How do you go about raising capital?

NeoRio1 · Apr 8, 2009

Quote from travis:

Try and do riskier things while you have the security of holding a job.

Even reinvest your whole capital at all times and ignore money management. But before doing so, repay immediately your debt. Only depend on your own money.

That's what I did. I reinvested everything for the past year. Ultimately it didn't go well, but I still had my job. If you gotta try crazy things, all sorts of tests, you have to do it while you have your job.

At the start it went well. I turned 4500 into 23500, but then lost it all. Then tried it again, and turned 8000 into 26000, but then lost it all again.

But it was no problem because I didn't have any debts and all the money I lost could be lost. In retrospect it was the best thing to do. I am free to do whatever I want, because I have my job. If I strike it exceedingly rich very quickly then I'll quit my job, otherwise I'll stay.

If I play it safe, instead, I'll never be able to quit my job anyway, because my initial capital is always going to be 4000 dollars. Indeed I am not accepting any offers of money from relatives and friends, and I am glad I never did, because by now I would have lost hundreds of thousands of dollars.

Except ten years ago, when I accepted a few thousand dollars from people at work (my boss and the computer guy). I had started trading options two months earlier and I was getting lucky. Two weeks after I accepted and invested their money (and mine), I lost everything.

I would rather have just 4000 dollars, all mine, feel very light and carefree, and be able to reinvest it all in the riskiest ways, than be burdened by borrowed money that I cannot freely invest whichever way I want. I'd feel paralyzed with money from others. I wouldn't be able to think freely. Imagine playing the risk strategy game: would you play better if you knew it's just a game or if you thought your life depended on it?

If you hold your job, and see trading as a game, and do whatever you want with maybe just 20 thousand dollars, everything will be better. If you instead depend on money from others, you'll have a lot of stress on yourself. How do you face a big drawdown when the largest part of your capital is not even yours? Think instead of a drawdown when you would be ok with losing everything? I went from 23500 to zero, all money made from the markets, and didn't even shed a tear. To trade properly you should be ok with losing your whole capital. Only trade the amount of capital you're willing to lose. That is what I am doing. (And I've been losing money for the past ten years, so feel free to ignore my advice).
More...

The less exciting stories a trader has about his own trading the more successful the trader.

Ten years and you are still reckless.

Something tells me your joy of gambling far out reaches your hopes for long term success.

travis · Apr 8, 2009

Maybe you are right. Time will tell. These are the facts. No point in lying about the facts. Lost money for the past 10 years. Not in the last year though, ever since I started using systems. (made lots and lost it, twice).

Derrick1983 · May 5, 2009

Have seen a number of topics relating to the same as follows:

http://www.elitetrader.com/vb/showthread.php?s=&postid=2017464&highlight=Pooling#post2017464
http://www.elitetrader.com/vb/showthread.php?s=&postid=1951492&highlight=Pooling#post1951492

JaiSreeram · May 6, 2009

Derrick1983, you gave very good links regarding the capital topic. They were very interesting, here is one more:

http://www.elitetrader.com/vb/showthread.php?s=&postid=1953629&highlight=Pooling#post1953629

JaiSreeram · May 6, 2009

Derrick1983, you gave very good links regarding the capital topic. They were very interesting, here is one more:

http://www.elitetrader.com/vb/showthread.php?s=&postid=1953629&highlight=Pooling#post1953629

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How do you go about raising capital?

NeoRio1

travis

Derrick1983

JaiSreeram

JaiSreeram