Your thread is a pleasant read. I wish it were possible that anyone ending high school would have taken a course in how the financial side of life works. Then, while the person is in college he could take a few basic courses in the practical matters of building wealth and gaining the knowledge about living an enhanced life style. Most education focuses on learning to do a job instead. As the thread continued and you participated you did make the decision to trade full time and to do it from your residence. In the months ahead take the time to work out a rough life plan and back it up with a specific business plan for trading. The plan will require two parts in the sense that you will be obliged to trade in two separate markets (equities and commodities). Most business plans follow a conventional outline of about 12 parts and there are some good ways to go about that. As you can see no one posting to you has a plan nor do they refer to it. You will find that based upon your existing experience that you can crunch the numbers using your present money velocity in each market sector as the base line. Run the numbers for the first three years on a monthly basis and then go to a quarterly basis for the last two years of a five year plan. After that take the trouble to run yearly columns until you get to the end. By noting the conventions for how present values are determined, etc, you can fold in all the life's milestones and how you will handle that stuff. For example, plan on cars every three years and finance them your self and pay your self the normal cost of use of the capital. you will see that you make about 600K over the years (25K car todays price) and that you can do this with a lot of other things too. You already know by your trading that you are a millionaire. There are several transitions in trading as you grow more successful. Knowing this, it is your main task to compress the time required to traverse each level of performance. Add these stages to your business plan to see the impact of the progress that you will make. You can scope and bound each of the performance levels by making another plan. This is your plan for acquisition of knowledge, skills and experience. Your example of starting with blue chips, etc is a way of looking at how to broaden you scope and bounds. It is a case of dealing with the assortment of risks markets offer and, as well, how you go about acquiring skills. You can make a simple two column list. On the left list the skill, or knowledge set and on the right list the drills you will use as the experience acquisition component. This will take about 20 pages of typed copy to get the list fleshed out. For example, I meet with some older folks (older than you is what I mean). They are trading stocks and doing drills as they trade. They have worked three months on their basic set of drills and have a web site where they go to get drill sheets and reference material for refining their experiences. In January, they have done two cycles of review of their efforts. There is a spectrum of achievement in trading ranging from 80% return on capital down to the 10 or 20% range as a Year to Date (YTD) progress measurement. They are targeting about 400% a year for 2006. So with a business plan and an "experience" plan, built over the next few months, you can find out several things. You also can see from this post that the advice being given you may be qualified by the givers accomplishments. Obviously it is not necessary to pay tuition as a beginning trader. But it is necessary to only trade in the regions where you know what you are doing. You have the money making down already and now you are systemmatically going about ramping up. Your business plan, when it appears, will tell you that you already have enough starting capital simply because it is not a consideration. You have what you have. The rate of capital expansion does not change if you have a job or do not have a job. (Do not put a job in your business plan for making money trading). Strategically there is no real decision of this or that. The only decision is when to start removing capital from your trading accounts. The business plan tells you that and nothing else determines that. In the group above there are only a few full time traders. the group is split for these traders. Some are young and trading full time and others are retired or homemakers. The best homemaker is running at 75% YTD and finds that trading does not interfer with her homemaking. On campus, you may be able to find some people to help you out with your busines planning. Getting the list of tasks that need drills will be more of an individual pursuit. Finding the cogent drills is probably going to hang you up a little bit. When you find them, I am confident that you will do them. If you can't find something, make it up. Repeating drills is how knowledge and skills come into being. You are doing drills to create and accelerate theacquisition of experience. 4 out of 5 people will not find my post to be rational and fewer still will take the time to assess whether they have done the work above to be allowing themselves to pursue trading to make money. De facto, such people are disadvantaged and do not make money as a rule nor do they remain as traders very long.
To me, most education focuses on learning useless or "ivory tower" stuff. Every person is different. But we are focused to learn many useless things (whihc don't suit us) in school. We are learning compulsory subjects whihc are not compulsory. But educators seem to forget to teach some compulosry subjects which are useful to most, not to say, all poeple. Money/Finance Management is one of them. This is partly due to my success and potentials of being a trader. I tihnk this career is excellent if I manage to do it well - quick money, freedom, free allocatio of work and leisure, and so on. So are you a full-time trader too? Any good and bad things happened in a life as a full-time trader? Now I would like to trade in futures (and also options). The reasons are the "leverage effect". To me, "leverage effect" gives me efficiency in using my capital. It doesn't necessarily make me exposed to more risks. That's my thoughts. I was very successful at the first few times of my trade. I also gained a big porfit on one day (I got nearly 200 ticks!). Unfortunately, I tended to lose more than gain afterwards. Much porfits were giving back as tuition fees. Finally I decided to stop trading anyway until I figured out on why I lose relaitvely more than win (in terms of money got/lost), and find a better solution to imporve my risk/reward ratio & winning percentage. I'm not sure if I'm right, but is it true futures/options are much better than stocks (when you know how to trade well in futues/options markets!)? What do you think?
"I'm not sure if I'm right, but is it true futures/options are much better than stocks (when you know how to trade well in futues/options markets!)?" Again.... you are asking us, when there is no right answer. I say that everyone that trades Forex is a nutcase.... but if those nutcases make money, then that is the right market for them. If you like Futures, why keep asking about them. TRADE THEM, if you are going to make money, do it, if you are going to blow out, do it. JUST DO IT. Money Management and emotional control is key in trading.
The reason I ask this is I wish to hear what others say about it. I may only see part of the picture. Listening to others' advice is a way to see the rest of the picture. But it doesn't mean if someone says "stock is better, or vice versa", and I will take the advice strictly. The main point is to hear your advice/opinion, not something like "it depends", "just do it". It doesn't go anywhere. Hope that clarify what I'm really asking. So as far as you go, what do you think, stock or futures or else?
Tried stocks, forex and futures. I like futures the best. But I love to always be in on the action and like the way the YM moves and have been studying the price movements. Plus it is the first market where I feel I'm on level footing. Not being screwed over by the brokers, or by rules like 25k rule or anything of the sort.... plus none of the idiotic tax rules and stuff.
By noting the conventions for how present values are determined, etc, you can fold in all the life's milestones and how you will handle that stuff. English is my second language but basically became my primary (read hundreds and hundreds of not so easy books). Can anybody ,please, translate the above statement, the meaning? (taken from previous Grob109's post)
PV or present value of future needs. Estimate your needs through life and say someone were to end up with 500k as the amount they need, you do not need 500k today to have it in the future. So what can you realistically make on a consistent basis in the market 30%/yr, 100%/yr whatever you can do. Let's use the lower value of 30%/yr as an example. FV= 500,000 Time= 5yrs I/Y = 30 % PV = $134,664.53 So from the above you can see that if you need 500k in five years and can consistently make 30% returns per year, today you would only need $134,665 to reach your goal at end of year 5. HTH Regards EX
================ RE;'values & handle that stuff Cesko; English is my first language, and actually I dont understand exactly 100% of everything I have ever written in the past 10 years, nor do I understand 100% of that. Dont really understand 100% of electric power; but use it also. Focus on parts you do understand ; like ''do drills''. Still like to paper trade, even when in a swing/position trade. ======================================== And while like to trade stock index futures occasionaly; thats actually a completely different business than stocks, futures trends are more sloppy,choppy. 2 back up systems did fail once, that may or may not mean it could happen again; actually it was a fine stock trade; with futures it could have been more painful. Some plan on holding thru pain, prefer plan on not doing it that way.