How much buying power ?

Discussion in 'Trading' started by inomad, Aug 26, 2008.

  1. inomad

    inomad

    I understand your point that trade should be based on risk and I agree.
    Do you think you would take the same trade size if your BP would be 2x your trade?
     
    #11     Aug 26, 2008
  2. bespoke

    bespoke

    Alright, well maybe just a couple thousand things worse than lack of BP.

    But been there and done that too unforunatley :(
     
    #12     Aug 26, 2008
  3. bespoke

    bespoke

    My size is based on the question "how much do I plan to lose on this trade if I'm wrong?". If my out is 10 cents away and I'm willing to risk 300, then my position will be 3000 shares. Regardless of BP.

    But for my trading style, I probably rarely use more than 20% of my BP at any given moment throughout the day so BP is something I never really think about. I guess that's one of the benefits of trading prop.

    But I do think you'll need at least 100K to consistently make 500 a day.
     
    #13     Aug 26, 2008
  4. inomad

    inomad

    I see...
    Thank you all for the answers.
     
    #14     Aug 26, 2008
  5. 1) None of this matters unless you are net profitable for a lengthy period of time.

    Under capitalization is definitely a problem. But the main problem of most traders is that they have almost no edge.

    2) Even with $100,000, many traders will still manage to have an occasional blowout when they get greedy.

    There is a serious difference between MAKING $500 a day and AVERAGING $500 a day.

    3) More important for a particular trader - what have YOU averaged over the last 6 months on a daily basis, on your current account. Then try scaling that up to a $500 daily level.

    Trying to ask other traders is difficult, because some are scalpers, ir swing traders, or try and get the occasional home run while others try and take out small profits. A scalper can get along on a much smaller stake.

    4) Many traders tend to get conservative with larger accounts, so this must also be factored.
     
    #15     Aug 26, 2008
  6. inomad

    inomad

    Thank you TraderZone . Very good input
    I'll also try to improve my edge.
     
    #16     Aug 26, 2008
  7. i agree sometime more buying power is not good
    When i was trading i had 200K buying power.and i use to get carried away and never use a lot of buying power
    When i got it to 100K i was doing ok
    Not making $500 a day but $100 a day
     
    #17     Aug 26, 2008