Hello KCalhoun, I agree with you. It is very interesting exercise. I did it once, took a long time, but it forces me to journal my trades. That trade management is sooo important, because there are sooo many ways to exit a position. That is good exercise of decision making and record keeping.
I thought you need $25K to bypass the PDT. Plus, what can you buy with meager 2K other than some junk penny stocks?
That video was a classic. I am an IT professional (IT Support), and understand the software developer types-- arrogant, confident, smart, and very rules-based. Dude thought he could read books on technical analysis and trade mechanically. It makes sense from his perspective, because programmers have been trained to think logically, systematically (i.e., Price is +3SD -> Sell). Out of all the books he read, he didn't read about hedging through the use of spread trading. Obviously, dude is several orders of magnitude smarter than me. However, I don't think I would lose 350K in the markets. I would probably go into deep depression if I did something like that.
Yes, that is fine. Put $30K in the account and only risk 0.06% per trade or $18 per trade. The point I am trying to make is trade extremely small until you prove consistent profitability. Once you do that, then scale up. A cocaine distributor not going to front me 1000 kilos of coke to sell after our first meeting right? No, he going to give me maybe half a kilo to prove my trust and how fast I can return a profit. If I do well, he may let may get 2 kilos, then 4 kilos, then 6 kilos, and on and on. Same as trading, start small, keep the capital to the side for other business moves incase trading money take awhile to come.
That guy in the video is bullshitting, he did not lose no $350K, just an internet marketer get subscribers and likes to sale products and services. He did not show his broker account paperwork showing where he lost $350K
I love the cocaine analogy! I'm glad my early trading days were with small accounts so I understand what PDT and margin calls are. It'll be interesting if the new covid traders are staring out well capitalized and trading before they understand the risks. Time will tell I guess. My greatest edge is I know I don't know it all so I'm always checking my 6.
I am not a huge fan of the coin toss theory as it infers the market is some random beast to which it is not but I take your point that trading in itself is statistically based. There are many things in nature that are unknown and so we develop tools to make sense of it all. Trading is no different. If you have the right tool set to measure what is going on, it all starts to make a bit more sense. The question then becomes "What are you trying to measure?" and "Is it profitable?".
Does it make sense to do both then; automate so you can trade a diversified portfolio and manual trade an index?