It's never good to speculation with more than 10% of your net wealth as scared money seldom grows to be big money. The losers will tell you to focus on how much you can improbably make...as they trade on hope. Winners...with a realistic understanding of the probabilites they face will tell you how much you probably can expect to lose.
Not trying to be disrespectful, but what you see as reality...I see as negativity. I am sure all these "statistics" are right, but there is NO need to continue to regurgitate them over and over. First hand, seems to be more of a 60/40 success to failure ratio. Just think it depends on how and where you start out. Someone earlier in this thread wrote it is not likely to see a 100 return on your account. It is that kind of thinking that drives me crazy. First off, he is only starting with 40K. Everyones goal should be at least 40K in their first year, and it is without a doubt attainable. Realism in the traders world is completely dependent on your "trading world" If I wasn't around traders everyday making well over 100K YTD in this market.........I would never believe it with all the whining that goes on ET. Guess what I am trying to say is that just because you (no one specific) aren't doing it...doesn't mean no one is. I am sure this is going to come of as being a jerk....not my intention. Just think that people like Scottie should know that people like Lescor and others are successful and make good money in this market instead of the "you are going to FAIL FAIL" act.
Although if you do consider trading other people's money, that does not come without a cost. For instance, you get charged .012 in comms instead of .005, or they keep a percentage of your profits. Your goal is to make a living doing this, and these factors can actually make the difference between success and failure. As much as everyone on here talks anout psychology, style, TA, and on and on.. You have got to make sure your commission costs are as low as you can get them to give yourself a better chance of success. The fact that most daytraders fail at this (the statistics!) should not dissuade you IMO. While these numbers do indicate that trading for a living is not easy, everyone on this board is disregarding the fact that "not many make it", by THEIR choice to trade. Simply put, they have not succeeded in making 100% return (or whatever) in a year THEMSELVES, so they have concluded that (since they cannot achive it) - it is not possible. Many traders are currently achieving this. To do this over the long term is the real challenge.
My friend, be realistic. The failure rate in this industry is around 90%. I know I'm going to be flamed for this, but you must plan to fail. By that I mean your current $40K will be gone in the next year. If you don't like that, then don't trade! If you can deal with that reality, develop a plan for a comeback. What do I suggest? Pull your $40K out of the market. Use $2,000 to open a futures account and trade the e-mini. After you lose the first $1,000 they will stop you from trading. At that point, read some books, practice with a simulator until you are making fake money. When you think you're good, put another $1,000 in your futures account and try again. When that is gone, go back and read more books, play with the simulator. When you're making money on the simulator, put another $1,000 in you account... With your $40K you can come back thirty nine times! before you are ultimately defeated. (But even after that you can still keep trying! ) If you use your whole wad to play with stocks, it is so easy to hang on to a big loser and before you know it, you will have lost half your money. Once you're down to $20,000 you can't trade the stocks like you used to, so it screws up your thinking. The smaller your account gets, the more difficult it is to trade, so you borrow some money... Within a year or two you will be gone like everyone else. You'll be much better off playing with small chunks of $1,000, knowing that your big pile is safe in the bank. Once you learn to trade the e-minis successfully, you can increase size all you like and make all the money you need. If you feel you need help with education, then a prop firm is great, but like has been said before, they want $10K of your money. (This of course, is for you to trade, but the odds are very great that you won't leave there with the money. Specially when you're learning. Remember, at $10,000 a whack, you only have three shots at a comeback.) Another alternative is to spend some money and buy two educational courses: One for about $2,500 and one for about $1,000. Then post ads in the classified section of ET and swap them with other traders for materials you haven't seen. This give you access to some of the best training programs without having to pay for all of them. Prosper! kp
