@Bobiz Thanks for the thought-provoking post. If this mess had happened when I was over $15k in the account, I might have actually done what you said, and not worried about the real estate. But I really need about $6k per month to live between the many mouths to feed and the house to pay for, etc. That is about $300 per trading day. My average net gain on the account for the last trading month was only about $100. So I had a ways to go for sure. $6,000 x 2% is just $120. In a "normal" month I make about $10k from real estate. But at 2% per day trading, which I am confident I can do, I need $15k in the account to make just over $6k per month. To fully replace my normal real estate income, I would need $22k in the account (and keep trading well). I know two guys right now who can make over 5% per day pretty consistently. But I am just not there . . . . "Comatose Casas" is a great name for a real estate brokerage I think. LOL. Maybe I am just dreaming, but under the circumstances, "Rebounding Realty" does sound pretty good. But seriously, why keep going with the brokerage? Now you really have me thinking... and I am dangerous when I start thinking... I agree 100% that the potential income from trading far outstrips my best real estate month.
And nowhere in your prose do you mention or acknowledge you couldn't/didn't follow your plan of incrementally increasing the number of micro contracts you would trade as your account value grew. But you were all gung ho on trading the minis. You even ended with enough based on your rules and guidelines to trade at least 1 mini. You were just a scared puppy. The same issues will appear again if there is a next time. Oh well. Well Wishes in your future endeavors. Pile up enough tomorrows, and you'll find you're left with nothing but a lot of empty yesterdays. ~ Professor Harold Hill, The Music Man
Its of course too easy to say now that you should have scaled up your contracts when your account grew, which would then have you earning enough per day to have matched your real estate income, but none of this helps now. I understand that the volatility made you scared, but since you were in and out in seconds or minutes, and still only took little bites, the volatility really didn't affect you. It was all psychology in my opinion, and if your account was closer to 100k than 10k, even slow days would have you shitting your pants because your PnL would be going up and down by hundreds in seconds rather than just dollars in seconds. But going forward, as others have said, what is left for you in real estate? Taking money out is very likely killing the only future you may have. Look, trading isn't easy, we all know that, but if we compare it to RE, it seems a heck of a lot easier. With RE, you need so many stars to line up. First the market has to be strong, which you have no control over. Then you need to find a seller to represent. Then you need to find a buyer for your seller and pray the deal goes through. You literally have to co-ordinate so many things that are all out of your control, no matter how smooth you are. With trading, we all know that we can't control what the market does, but we control everything else. You don't need to find customers, or impress people. You don't worry about deals falling through if financing doesn't pan out. With trading, you actually have way more control over the outcome than you do with real estate. Its true that the most perfect trade can turn on a dime and leave you with a loss. But with RE, the most perfect deal can fall through and you get nothing. Now you have to start all over again. But with trading, you just look for the next setup, not the next seller of a house, which seems a heck of a lot harder. In conclusion, if you stick with trading, 6 months from now RE might not matter. But if you really do kill this potential source of income, 6 months from now RE might not be any better and you will be royally screwed. You are quitting because you are scared you can't replicate your performance, not because you actually need the money. Any idiot can see that if you grew from 2k to 6k, then why not grow 20k to 60k exactly the same way and just be done with any other type of work. You are running away from trading because of fear, which is understandable, but don't make it seem like you're making a smart business choice. Given your progress, the only thing you should be thinking about is trading because it is actually your best opportunity for the future based on your past performance.
Hey sstheo, Wishing you the best going forward, however I'm also in the camp of continue trading as it's liquid income immediately without conditions. I'm certain if you take up my offer and trade along with me I can get you to increase your size.
In 2008, there was a man living up the road a piece from me who had been in an accident of his own making, and was having a really bad time. I asked him to come down and help me from time to time, no demands, and I'd pay him, not top dollar, but according to how much work he accomplished. Started out slowly, but over a few weeks, he was doing good, but most importantly, he began to get back some of his sense of self-value. He started helping another fellow, going around the county, finding old gullies, and pulling out refrigerators, etc, as the price of scrap metal started moving up. I'm in the deep south, lots of gullies full of junk around here, going back to the first Carolinian not wanting to keep his garbage at home. Anyway, he only worked for that guy a week, and came down here talking about how he was doing most of the work, and not getting even a quarter of the money. So, I sold him a used truck. I had a 71 Chevy pickup, in decent shape, that I wasn't using, and sold it to him for $200, but, told him to go on and get the tags, insurance, etc first, and pay me back once he started making money hauling scrap metal for himself. It was only a couple days before he came around with the $200, beaming, telling me that was just one day's haul! Good on him. A week or so later, he had hired his own helper, and was rolling in it. I couldn't help but wonder if his own helper said to one of his friends that he was doing most of the work and getting less than 1/4 of the money, but I refrained. Another week goes by, then another, and lo and behold, there's Leon, at my door, hat in hand, asking do I need any work done around. So, I asked about the truck. It turned out that some of the high rollers in the junk business were sitting around the barbershop talking, and one let it out that he needed a new motor, and would pay $400 for one. So, Leon, thinking fast, struck up an agreement that the guy would give him $400 for the engine, and go on and pay him scrap metal prices for the truck, another $200. So, a few minutes later, Leon had $600, and the other scrap man had a truck with an engine. I was stunned. "Why did you do that?" I asked him. His answer, "Well, I only paid $200 for the truck, and I got $600, tripled my investment in just a few minutes, seemed like a good deal." "So, Leon, how you gonna haul scrap metal?" "I wasn't thinking that far ahead" So, he was out of the scrap metal business the rest of 2008, and out of the barbershop highrolling junkmen gang, too. You need the right tools to make money, and he had gotten rid of his. Reading what you've said here about closing your account, seems like you might have sold your truck.
