i'd would say one needs 250k min to make a go of it. Thats's 150k in your accounts and 100k to live in
You are not nuts. However if you plan on putting more than 25,000 in a trading account at the beginning you are going to lose! You are going to lose money at the beginning. This is a fact of every new business. You will get depressed, angry, etc. You will probably have a couple of small nervous breakdowns in the middle of the trading day. You will have nights were you cannot sleep because you lost more money than you could imagine. When you are in this crazy state of mind if you have 180,000 in your trading account you will lose every penny. You will probably lose even more than 180,000. It is in your best interest to find someone who will help you set up a business plan. I trade futures and have made all of the mistakes listed above. If you would like some help before your midlife awakening becomes a midlife crisis pm me.
Depends on the way you trade. More contracts equals more money. What is enough? I make very good money. It is not enough. Greed can kill you though. Be smart. Is 500K enough? Not for me. A pro does not set this kind of limit
I like your attitude! 5 mil. Sweet. One thing - no matter how much a trader earns - you never have the feeling that you've 'made it'. That is the heart of a real pro!
That's a loser's mentality. Realistic goal? Why even trade? Take the 5 mil and put it in bonds and take your 250k year and live a good life. Trading is a very powerfult business in that it is very easy to expand once you have an edge. The amount of capital you need depends a little on your situation and the strategy your trading. If you have 6 months cushion in your savings, and trade prop, 50k should be enough to get by. If you have 6 months cushion, 50k in your prop account, and 50k cushion somewhere else, even better. This is predicated upon the fact that you have some type of tradaable edge. Could be a scalping, swing trading, pairs, or something else. Consistency of earnings is more important than maximizing % returns, IMO.
I guess I disagree. You make some good points, but as with any job, you either know your shit or you don't. Either way, better do your homework and then (here comes the Grail) Do your job. Damn. We make more of this than we should. There is nothing mystical here, despite what the Gann-ites believe. There is much to learn and practice is priceless, but geeze- let's not over engineer this If you need all these nets, you are not ready - study more.
Take a look at the minimum you can make a year on one contrect of ES. One tick a day for 240 days is 3,000 dollars. This is 240 ticks which when divieds by 4 is 60 points. 60 points @ 50 dollars a point is 3,000. Two ticks a day is 6,000 dollars a year. or if you make 1 tick a day it is 6,000 dollars a year. Let say you get up to a few contracts and make a few ticks. 3, 4, 5, or 6, contracts at 1 tick a day for 240 days are, respectively: 9,000 ,12000, 15,000 and 18,000. Step it up to 2 ticks a day: 18,000, 24,000, 30,000 and 36,000 Go for 3 ticks a day: 27,000, 36,000, 45,000 and 54,000. And, now the long term average of ET @ 4 ticks a day: 36,000, 48,000, 60,000 and 72,000. I forgot to mention the capital involved. 1 contract is 2,000. 3 is 6,000; 4 is 8,000; 5 is 10,000 and 6 is 12,000. This is just typical. Nitro is a classic example in ET He says he makes 50,000 a year and recommends that any person start with a minimum of 50,000 dollars. He may be trading something like the ES. He feels that if he is really on the ball he can stretch the 50K earnings to 100K (he is then really hitting the edge well). So he has 4 times the capital needed to be on margin for 6 contracts and he is pulling down what 6 contracts make if he makes, consistently, 2 ticks a day for 240 days of the year. To make money with 6 contacts, the minimum you could make and make money every day would be 24,000 bucks. He does twice as well as the minimum using 4 times the capital required to make the minimum. We know he doesn't make money consistently (he tells us that a lot) and he doesn't make much money as yet as he is still, as he says, improving every year. What would happen if a person looked at what the market offers daily? A person would find out that the market offers quite a lot of money to the public day after day. No one automatically has a right to that money. Lets say a person comes up with a strategy to draw a line through the market at the most frequently traded value the previous day. He could do this on any chart he wanted BUT lets use a NITRO chart instead. He enters on this value and does a NITRO. That is he starts to trade with only one contract and he exits when he has made two ticks. He only enters when the price is approaching the value from one side going to the other. This is the Nitro direction determiner; he goes with the Nitro flow only. The exit is always 2 ticks past the entrance. This is aNITRO LONG TERM DAILY AVERAGE PROFIT trade. The NITRO trader must do this each time he can during the day and he goes both ways. He does it until he makes 2,000 dollars (80 trades) and then he has to trade 2 contracts until he makes another 2,000 dollars (40 trades) at which point he trades 3 contracts. He trades three contracts for 27 trades, then 4 contracts for 20 trades, then 5 contracts for 16 trades and finally 6 contracts for 13 trades. At the end of this he is a FULL NITRO and cannot do it anymore. Then he has to get an edge that is like the one NITRO spend his life so far developing and using. This is an effort that will take about 200 crossings of the most frequently occurring price that happened the day before. How many days will it take to get this job done? That is how many days will it take to duplicate NITRO's current annual performance where he uses 50,000 dollars minimum to preform in a year? If the line is crossed once a day it will take 200 days. If it is crossed twice a day then it will take 100 days If it is crossed the times a day it will take 67 days. If it is crossed 4 times it will take 50 days. If it is crossed 5 times it will take 40 days (Noah took a trip where it rained this number of days. If it is crossed 6 times, it will take 34 days. If it is crossed 7 times it will take 29 days. If it crosses 8 times it will take 25 days. If it is crossed 9 times it will take a month (23 days). For those who can see that this kind of edge is kanda simple (are there any simpler ones?), then you may want to be a little creative to use others. The one I like is this: get in the market on the right side of the market and stay on the right side by doing reversals over and over always keeping time with the market's reversals. You get an "unbelievable" amount of ticks per day per contract on a very small amount of capital being at risk, relatively speaking. And there are 20 to 40 actions per day. This is called SCT trading.
A skilled emini trader only needs $50K (that's $50,000... only four zeros) to make a comfortable living from the emini market. That allows for "safe" trading of 20-lot positions max, 10-lot positions with ease. Day-trade margin there is 100 contracts, but that's literal suicide. A skilled, veteran trader can handle one contract per $2,500 without risk of ruin. I also agree with the earlier post saying to NEVER hold all capital in a trading account. If something goes haywire, i.e. the trader has a mental meltdown (it happens) there is another cushion to work with. If I had a $5mil account, I would not be an intraday trader. Just write deep OTM credit spreads on SPX and have a nice day. Paltry % annual returns, but almost no effort involved. Intraday trading allows modest capital (inventory) to be turned over more often, therefore more efficiently. Same concept as any other business... inventory turnover is our objective. Key words in every factual statement above are <b>"skilled trader"</b>
What is your standard frequency for sweeping excess money out of your intraday account? What is the highest level of capital you use in any stream of capital that is used to trade stocks? Thnak you in advance. regards, Jack