PS, On Friday I paid $1.25 for IBM 195 calls that expire this coming Friday. My GTC limit order is to sell them at $2.50. It's probably going to go 100%, either for me or against me...doubt I will get anything back if the limit order doesn't hit.
Your original point about short term trading stated "the shorter the trade the more meaningless the % return". This is clearly an incorrect assumption because day traders make their sometimes spectacular returns by trading very short term and doing this many times. Given the astronomical return the OP is aiming for, one would gather he will be trading very short term as soon as the PDT rule is no longer an obstacle. In short term trading it is not customary to annualise individual trades because one is left with the question of what the multiplier should be, ie how many trades per annum when there is no consistent number of trades per day. For really short term trading, individual trades get rated by absolute % return, and performance is gauged by annualising the daily/weekly/monthly/quarterly return on capital. Referring to annualised returns for individual trades in the context of short term trading is simply confusing. In the case of longer term trades, one can standardise and compare by annualising, eg 2 trades each yielding an absolute profit of 10% but over different periods like 20 days and 30 days can be accurately compared by annualising the returns. Doubtless this is what you have in mind when you use annualised returns, but what you believe to be true about longer term trading is in fact quite irrelevant to very short term trading.
OP, I would think you need a minimum of 5 years and 10k hours of experience to become the jack of your trade, whatever that may be. There's no free pass. If you had a years living expenses covered to take care of your child ect. and had a nut laying around or different source of adequate income I'd say go for it. You need to get a reliable source of income to feed your family. Trading with a 700 dollar account hoping to pay bills isn't reliable. For the sake of your child. Save the 700 to feed the kid. Get a job, learn to trade in your freetime, it will take years to learn. Where there is a will there is a way but nothing worthwhile comes free.
As the OP has not been heard from since his 3rd post, I fear he has already lost interest in us. If so that is a shame, as I would like just one of these "From Peanuts to a Palace" threads to follow through with a serious attempt. Not a successful attempt, but a serious nose to the grindstone effort. Of course, given the small size of the account, if he has been opening and closing positions intraday, he may already be under a 90 day lock out.
Quote from justrading: <<< Your original point about short term trading stated "the shorter the trade the more meaningless the % return". This is clearly an incorrect assumption because day traders make their sometimes spectacular returns by trading very short term and doing this many times. >>> Their "spectacular" % returns are based in theory. Not reality. That being.... not at the end of the year. They may have some years with very good % returns. But spectacular.....??? Just because someone does the occasional or even somewhat frequent day trade, with spectacular results, does not neccessarily make their end of the year results "spectacular". The "end of year" is everyones standard benchmark of measurement. Not daily or weekly. <<< Given the astronomical return the OP is aiming for, one would gather he will be trading very short term as soon as the PDT rule is no longer an obstacle. >>> I suspect he ment to say $1,000 and not $100,000. But if he did mean to say $100,000... that is a perfect example of how meaningless those very S-T % returns are. Someone makes $30 on a trade and thinks he will end the year with a 10,000% return at year end. LOL! Very S-T trades should be evaluated based on "dollars earned or lost". Not %. <<< In short term trading it is not customary to annualise individual trades because one is left with the question of what the multiplier should be, ie how many trades per annum when there is no consistent number of trades per day. For really short term trading, individual trades get rated by absolute % return, and performance is gauged by annualising the daily/weekly/monthly/quarterly return on capital. Referring to annualised returns for individual trades in the context of short term trading is simply confusing. >>> You are actually making the point I was stating. That it is meaningless to annualize very S-T trades..... that being a few days or less. That those trades should be evaluated based on dollars earned or loss. Not %. However, one can do a quarterly measurement of "dollars earned", to get an idea of how the "theoretical" year end annualized % return might look, if similar type trades continue for the remainder of the year. <<< ....but what you believe to be true about longer term trading is in fact quite irrelevant to very short term trading. >>> It's just the opposite. What you believe about S-T % trading is irrelevant to long term (year end annualized trading). And it is that annual trading which is the standard benchmark. Or to put it another way,... when you go to the store to buy something. They expect to be paid in dollars. Not % return. If you made $30 on a S-T trade, nobody cares if it calculates out to 300%. The guy expects to be paid in cash. One last question.... Suppose instead of earning 300% on a S-T trade, you LOST 300%. Do you care, or is that 300% loss actually a meaningless measurement? Bottom line.... I suggest adding up your S-T dollars quarterly and then annualizing it, just to get an idea of how your year end % return may look. Chances are, all those meaningless 50% - 500% S-T gains and losses, will calculate out to less than 30% at year end.
you are young and dumb i get it but you will lose that $700 very fast. i am kind of depressed reading this even because if you only have $700 spend it on your kid before someone takes it away from you.
Well said...it takes alot of concentrated effort and study to get good at this or anything for that matter. Respect the craft and pay your dues!
For shits and giggles someone else should open a $700 account and we should turn this into a competition. As soon as I find a new daycare for my 2 year old I'll do it. Where can you trade a $700 account? Are you using Oanda or some shady ass thing like that? If I could turn $700 into 5K by the end of the year I would shit myself and then go piss it all any on scratch off lottery tickets. With $700 it might take 2 weeks just to find a R:R trade that would get you started. Like the other guys said the 1st 3 or 4 trades are super important and you'll need to be crazy patient. Go Ravens!!
I'd be game. I have 2K in one of IB subaccounts that is doing nothing but keeping the account open with margin status. Of course, this may mean I am overcapitalized. If I did something like this, I'd not want to be limited to options only. I'd want to be able to trade anything that moved, so long as I had sufficient margin to open and maintain the position. That would limit a small account to stocks, options, and presumably forex. I have no idea what futures, if any, I could trade with 2K at IB. I remeber trading silver back in the day, and if memory serves, I think it was $1400 initial and $900 maintenance. A quick check for this post shows it is currently $16940 initial and $11000 maintenance. "Unprecedented volatility" indeed! As it is, I'd be willing to see how far I could run a small account before I go bust.
If you think about it, this guy is trying to make a mockery out of this business. No respect for the business or the people involved. I hope he does end up trying and gets crushed.