea is pushed around the circuit by who? People using calculators?

Dream world trading at its most effective.
 
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