Is it me, or has Mr. Jack Hershey had the life we would all love to have and experience. I mean, he seems to have experienced everything i for sure hope to experience one day from trading. It would be nice to buy all the toys i dream about and do as i please, including wiping my ass with a roll of 100 dollar bills. Okay, maybe that's going too far with the wiping the ass with money, but you get the point. Something to shoot for though.
I plunked down $25k and quit my job. I lost 50% in 3 months. I slowed down, lost the rest in the next full year. I quit. almost, I traded super cheap options... got back in with remaining retirement $. Lost it. so my expectations, whatever they were, were to double my money in a year, etc. My reality was pain. 5 1/2 years later, I'm just starting to do it right. Statistically it is a vast improvement, real money isn't coming in yet, but it's a big difference and I cringe thinking back, looking back, replaying early trading videos, reading my journals, looking at my screen captures of my market analysis & trades....yikes.... No one could have told me this, I had to learn the hard way. GL
daytrading without 100k's almost never works out. you spend way too much on commission and even making 50% a year thats only 50-100k. but swingtrading with a few 10ks can work out, next to a day job. much less capital required, much less stress, and still a day job.
I think having an income target is setting oneself up for failure as it produces pressure and expectation. I thinking having a workable plan or system and taking or extracting from the market what it can give is the way to go. Get out of losses and let profits run. Odd to read Hershey shaving advice. Hey Jack, clippers come with guards to trim flavor savors, no need for scissors! Also JH, you still live in Bucks County? I thought it was Colorado? I used to live in New Hope. Tried to PM you but you appear to not allow it.
A target gives you an idea of the volatility in your book vs the underlying assets you trade. If the imputed volatility in your book is way off than the volatility of the underlying assets then odds of failure are very very high. If you expect to make 100% trading SPX futures (10 vol) then you are expected to move 10x what the underlying is moving. Only three ways this can be done: 1. Leverage to magnify the SPX futures impact on your portfolio 2. Shorter timeframes: to make more trades to capture more and more of those 10 vol moves. 3. Improved efficiency: have more winners than losers. When you combine these three factors you can determine if your trading plan is going to be successful based on what your annual target is. If your trading plan won't hit the target, either you have to adjust your annual target or revisit 1,2, or 3 above; though it's much tougher to manage those than to change your target pnl. That's why annual targets are important. It sets the trading plan parameters.
What about improved profit factor? Shorter time frames increases turnover and efficiency never hurts, but all of that assumes a constant profit factor.