How much should I be earning

Discussion in 'Professional Trading' started by washington, Jul 20, 2002.

  1. Kymar


    Agree completely with the first part, but the "rule of thumb" strikes me as way too generalized. As ever, and in line with a point I made a few pages ago, it's impossible to give very specific answers without knowing a lot more about the particular methods being employed. We have a tendency in these parts to talk about "trading" as though we all are more or less doing the same thing, but that's only partly true. For all you know, you may be in the position of a classical violinist trying to give helpful hints to a heavy metal drummer, at a meeting of the kazoo club.
    #31     Jul 21, 2002
  2. T/A_Bo


    This question is not really answerable based on that info because it gets into personal stats like what is avg drawdown, avg win/loss streak duration, etc.... As good baseline, I’d suggest risking no more then 3% of you cash account value on any given daytrade.

    Personally I take 1%, and no more then 2%, as this keeps my drawdowns under the 10% level, which I find most comfortable for me. Mini accounts can be a bit strange, as many keep just enough to cover margins and drawdowns, but are willing to add funds of needed. I’d suggest you define what your risk capital backing your trading is, then base your position size off that level. If you have a $50,000 account, then 1-5 contracts with 2-3 pt stops means you are exposing yourself to a maximum of $750 on any given trade. This keeps you under the 2% “ceiling” and would be a level I would consider “safe”. With 1-2% risk you can hit a really nasty losing period and not materially damage your ability to trade. Staying alive is your #1 job as a trader :D

    Good Luck and Good Trading!

    -Bo Yoder
    #32     Jul 21, 2002
  3. PubliasEnigma

    PubliasEnigma Guest

    I LOVE it! :p

    I could not agree more with you Kymar (and this is NO way aimed at your posts Bo), for some reason most on these boards seem to think there is 'One Absolute Unviersal Way' and sadly they also assume it is their way...

    PEACE and good trading Kymar,
    #33     Jul 21, 2002

  4. We have smiliar time frames. I also trade the ES and usually

    am out in 15 minutes or so. I trade 100 tick bars and usually
    risk about 6 to 7 ticks at most.

    3 handles might be a little to wide. I say this because you
    need to try and average around a 3-1 profit/loss ratio and
    that means if you're risking 3 points you'll need to make 9
    for a good trade.

    As opposed to 6 ticks (1.5 handles) I need to make 4.5 points.

    Obviously, it's going to be easier to make 4.5 points in 15 minutes than 9 points.

    Of course, I probably get stopped out more frequently than
    you do. Still, I think 3 handles is a little too much for a scalp.
    #34     Jul 21, 2002
  5. T/A_Bo


    It is :) But it helps to give a basic idea of what is reasonable, and can cut through some of the fantasy. No matter what your style as a trader, your income and percent return is always a function of the level of risk you take. I get folks in my room all the time who think they can make 100k a year while taking no more then $200-300 of risk. I've never yet seen anybody get to that level without taking a lot more risk per trade.

    #35     Jul 21, 2002
  6. rs7


    I don't know how many times this has been expressed and in how many ways.
    It is my belief that any trader that can just manage to stay even, let alone be profitable after only a few months is showing great promise. Washington, you are obviously doing things right, staying disciplined, timing your trades well, etc. If I were able to give one single piece of advice, it would be to NOT raise any $ goals at this time. The experience of thousands has shown that if you start out well, as you obviously have, you will most likely run into some bumps in the road. Until you have gone through difficult times, either due to the market, or self inflicted, you should not step up your trading (size, risk, aggressiveness overall).

    I hope for your sake that the rough times are short and inexpensive. But they are inevitable. Trading can be a great career. Do not try and extrapolate future possible performance from a few months experience. Give yourself time to get comfortable enough to not say things like "I am too much of an amateur to post because I really connot add to the body of knowledge". When you feel differently, you will know you are ready to set your own goals.

    Best of Luck!!
    #36     Jul 21, 2002
  7. Kymar


    But what are they trading - or trying to trade? What set-ups, time frames, tradables?

    Nothing could be more clear to me than that "income and percent return" is never only a "function of the level of risk you take." I'm sure that on further reflection you'll agree with me: A below average trader will never have much income to worry about, and increased risk will in that case only guarantee a 100% return to the regular workforce (or worse!)... You have to assume a fairly high level of competence just to get long-term, consistent profitability of any type, but, even then, reward:risk and other relevant parameters can vary widely from one approach to another, in my opinion.
    #37     Jul 21, 2002
  8. Kymar


    Strange, isn't it? And despite all the evidence to the contrary... constantly thrown in their faces, as soon as any subject of common concern comes up...

    Seems that this "how much should I make?" question comes up regularly, too, stimulates approximately the same discussion, with those who've already participated a few rounds receding somewhat further into the background. Last time, as I recall, RS7 did most of the heavy-lifting, and he and I both tried to make somewhat similar points. He wanted people to be realistic. I wanted people, including him, to be more precise. Some of us just have a tribune complex or something - determined to help people out, maybe wanting support and attention, maybe just trying to be ok guys, mabye both, I dunno...

    What I really don't get, though, is the people who seem to get exercised about some small issue, or get stuck on some narrow point of view, start throwing around crude insults if challenged, and never seem to progress... Some of them claim to be profitable traders. If that's true, that they're really profitable AND really so dense, then there's really no justice in this game. Or maybe they've just been lucky enough to get attached to some decent system at an early enough point so that their density and stubbornness work in their favor, preventing them from getting distracted...

    Maybe they'll hit a bump they can't just barge through when and if conditions change again...
    #38     Jul 21, 2002
  9. You should be happy to be net positive in this environment. Anything on top of that is gravy.
    #39     Jul 21, 2002
  10. Rigel


    It depends on how good your trading is.
    #40     Jul 21, 2002