I just withdraw money when I need it, and when my wife is nagging for a transfer. Typically about 4-5 times a year.
people that do not pay themselves out of profits generated and instead compound earnings are exposing themselves to potential draw downs that will for sure outweigh any previous profits. I am not saying that one should not add to the trading capital, it has to be done sensibly, like in a regular business. If I start a business by investing say $400000 I need to see consistent profits before I consider any further expanding that would require further investments. People that do not pay themselves are naive as in the real world majority would lose it all by compounding all profits. On the other hand if there are no profits to withdraw, one should think of doing something else. When I was a restaurateur I was generating 180%-200% gross annual return on investment, the way I see it - i can afford to do less than that now for obvious reasons. But I would say that if I can not achieve at least 80% annual return on my trading capital I would consider doing something else.
i use my futures account for income. (even though I have another fulltime job) each week, I extract profits on friday via ACH my futures account is never allowed to get over 15k... i like to keep it between 5k and 10k, which is more than enough to trade 1-3 cars of YM this way, if I ever "blow out" my account, it doesn't suck because I have shuttled out profits constantly, and the sum value in my futures account is but a %age of that, the profits already shuttled out. the profits go into very conservative type investments. i have shares in BA, MO, PG, some Gold, some bonds, some money market, etc. *if* i ever blow it out, i will refund it with 3k and limit myself to 1 car trades for 3 months as a form of discipline
I'm similar to whitster... every 2 weeks, I sweep profits from my daytrade account(s) and the account(s) are maintained between 6k and 7.5k Additionally, I have multiple accounts, some more active than others, and geared to different trade styles. For instance I won't hold overnite in a daytrade account, but in a swing account it's fine. Moreover, when profits are sweeped from specialty accounts, usually quarterly, it is distributed as bonus. Osorico [futures trader]
Osorico, I like this approach. Let me ask you -- when you say, "specialty account", what do you mean? Just another trading style or a new cool strategy style that you're trying out? That way if you make money with it it's kinda like a bonus?
So I guess I have a slight issue with the idea of sweeping profits out on a regular basis, provided that you have not built your account up to a certain, "comfort" level. That comfort level is relative. But doesn't it make sense to compound the heck out of it? I mean, if you have a plan, and you have an edge, and it's profitable, it only makes sense that you compound it up to a point where you have some very nice income. Let's say you invest $10,000 to start. Wouldn't you rather wait until you have 200-300K before you start nibbling away at it? Any thoughts on that theory?