@tiddlywinks @RubberBand @7out @old coot You are all trying to get me back to the futures platform. Thanks for your encouragement. I love trading, and am seriously considering your words. But I have to set a few things straight: 1) Mr. Winks, I don't want to argue again about the position sizing. IF I was scared because of the volatility, then I indeed did the right thing by scaling back until I was comfortable, since 90% of trading is psychological. I am brave enough to put my real trading in front of some pretty scrutinizing folks here on ET, and I am brave enough to resume the scaling. Had I kept going, there would be absolutely no way to keep growing at 2% per day without proper scaling, so it was a problem that would have fixed itself . . . . 2) Mr. Band, (a) the purpose of growing the account slowly and the purpose of the whole journal actually was to prepare me psychologically for larger profit - and loss - days. The volatility was real and it scared me, but not into inaction, just into smaller position sizes. (b) Good summary of the challenges of real estate agency!!! I agree that trading may be the better way at this time - if I have to choose. I am consulting the oracles now... (c) I am not scared I can't replicate my performance. No way. I am not running away because of fear of trading. --- I actually DO need the money. That is why I withdrew it. I am scared of running up my credit cards at 18% interest in order to pay my bills. And cash advances are like 23% interest. 3) Mr. Out, I do recognize the speed and liquidity of the trading. With the proper sized account, I know I can make $300 to $500+ per day, and that would certainly stop the hemorrhaging. 4) Mr. Coot, Fascinating story! You were extremely kind to sell your truck to help the guy. Indeed he killed the golden goose. So sad and short sighted he was. In summary, I agree that it is sad I had to liquidate - when trading may give me MUCH more upside than real estate, especially in this market. I am contemplating your (mostly) kind words seriously about getting back in quickly. I wasn't planning on staying away forever... I realize that I can keep doing both, as I was previously, especially if I only trade the first two hours of the day. If I get more money sooner than later, how will I get it? Perhaps I need to be a bit creative. I am not scared about trading, but I must be prudent and provide for my family without risking foreclosure. I was actually close to losing my house during the recession 10 years ago because of real estate investments that went bad fast, and don't want to go through that ever again. The PTSD from that is still very much alive. What will I do? It appears I have 4 options: (1) Find $10k and start trading immediately again for the full trading day, really focusing, and forget real estate completely? (2) Focus on real estate until things stabilize again before resuming trading? (3) Forget trading completely and spend ALL my time doing real estate? (4) Find $10k, trade my best for two hours each day, and continue to do real estate the other 6 to 8 working hours of the day. Right now I am leaning toward Option 4. But I would have to find the money. I will decide soon. sstheo p.s. I just ran the numbers again. If I start with $10,000 and grow about 2% per day, I would average about $250/day and have about $5,000 profit at the end of the first month. This is great news and certainly my bills would get paid. Interestingly, with $10k, I would actually be resuming approximately where I would have been at this time if I had not stopped (assuming success), so 2% per day still gets me to $200,000 by Dec 31. But right now, that goal is obviously meaningless if I can make $5,000 per month and stay afloat.
I am back. The world is still in chaos it seems. I hope you are all surviving. Things are improving slowly in my real estate business. I decided I couldn't wait any longer to get back on the "2% per day" train and have funded my account again. I am starting with about $5,000. So this is just $100 per day for now, with only gradual natural increases - the way I think it should be. I really need to focus, so I won't be writing as much, but I will post my progress.
Done for the day. Up $117. I met my target and stopped. Isn't this mostly about discipline???? I caught the short after the open. After so many days of UP, UP, UP I knew the chances were rising for a significant move down. Of course there are no guarantees. But it worked today.