Possible to become a success with 5k?

Discussion in 'Professional Trading' started by Tigo, Jan 2, 2007.

  1. 10 years ago I walked away from trading the full s@p because I knew I was undercapitalized and the odds were not good even though I was successful for over a year and was offered a position on the floor with a local. Back then I had some demons and a 25 year old in Chicago? I knew I would be done for.

    I knew that is what I wanted to do eventually but felt it would be better to delay my gratification. For the last ten years I have busted my ass. Got a real job, flipped real estate, started 2 businesses, bought investment property, dealt beanie babies you name it. No fancy home, no new cars for several years, worked holidays and did some of the most god forsaken things at all hours of the night and day, all while getting married and having two kids, and putting wife through graduate school in the early years. And living so far below my means now I look at it as squalor so I could squirrel away every quarter, nickel, dime and penny I could roll and take to the bank.

    Ten years later with a net worth in the good seven figures and good six figure (somewhat passive) income, I am starting to trade the ym and I love it and am just as passionate about it now as I was then (and I still roll my change, just donate it now.)

    My retirement is already secure, my kids education is secure, hell even their weddings are paid for, and so is their retirement. It is much easier to trade when you do it and you don't need the money. But look at what I had to go through to get to that point.

    People look at one of my busineeses and say "that place is a gold mine" all the time because of the volumes of business I do. Do you know how much work it takes to mine gold I ask them.

    Now I am looking to build a trading record, perhaps running some money, buying a a seat on an exchange, whatever it becomes. Again, I realize even at my level this will not come for years.

    I believe it is the discipline in the ability to delay gratifation that leads to ultimate success in your endeavors. If you are chomping at the bit to do something because you love it, don't do it just because you have the minimum amount of firepower. Pay your dues first, it is much easier then paying later.
     
    #51     Jan 4, 2007
  2. With 5k... too risky. You´ll need impossible returns to make a living out of it. Even if you beat the market 20% a year it would take many years for you to make a living out of it.
     
    #52     Jan 4, 2007
  3. So, with everyone saying that $5k isn't enough ... what are your thoughts on how much you should start with reasonably? Better yet, what did you start with, and why?
     
    #53     Jan 4, 2007
  4. It's not how much $$$ you have it's the discipline and fortitude you have to keep coming back for more, be ready to fail till you are in you 70's, be ready to live like the Smith's, not the Jones' your whole life. Be ready to take a second job delivering pizzas if you don't make it and come back for more till you do.

    It takes several hundred thousand dollars worth of time, of blow ups, of income to support yourself while you are learning, or just pure trading capital to do lots of stupid things before you make it. I am not telling you it can't be done. No matter which way you approach it you will invest several hundred thousand dollars in resources.

    At my going rate now I invest more in a day than my employees make in a week.
     
    #54     Jan 4, 2007
  5. snoop101

    snoop101

    Does anyone have anything positive to say?

    Also what is the meaning to "making a living"? If someone didnt have a car and lived in a condo that wasent to high in payments every month and have little to non debt then yes some one can make a living, but if you have 2 kids a huge mortgage and 2 cars.. ohh and a dog... well then you cant make a living.
     
    #55     Jan 4, 2007
  6. ibalz

    ibalz

    That is one of the funniest things I have read in this thread. Perhaps up north near the Arctic circle you might find an igloo for 5k. Where in Canada can you get a condo like that? Sunnyvale?

    hehe

    To the OP, good luck my friend, I too am on your path to freedom.
     
    #56     Jan 5, 2007
  7. snoop101

    snoop101

    leverage
     
    #57     Jan 5, 2007
  8. Henry Ford did ok starting with less than 2 dollars...

    Of course 2 bucks was worth a lot more back then
     
    #58     Jan 5, 2007
  9. This has made me laugh all week.
     
    #59     Jan 5, 2007
  10. "My main question is that I have 5k in capital right now and would like to hear any suggestions as to how best to get started in increasing my wealth."

    1. get "New Trading Systems and Methods", Kaufman, read it cover to cover, twice. See all the videos on http://www.cboe.com/LearnCenter/webcast/archive.aspx
    2. Get a cheap direct access broker such as interactive brokers
    3. trade such that you do not risk more than 2% on any trade. If you are down more than 6% any month, stop trading and paper trade instead.
    4. when you begin to keep your money consistently, learn to quantify your risk more precisely and increase your risk up to 5% of your trading capital.
    5. After six months, read "Mcmillan on Options," "Mathematics for Finance" , Capinski, and "Option Volatility & Pricing", Natenberg.
    Learn to use options to increase your statistical edge.
    6. If after a year, your account is flat, you are headed towards an great career in trading. Continue to risk no more than 5%
    7. Reduce your risk to 1-2% when trying a new system or a major market change has occurred, i.e. bullish/bearish/rangebound/volatility change

    Expect a 2 year learning curve minimum. There are tons of lessons and a variety of market conditions you need to tango with before you can dance.
     
    #60     Jan 5, 2007