I made it in my first year of full-time, however I had traded about 3 years part-time before then, so I already had a reasonable amount of experience and had built up a method and track record, giving enough evidence to make me think it could work. I also started full-time at a fortuitous period, late 1998 as stocks were making their big run up, so there was lots of volatility to work with. I had a couple of poor years in the mid 2000s as volatility collapsed (VIX at 10 is not good for intraday trading) and black box programs cut into some edges, but did well before and after then. For someone starting out as a noob, I would say expect 2-3 years of losses/breakeven/small profits unless you get lucky and run into a good market, or find some kind of good market opportunity. I typically trade 25-50 round trips per day. My intraday profits are about 50% from grinding out a small edge on scalps, and 50% from 2 or 3 bigger trades a week where I see a good setup.
It depends on the method. If you are taking advantage of some kind of inefficiency in an illiquid market, then you are limited by size, not by initial capital. For example you could get in and out on 1000 shares in a small stock or 2 lots in a minor futures market, but not 5000 shares or 10 lots (without paying a lot in slippage). So let's say you can make 30 ticks a day or $0.50 per day. On 2 lots that's gonna be $700ish, on 1000 shares its 500. That's 2500-3500 per week. Your margin requirement is probably not too high. But if you have 5 times the capital, you can't really increase your profit much if at all, due to the illiquidity. So here your income is dependent almost entirely on skill + screen time. Size is limited by the opportunity, not by your capital or risk tolerance. You would make $100-150k whether you had $50k in your account or $500k. However if you are able to predict direction from time to time, and trade a liquid market like ES or bond futures, then you have as much liquidity as you want in the market. Your size is then limited by your account capital and your risk tolerance, not by the market liquidity. So then you are talking about % returns, rather than daily dollar returns. If you have 1 mill in your account you could make 1 mill. If you had 100k you'd make 100k etc. Only once you got up to trading hundreds of lots per clip would you run into size issues.
Totally correct .. the liquidity has to be there ... For examplem, if you trade SPY, QQQQ, etc then you can probably get about 10,000 shares with about 0.01-0.05 slippage depending on the market ... You could also basket in the Short/Long ETFs, like long SPY, SSO and short SDS/SH.to increase liquidity and perhaps lower splippage....
Cutten is 100% correct on every word in this thread..it is possible, and you don't need 150-300K..it can be done with 30-50K on retail broker account..it's not an easy task,you may never going to get there,but it can be done..
Hi, Cutten, What was life like during those 3 years of part-time trading? Did you lose a lot or only some? The description of your current trading is very very very encouraging. It tells me that I am working toward the right direction (I know no trader at all, I wish I were at a prop firm).
like this: http://elitetrader.com/vb/showthread.php?threadid=109538 or, get a janitorial job at night.