I see and hear about undercapitalization in many business fields. I hear it a lot in trading offered as an excuse for failure. In my opinion, there is really no such thing. AT least thats where I wanna begin this thread. If you have a good system, and its scalable to absorb the risk you take, and you can absorb the trading related fees, then is there any such thing as the undercapitalized trader? I hear, experience personally, and read about so many different ideas of what amounts it takes to become successful. Whats the miniumum amount of capital you think it takes to trades successfully? Does anyone have personal experience starting with $5k and is now a career trader, and what of those that started with $500K, and flourish now. Id like to hear the different views.
Interesting topic. I'll open a new account for my son with $3K in it and see how it works out. I'll use the most conservative approach possible in my trading system - buy or short one contract per play. It is goal-oriented. The purpose is to make 10-15% return daily or make $300-500 daily for the first 30 days, then expand to make $500 to $800 daily when the equity grows over $10K. I'll post my entries and exits daily and see if this can be done.
A brave soul enters into the fury of the fire that burns in the depths of hell. Faretheewell. Good Trading to you...
"Scalable to absorb the risk you take" - by this I assume you mean that you scale down your size so that your losing trades are acceptable in relation to the capital you have to work with. And if you have $5k to trade with, to size down to an acceptable risk level, maybe you're making $200/ week. If you can't live on $200/week, you are undercapitalized. You'll eventually be forced out of the game because you don't have enough money to work with to make a living at it. Some guys can start with $5,000, or even zero, and make it. The problem doing it that way is that you have to 'get it' pretty fast or you'll run into the same thing. Just because they made it, doesn't mean they weren't undercapitalized. Just means they were fast learners or lucky.
Well, don't laugh. It all depends on what you're trading, your trading style and strategy, your mental toughness, and how your system works. Made 4 conservative trades Friday with the capital requirement of $2K - made $1600. http://www.elitetrader.com/vb/attachment.php?s=&postid=927845 http://www.elitetrader.com/vb/attachment.php?s=&postid=927877 Cheers! [ QUOTE]Quote from ElectricSavant: A brave soul enters into the fury of the fire that burns in the depths of hell. Faretheewell. Good Trading to you... [/QUOTE]