%% ABOUT 0.00% if you cant beat one or all SPY or VOO,SPLG,QQQ benchmarks; espcially with $7k. Don Bright DayTrading Co founder + many years options market maker said ''options are made to be sold''
%% MAKE sure to do some SPY or QQQ benchmarks; if you cant beat those benchmarks, its easy to lose more than $7k. [Worst way + easy to prove that; use leverage before really learning how to trade\ 1% is only 100 mistakes to zero] The good news is the markets are not random\ I did very much worse than random \first year, as many do LOL
I followed Taleb's 80/20 rule. He preached: 80% in risk free investment and 20% in options. My actual: 80% in stocks (instead of risk free investment) and 20% in options.
I agree with @murray t turtle. Don't trade, put in in index fund and keep adding to it until it reaches $100K. I know it sounds crazy but you should watch this:
%% 80% average stock market sounds like a winner I do some ETFs that don't average beating SPY or QQQ in 10 years; so I do that sector smaller , because I am interested in it. Charlie Munger is almost always a good read; he loved to read also
Compounding is real!! On my CDs and treasures, it matters when they mature. I do NOT want a CD maturing at Schwab on a Friday before a 3 day holiday!! In 1980-81 (old geezer here), it mattered when the CD matured. You wanted it to mature on a weekday...To renew or move your CD (this was before online brokers). The principle still remains. Many people do not understand "the float"...They do no understand compounding money on top of compounding money. Your money really does work for you, rather than you working for your money...
1. Depends on how much you're willing to lose when you have consecutive drawdowns. If you're cutting losses then it's likely the loss rate > 50%. Having 5-15 losses in a row is not unheard of, so if losing 15% of your account is just about right then 1% is a good starting point. Of course that 1% would shrink each time in an ideal world, but for a small futures account we deal in single contracts. 2. A job. This is not a joke, at the level of a 7k account you're trading for experience and for the ability to build your trading into a business. Trading is not your job when your account is 7k, it's a seed for something bigger than could grow. When you're using futures contracts, even micros, you'll need to be putting more into the account to keep within your risk management params and getting a pay rise from your job is the best way to do this.