I've just reached my one year anniversary of trading, it has been decent. A little about how I trade and with what: I have about 500K TOTAL in my trading account, and about 10% of that in the bank. My annual nut, including saving 20% of (anticipated) profits, is 100K. So, if I can make 100K, pay 30 in taxes, put 20 in the bank, that leaves me with 50K to pay my nut. In my first year, I made 100K profit (102 to be exact). I trade electronic mkts only, and a few pit straddles/strangles. I start year 2 with 500K to trade with, and 70K in the bank. My question is: am I just running on a treadmill here?? I know that if I can be consistent, my account will grow....but isn't this too slow?? Can I keep this up and ever grow this into something substantial?? Some years will be better, and some will be worse. I realize that. I'm just a little frustrated feeling that I didn't make ENOUGH and that to TRY and do that would expose myself to additional risks that I would rather not take. I easily could trade with bigger size, but i trade scared and always assume i'm wrong. Is this conservatism going to kill me? Or is it a good thing.. Just looking for some words from an experienced trader who may understand what i'm thinking... Cheers...Happy New Year (glug glug) PS - the wife took me to the Olive Garden - which was lovely..can you say 'gift certificate'?
Great work Poh poh your way ahead of me in absolute dollar terms. Re being conservative or staying in high gear - I feel do what feels right as you can only know if you really do it with feeling. If you feel both equally then take the middle ground. I also just completed my first full time year of trading last month. I had come back from teaching english in Korea so I had money saved up for living expences, and I have been living cheaply in this period, whatever it takes is my motto. I have not made any withdrawls yet - prefering to live of savings. I feel that it is getting even more difficult to maintain my momentum because I have crossed the phase of initial difficulty having seen alot of things with thousands of hours of screen time. However, the dollar amounts are getting higher, and that is a new challenge now to keep my discretionary system going. I am thinking to move to another city/country if I continue at this rate by years end because I feel it would be easier to deal with the transformation that is going on. You could say I am looking to set up my total immersion phase at least for a couple of years anyway. Started with $3000 and now sitting on 4 times that. I came close to blowing my account after the first 3 months (I have done this once before when I had an account in Korea) and that period was hell on earth and I stopped trading for a month. But a couple of good gold trades in recent months have seen me through. Still trying hard with aussie, euro and gold, although these narrow mid August trading ranges really suck.
Thanks man.. whatever it takes is right.. I know that it's going OK...not brilliantly, but OK... Can't complain being net net positive... I just always wonder if i'm running in place...
Both of you traders did an EXCELLENT job this year! Keep doing exactly what you did before in reference to risk management. Please don't change a thing. If your chosen market(s) become(s) more favorable to your method = approach, you will each make even more money in year two. If not, your losses will be contained and easily survivable. One of the biggest killers of a fledgling trader career is ratcheting up trade size - risk size way too soon. Making $100k on $500k account balance is excellent, likewise +400% on modest account as well. You still have a lot of learning to come... trust me and many other jaded veterans in here on that fact! Keep the price of those real-money lessons small, keep your emotions likewise in check and you will be just fine over the course of time. Congrats, and happy "1st anniversaries" :>) Austin P
PohPoh - Great job. I would approach your second year much like you did your first year. One or two years in this business is not enough to consider increasing your risk. You still have a lot to learn. If you return 20% on your money for the second year I might consider increasing your equity by 10 or 20 %. Good luck!
You have plenty in your account to succeed over the long haul. And your strategy of socking some away into the bank makes a lot of sense. Whether you're on a treadmill or not depends in part on what you "need" yet in life ... with $500K to trade with I might assume you already own a house and have some other needs satisfied. So a lot may depend on your debt, or lack thereof ... if you're debt free then I think that you can succeed long term given you maintain discipline. When I left my job in 1996 to trade I had no debt with my house paid off. Such a situation makes for less stress and less pressure in the early years of trading. 20+% in your first year is a good year.
You made $100k profit your first year and your wife took you to the Olive Garden??? Dude, if you can't reward yourself decently, how do you expect to break to the big time? Think bigger man. RoughTrader P.S. Post back again when you've seen your first $50k or $100k drawdown. After seeing the runup you had as well as this kind of drawdown, you will be able to profile yourself with appropriate money management parameters.
Hey, dont diss the Olive Garden! . I'd go just for the bread sticks . Anyway, good job on your first year!. I wish I could have done as well as you have.
Yes, August trading does suck. This is my first unprofitable month in the currencies this year. Feel like all this whipsaw action is churning my account . Hopefully September will see more follow-through in the FX moves. RoughTrader