$250K is a very decent size account for trading. I don't know if Futures traders really measure their success based on percentage return on account size though. I mean, a guy with $250K could be trading 10-lots on ES and make the same amount of cash as the guy with a $25K account. -Fast
All depends on the context doesnt it? My opinion is, in general, 1 million for a retail guy. But what im saying is this. If you got a prop guy with a 50K account, and tons of leverage, and he makes 50K a year, a 100% return, I think we would agree, its not that big of a deal. If he makes 100% return on a million dollar account, that is far more impressive. 100% on 10 million...wow. Even if he is not a prop guy, and strictly retail, a scalper wouldnt know what to do with a larger account. 250K would be plenty, and would be a LARGE account. A swing trader may think 250K is too small of an account. A position trader might consider it TINY. This guy has been averaging 42% return (according to another poster). So 42% of 250K is 105K a year. He is currently making 75K a year. But now will have new expenses, such as insurance, etc... Not to mention the additional pressure. Even if he continues at a rate of 42% a year, he is BARELY moving ahead in terms of total wealth. I would adivse that he waits a little longer so he has more padding and can actually SAVE money with this winnings instead of merely paying the bills. peace axeman
Hi all let me throw my hat into the ring for a spin. Yes 250k is a very large account size for trading purposes. In fact its huge when and if your only going to trade futures we all know that because of the leverage your getting in the first place. Its huge for daytrading because your can get 1 million intraday buying power. Its also huge for swing trading cause you can have 2-1 overnight and carry alot of swing trades with 500k overnight bp. Now I say this with the experience that my account size is now at 500K+. I simply do no use all the capital. Let me repeat that. I DO NOT USE ALL THE CAPITAL. Sorry about the caps but it was for necessary for effect. Listen I swingtrade for the most part. I will hold stocks for a month at a time. Example I will hold 2000 AMAT, 1500 SMH, 1000 IBM, 4000 QQQ, ALL LONG THEN maybe also be short 1000 ryl 500 hov 1000 S. Put all that together and it still does not = 1 million in overnight buying power. Not to mention how much money I get released in daytrading buying power to jerk around with intraday when stocks like JNPR, CIEN , RIMM etc are making good trending moves during the day. I also have futures that I trade but they dont tie up anything in terms of capital. In fact if I decided to not hold the QQQ at all and just hold NQ I would be smarter, but I am old school and just sometimes feel better in QQQ, dont laugh it just is. Bottom line a bunch of positions held such as those above, for a month and cherry picked using techniques that I have blah blah would usually gross me a good 20-30k per month without all the hassel of staring at the monitor like a maniac. (Which I do anyway lol). So in a nut shell 250k is a huge account for a retail trader. Thats my opinion and furthermore, just for reference I dont think many retail traders can come close to even saying they have 100k in their accounts.
Axeman what you said above has validity, however its still very perplexing to me at the same time. You saying that based on his return of 42% avg. per year he might earn 105K trading full time with more focus. However the drawback is that he wont be increasing his total wealth after taxes and bills. Ok correct me if I am wrong. Axeman dont you, I and the rest of the planet have expenses and taxes to pay as well? Are you saying that a guy with 250k is not able to have a decent shot at starting full time trading after doing it for 8 years already. Do you increase your total wealth after taxes and bills? If so by how much? Is that acceptable for you? If not how come you dont have a full time job then? If you have lower bills then this guy Anthony does that mean you dont plan on getting married in the future and having kids one day yourself. Will that mean at that time you will give up trading because you wont be able to build up your total wealth. Should we tell people who are working for "the man" for a living that they should quit if they are only living paycheck to paycheck because its not acceptable! They should be paid more to build up their total wealth. This guy Anthony may be miserable doing what he is doing doesnt his job happiness (full time trading) mean anything? Does it mean something for you? Listen sorry about the tough attitude here but what your saying about wealth creation has merit but how do you it apply it to yourself is the question?
Interesting Harry.... But this truly begs the question..... many of the stocks you listed do NOT have any kind of liquidity problems associated with the sizes you are using. So WHY are you leaving so much money on the table? Unless you have 50% drawdowns and need THAT much reserve capital so you dont blow out, it seems you are making a huge error. Can you explain further? peace axeman
I already posted the question concerning HATING his job. If he HATES his job, then I say bail, and go for it. But if you really want to stack the deck in your favor, and maximize the odds of being successful at trading and not having to go back to that miserable job, then he would be better off waiting a little longer for the reasons I already explained. Lets look at it another way. If I was a struggling trader, who was "just breaking even" every year with my profits, and *KNEW* I could do better if I simply had more capital, because obviously I already have an edge, WHAT WOULD I DO??? Answer: Get a part time JOB. Give my capital the boost it needs to allow me to SURPASS my bills and move ahead every year instead of just standing still. Then I would quit, and get back to trading fulltime. Im totally for following your dreams....you just need to make sure you doing it smartly and get your ducks in a row. Thats all im saying. peace axeman
Very good question Axeman I wall answer that its as best I can. The reason is most definitely of a personal nature. Surprise surprise trading always is. I do not have super large drawdowns. Wtih an account of 500k I will not let the account drawdown worse than 10% thats 50k in absolute amounts. In order to achieve that I have probably come to an adaptation of sorts where by I do not use my total pool of buying power in order to achieve these constrained drawdowns. I will go further to say that 10% may not be a large drawdown in terms of percentages but in absolute amounts its a brand new Jaguar S type fully loaded. I would say that I am at a crossroads with my capital that I truly was immersed in much more just over a year ago. I am and have been actually utilizing more of my capital lately then just over a year ago believe it or not and still I have not gotten mentally to the point of using my full buying power for most of the trading day,week,month, or year. I do realize the lower returns that will result against a higher capital base because of this mental block that once again I am currently working out of. So with that noted I do plan to step it up but I also practice the adage that cash is king and I do like to have money on the side for when the markets allow for choice opportunities that occur one day of each month. Even mutual funds with major diversification do not fully invest all their fund and may carry up to 5-10% of assets in cash or cash equivalents at any given time. I agree I am probably acting more conservative then that but at the same time I am not as diversified as a mutual fund so my returns are more direct and forceful month to month. I hope that answers your questions please feel free to reply back if what I said didn't answer your question.
I agree with this statement 100%. Nothing wrong with using the firms leverage and continuing to swing trade his previous account.
Cause anyone who has made 250K from 15k in 8 years would not be stupid enough to have a friend post for them on ET asking for advice. I'm sorry, this "friend" thing is just too funny. Not only that, you claim he reads the responses and still has you answer? What a joke.