To get over the PDT rule, he's gonna need 25k regardless. 5k is fine otherwise and if your not trying to trade stocks like Goldman Sachs. - Nathan
it all depends on whether you want to do f/t or not. and depends on how much disposable income you have. if i were you i wouldn't give up that day job yet and maybe do some trading on the side ...first.
It's called a prop firm! You can put up $5,000 and trade. You only need $25,000+ if you're trading a retail account.
I dont know if this helps, but some monte carlo simulation might assist. You can use monte carlo techniques to model average drawdowns and such for your style of trading. Start with an amount of $$$ that will let you weather the worst dry periods for your style of trading. Good luck, -T
DaveWeis' first post did not mention anything about a prop, so from that information I am just assuming that he is trading retail.
Cashmoney, yes the plan would be to trade retail..I am not at 25k yet, but I'm pretty close..Close enough to say that if I am not abit over 25 by graduation day I will start hunting for a real job. Anyway, I was just curious about who had done it, survived it, and how much money it took them to stay afloat that first year..I was just hoping to average it out. Thanks for all the input guys!
Dave. I have a goal of 48% a year in Retail Spot Forex. If I had 100k of my own money (not borrowed) that means 48k a year. So I would need 200k to allow me to withdraw a paycheck monthly and allow me to continue to grow my paycheck year after year to keep up with rising expenses. The rule is, draw out half of your profits monthly and let the other half ride. This would be what is needed. You can see it is individualized and I hope this helps. Remember, this is just one traders point of view and I tried to be constructive and actually answer your post. I have not gone through your situation when I was in my 20's, but I have given what I think to be accurate. Michael B.
Dave, You think 48k a year might be incorrect. You are a young man and I can tell you that it does not go far. Do not forget health insurance and if you are a homeowner, you need to put aside 1-2% (value of your home) a month in a maintenance money market account for repairs and major expenses. This account also should have 6 months of additional liquid funds (based on your budget which should be 48k a year) in it to survive with in the event of an "unforseen event". Also, you need to eat well (not restaurants) and go to the gym. Find a non-chain mom and pop gym where you do not have to sign a contract. Actually at your age do not enter into any long term contracts other than marriage. Marriage will be a contract for life and will guarantee higher expenses, where other long term contracts may entice you with teaser rates.. I am assuming you are not married. Girlfriends would be an additional expense not calculated. And at your age I highly recommend that you find your wife. Hint: meet her parents and you will find out about how she will be. When you find her all that you must do is to "Love your wife". Live within your means...always Michael B.
A few more things. When building your credit do not have more than two credit cards and pay the bills in full at the end of each month. Rely on your money market account for emergencies and do not let the CC companies raise your limit too high. Buy your cars used preferably from the owner...DO NOT BUY THEM NEW. Since your cooking at home, get a Costco membership or a Sams club membership. By the way...You do not need a cellphone and you can use a calling card for long distance. Watch your banking and the fee's too. Washington Mutual has free checks and no fees on their checking accounts with free outgoing wires..(incoming cost 7 bucks). Net Bank and Bank of the Internet have great online interest earning accounts. Michael B.
Kid, You got the rest of your life ahead of you. Listen to this old man. I think your getting the idea how to think. If you trade at Interactive Brokers I think they have free ACH transfers for your monthly paychecks. Otherwise the 7 bucks incoming fee at WAMU may suffice assuming your wire size makes it cost effective. At your age you do not need comfort and convienence. Calculate everything and respect money. Now I do not mean that you do not deserve comfort and convienence, I mean that you can calculate the value of your time and you can consider doing many things yourself. Remember you NEED half of what you have... Michael B.