I've known people who "invested" on the side and turned 20k into 750k in less than a year -- these numbers are not impossible considering how insane the markets have been in the recent past. In fact, it would not surprise me to learn that the 15K went to 500K or more (esp around 2000) before ending up at 250k. That amount of capital is definitely enough to get started IMO. But I'd warn him that "trading on the side" and trading full time are completely different situations mentally; he will most likely not be as patient as he was before (when perhaps only the truly good opportunities caught his eye) now that he is trading for a living -- the pressure will be on to "make something happen", since that's his job now. If he has already achieved good, steady results in the past, I hope he realizes that going full-time shouldn't necessarily change his methods at all, many times the best action to take is none at all. A good example is going to a "direct-access" broker from something like datek or e*trade -- is that really necessary for the time frame he's trading, or will it just turn his screen into a slot machine and suck him into scalping? The only way to find out if this is the right thing to do as a career is to try. But he must realize that "going pro" doesn't mean much difference at all -- the way he "trades" now may actually be where most people who begin by scalping ticks want to eventually be. Good luck!
illiquid, I think this is an excellent point. When you trade for a living, every day is crucial and pressured if you don't make $. You feel compelled to crank out money every day even though statistically that's not possible(or highly improbably. No system or method has 100% win rate!). And statistically, it's normal and OK not to make $ every day as long as you have a positive edge over time. It's easier said than done. All of sudden he will not have a regular paycheck. And if he goes through his first drawdown will he be able to handle it? Or will he overtrade and blow up the $250K that he has worked so hard to build up? Or wil he double down to make up for losses faster? These are all real scary possibilities. People don't think the same when they know they have the safety of a job to fall back on. They act very different if their SOLE SOURCE of income comes from something as erratic and random as the market... Think about it. But in terms of capital, that should be enough with proper risk mgmt. As to someone's comment about $250K being a lot, it seems a lot but it's really not that much. Some people I know personally had over $1M in their employee stock options during the crazy bull market. Unfortunately they didn't cash out and now still working though at still a relatively high paying job. But not millionaires. Such a regret. Wasted opportunity. But to be at the same level as his old $75K job, he should consistently generate $150K to cover for expenses(computer, monitors, dsl/cable, charting ,trading software, magazines, books, data, seminars, services,etc) PLUS benefits(health insurance, medial, sick leve days, dental, vision plan,etc.) Can he generate $150K from $250K? hmm.. Can he take a DOWN YEAR?! Like most money managers, not every year is an up year.. OR down months when his account is bleeding and he's eating into his savings... Trading for a living is a hard cookie. Gotta think hard about it...
Junior member post, pretty critical of Elite Trader Members. Only 1% of us have $250K? The guy was asking for advice if you dont want to give it then keep your opinion to yourself. This site would be more productive without your catfighting. Substance above all friend worry about your own cash and not everyone else's. You should be lucky to be 1%.
Most ET traders here don't even have anywhere near $25K to daytrade more like $1000-$2000 accounts and you're asking if $250K is enough to daytrade? LOL
kavman, haha. That's why prop firms SPONSORS ET. And most ETers join prop firms for the leverage. And that's why prop traders success rates are so low. Undercapitalization is poor money management and has serious psychological side effects...
Well said. The mental adaption required is more important than capitalization! Trading full time is a whole new story. Do not underestimate the impact of working alone from home, it can be devastating if your used to getting lots of social feedback during the day. Best of luck. joe
That kind of mental approach is a sure road to self destruction . One has to be able to stand aside waiting for unfavorable conditions to change.
Speakingout: >This reply comes from my friend and not from me. I am only >typing it in for him. He has me on the phone. He has enjoyed all >the replies so far and they have been helpful and appreciated. brokerj: >this has reached the point of absurdity... Anybody got the >number for the psychic hot line? Friend stories are comical, especially this one. "my friend" does not know how to interact with an EliteTrader forum himself so he needs Speakingout and an intermediary. Now Speakingout could say "there is unanimous agreement on EliteTrader that I am the best trader here, so it is best that you deposit your $250K in my account for me to manage". What would "my friend" know? But I guess he would not be "my friend" for long.
Hi everybody I just read the additional replies to this thread since last night. After reading them I have some interesting thoughts of my own since I won't be talking with my friend until mid afternoon. What I am starting to get the feeling from the last number of replies is that although "Anthony" (my friends name by the way) has 250k it is not enough to trade with. Let me clarify: 1. He has to make up for his 75k a year salary that he is "giving up". 2. He has to get used to being able to trade full time instead of causally part time. Trading full time may make him overtrade and not lay back for choice opportunities because of the built in paycheck mentality. 3. 250k is not that much because people on ET 'know" many friends and family members who have made much much more money in the hey day of the bull market and have kept it all through the bear market. So his 250k is nothing substantial comparatively. 4. 250k is enough to start with but it can be lost if he is not careful and trades recklessly. Even though he earned his capital through trading in the first place. Although not full time, being the distinction. 5. Somebody posted that having 250K puts my friend in the top 1% of capital among active traders and that because of this he should not ask for advice. Then someone said 250k is a very small amount compared to what most have. I mean really folks it both statements can't be true that I know to be fact. So what is it? Is all of ET trading with more than 250k and as such 250k is just another casual amount to start with comparatively to most traders? These are the thing that are perplexing me. All these 5 points gel into one thought which basically boils down to this. If 250K is marginally enough (as some have written) for someone to make it full time that has been trading for 8 years on the side. Furthermore, if this person with 250k will have to make 150k as another poster said in order to equal their 75k salary they are giving up. Then the thought on my mind is that are we saying that most traders here on ET are capitalized well above 250K and are making well above 150k per year gross in order that they meet or are currently beating the requirements and advice that they have set forth to my friend Anthony? Or is one particular ET poster correct about the statement , "1% of people trading have capital over 250K." If so does this inevitably mean that those giving the advice here to Anthony are factually not holding themselves to the same standards being giving to him in this thread pertaining to current account equity to trade with and the minimum gross amount per year (lets take the average being giving as advice in this thread and call it an even 100K gross per year) that they are actually making while trading full time?
Speakingout: >Hi everybody I just read the additional replies to this thread >since last night. After reading them I have some interesting >thoughts of my own since I won't be talking with my friend until >mid afternoon. >What I am starting to get the feeling from the last number of >replies is that although "Anthony" (my friends name by the >way) has 250k it is not enough to trade with. It is interesting that the name of Danny's "invisible friend" is named "Tony", who tells him things in The Shining.