... OK. Where shall I start? First, at the risk of being frowned upon, I must again swing the warning finger... 1. Yes, you must be prepared for failure. 2. No, you shouldn't prepare for failure. Does this make any sense? Well, my point is that you should have a backup plan before jumping into throwing away all your capital. On the other hand - You MUST have confidence that you will make it. You are what you think you are. You are your own self-fulfilling prophecy. If you have the goal and image of success in your head at all times - You may succeed. It will also help you get over drawdowns, which can be initially devastating. The longer you trade, however, the better you will become, and with it comes rising confidence and from confidence comes capital commitment and from that eventually comes profit. Until then, however, it's a long journey. Probably longer than you might expect. You should have an undestructable self-confidence and discipline in pursuing your goals. Or as Paul Arden titled his book: "It's not how good you are, it's how good you want to be." People on this thread say all sorts of things. They said 90% of Traders don't make it. This is not an accurate figure anymore. Actually, latest stats say that 97% of Stocks - and 99.6% of Futures Traders ultimately fail in their pursuit. An article mentioned recently said that the number of active "semi-professional" Traders has decreased significantly over the last 3 years. As you must realize, these people were full-time traders, not beginners. Please realize the numbers you're up against, and don't jump head-over-heels into your pursuit. Superior Excellence is just the beginning! You must be excellent. You shouldn't even start committing capital before you are. And let me say this: 70K in your first year? NO! Yes, it can be done, but not during your learning curve. And particularly don't aim for it - You'll just be motivated by greed. What you should focus on is how much you could lose in your first year, not how much you can make. I'm dead serious! If you have a great loss-plan, then the (hopefully larger) wins will outdo them and you'll be fine off. Always know how much you're risking on a single trade, and try not to risk more than 2%, if that. Be disciplined. Throw the money idea out of your headspace. If you want to make $130K, then go back to your old job. If you want to be a Trader, learn how to trade first. I'd recommend you trade by simulator for the first 6 months. That way, chances are higher that you'll actually end up with a smaller loss / larger profit at the end of year 1. If you've learned well, you can catch up to your goal in the 6 months after. If you jump right in, you can realistically lose it all in 1-2 months. Use your $40K for backup and living. Live a quiet and studious lifestyle. Don't go out. Study instead. You cannot afford to lose focus during this important learning period. If you can Go through 1-3 good Trading books a week, making notes on each page's margin as to what's important, plus writing down extra stuff in an exercise book high-school style, collecting the good insights and compiling them well afterwards, by for example writing a book, even better. On top of that, you should study charts in all timeframes for 5-6 hours a day. The "google eye" effect is a first indication of success. Use a good charting software for all this. eSignal is my favourite (I know I'm gonna get curry here now LOL), and is, with the restructurization of IDCO going to outdo all competitors, such as TradeStation. IMHO it long has, anyway. I have Investor R/T, Sierra, Medved QuoteTracker, OmniTrader, TradeStation and many more - But eSignal today tops them all by matters of functionality and reliability. If you don't want to spend so much money and are just starting to learn, you could use QuoteTracker, with IQFeed. But again, it's up to you. Forget about money. You're not here to make money. You trade to trade well. Turn you P/L into a % figure, not $. In a frontend like Futures-Trader you can do that per mouseclick. Don't ever look at $-term P/L figures, it doesn't work. Forget about money. Let me say this here before I finish: I have a mere $60K in my Scalping account and I often make a few thousand dollars a day trading the ES/NQ with it. I almost made $3K today with just 3-6 contracts at a time. I draw on it all the time, too. It can be done, with practice and patience. The rest of my money is in other accounts (longer-term trades and for hedging my scalping account), my residence, business, gemstones, jewellery, sports cars- you name it. Try too keep as much of your equity as you can out of your high-risk accounts. Trust me. You'll remember these words one day. Don't be greedy. If you can put food on the table and fuel in the car, be happy. Be very happy. If you survive, and follow these rules, you can make more than me now within 3-5 years. For now, however, don't fund your account with more than $4K. Any additional deposits will indirectly go into "Scientist's Life Improvement Fund". Amen. Work hard and and you will be rewarded. Good Luck to You. Yours Sincerely, ~The Scientist
Congratulations. You have just posted what is beyond any doubt the rudest, and most ill informed message of the year.
The responses of caution to the idea of returning 100% net in a first year of trading are hardly idiotic. They were very intelligent and should be heeded. What IS idiotic is your response. How a fool like you gets off insulting traders who are vastly more experienced, obviously more intelligent, and certainly more helpful, is beyond comprehension, and one of the negative aspects of a site that has no barriers to posting. You would do best to crawl back into your hole and avoid providing any kind of advice to anyone about anything, ever.