95% fail at this game within 1 year. It makes no difference if you are trading with $500 margins or using 30k per contract. Without discipline and proper risk management you will fail as well. Why should one more money in an account that is not even insured when they can put it to work elsewhere ?
I do agree with you that without discipline and proper risk management any trader will fail regardless of the size of the account but you canât deny the fact that if you have only 4k and aim for 360% or more a year it represents trying to outperform 95% of all traders and investors in the financial markets. From a statistical point of view it means performing outside 4 standard deviations from the mean or in technical terms trading âoutside of the Bollinger Bandâ. Kevin is right, the key number here is the 4000, not the 60. jjrvat
the key difference between doing $60 with $4k or $40K is that a $60 loss equals to a 1.5% DD in a $4K account while it only represents a 0.15% DD in a $40K account. The DDs have a logarithmic scale, ie a 50% loss requires a subsequent 100% profit just to breakeven, and thus it much easier (percentage wise) to recoup a $60 loss in a $40K account than in a $4K account. this is the basic underlying concept of any position sizing and risk management approach.
It does not matter if he has 1000 dollars, 4000 dollars or 40 000 dollars in his account. When you buy one YM contract, you will have 60 000 dollars at risk, it equals trading with 60 000 dollars worth of stocks. Forget the 4000 dollars. Futures are leveraged products, you only need the initial margin in your account to buy one contract, but again, your risking much more than that. example: you buy one YM contract, imagine an extreme event, terrorist attack or whatever, the dow plunges 3000 points, you will lose 15 000 dollars in no time. so you will actually owe money to your broker if you only had 4000 in that account. MAKING 60 DOLLARS A DAY EQUALS 0.1 PERCENT PROFIT (60/60000) PER DAY! Very doable, but especially in the beginning you´ll have to apply tight risk and money management to avoid large drawdowns if 4000 is your total capital.
Gentlemen Very good trader ,which win 600 from 1000 operations by risk reward 1:1 (50$ risk for 50 $ reward ) can without problem catch some 20-30 consecutive losse's in this 1000. You can calculate ....
MAKING 60 DOLLARS A DAY EQUALS 0.1 PERCENT PROFIT (60/60000) PER DAY! ? Dear Sir Do you meet multiple operators in he's life ,which have made 1% per day on capital through year ? with capital reinvestment to end of the year that would from 4000$ - more as 50000$ Your respectfully P.S. Can any from you post CFTC secured record of any operator ,which made regulary 1% per day through year ? With very high chance -No Regularity is rare 1300% per year for small account possible exist by one operators from 3000- 10000,but this would have not regularity +1% per each day.
There are two level of analysis, from a market perspective and in a strictly mathematical sense youâre right $60 a day with 4k represent 0.1% profit in a YM future contract (60/60000), but on the other hand youâre forgetting the other side which is the trader perspective: 1. Moving your account from $4000 to $18000 (+/-$14.000 profit + $4000 capital) in one year represents +/- 360% profit which sounds unreasonable in comparison with what the TOP of the TOP investors and traders usually make. 2. And, as ASAP clearly pointed out [The DDs have a logarithmic scale, ie a 50% loss requires a subsequent 100% profit just to breakeven ⦠THIS IS THE BASIC UNDERLYING CONCEPT OF ANY POSITION SIZING AND RISK MANAGEMENT APPROACH] Jjrvat
It looks like nobody got the math right so far. The 60K is not relevant. The 4000$ is more important but not standing alone. The really important number is the difference between the starting account ($4000) and the minimum required intraday margin (let's say $500), and let's throw in commission too, for reality. Since commission is about 1 tick ($5 for easier math), and the difference is $3500 (or 700 ticks). So instead of counting in money, let's count in points. He can afford to lose 700 points (minus commission) before he doesn't have more money left to trade. The daily $60 goal of gain is 12 points/ticks, but we have to add for commission, so if it takes 3 trades on average to reach net 12 points, he has to make 15 points, if it takes 10 trades, he has to make 22 points before commissions. I would say 700 points is pretty good for letting the trader to have quite big DDs. Of course more is the better, but if he has a fairly decent system, he should be able to survive with 4K only.... And if he blows, at least he only blew 4k...
"This well-known saying is part of a phrase attributed to Benjamin Disraeli and popularized in the U.S. by Mark Twain: There are three kinds of lies: lies, damned lies, and statistics. The semi-ironic statement refers to the persuasive power of numbers, and succinctly describes how even accurate statistics can be used to bolster inaccurate arguments." Lies, damned lies, and statistics *** Oh, and here's another one for ya: "47.3% of all statistics are made-up on the spot" - Steven Wright *** Your math games here have little to nothing to do with actual trading, except to express the limitations of the group as actual traders, and KS' bogus $100,000 bet not withstanding, it is quite possible to make $60 a day on a $4k YM account (hell, I actually thought the suggestion was kinda conservative myself). Considering the level of skill displayed by the naysaying group in general on this thread, I'm going to do something I thought I'd never do: I seriously recommend you give the services of www.puretick.com a try, maybe they can help you figure-out how to actually make money in this game, instead of just playing math games. What a bunch of tools. Jimmy Jam
do you really believe if one loses $3500 out of an $4000 account, still will be able to recoup those loses? of course not.