Taking it to the next level

Discussion in 'Professional Trading' started by ralph00, May 26, 2004.

  1. I've been trading interest rate futures part-time for my own account for the last four years. I have averaged an 85% return per year. My account balance is small (around 10-12K). Instead of allowing it to compound, I have been taking money out as I have made it.

    I now have the confidence to start doing this full-time. My limited capital would make it impossible for me to make enough.. What would be the best way to take my trading to a level where I could make a living at it?

    I am not a daytrader. I am not a technician. I sell when I think prices are too high and buy when they're low. I've averaged about 25-30 round trip trades in these past four years. I had talks w/a prop firm in Chicago. They kinda offered a position where I could trade their capital, drawing a 25K salary and keeping 50% of the profits. However, they wanted me to trade like they do - in and out of positions, w/nothing overnight. I told them I didn't think I was their guy.
  2. JPG


    I sent you a private message regarding your post. Were you able to read it? -Thanks.
  3. Aaron


    Any friends, family, mortgage or credit card companies you could borrow trading capital from? Any assets you can sell to raise capital? Since you are only making a trade a couple times a month, can you work a job to pay the bills and let your trading account grow?
  4. Your status:

    You saved and established an account.

    You have an approach.

    You have removed all of your initial capital and more and used it for other things.

    You have confidence.

    Your opportunity:

    Use the starting point of capital and confidence to "build" the next level.

    You will have to consider how to apply your skills in a different market and setting, probably.

    A. Reconsider why day trading does not fit your foundation of knowledge and beliefs that give you confidence.

    B. Do the same for Technical stuff.

    C. See if you can build a sensible bridge from where you are to both A and B. Your descretionary orientation is the key. Other commonalities among what you do and A and B can form a base from which to build.

    This can set you up for compressing time mostly. Probably you will not want to shift so emphatically from where you are to where day trading would take you. There is a compromise that you have not considered. You invest in an intermediate term context.

    Were you to go to a "short term" investment strategy, there is only one change you need to consider.

    It is your "detection system" for what you do now. Outside of trading hours you presently make decisions on "overvalue" and undervalue". You do this with respect to a universe that works for you presently.

    Switch from an intermediate term universe to a "short term universe". I will give you the scan for that. It will yield the non compounded average profit per turn that you get now. (15%).

    The intermediate term:short term ratio is 1:7 it turns out.

    You can continue to pull 1 in 7 turns as you do now. Let the other 6 turns compound. This will be about 34 coumpounds of 15% per annum combined with pulling out the same number of profit taking that you do now.

    The change that you will notice most is how each turn you do now that creates 15% profit now becomes a net doubling of capital.

    It is not a challenge to keep doing what you do and simply change universes. And it does not require any more effort in the evenings to speak of and it does not require working full time.

    The universe selection takes about a minute once a week. After a couple of weeks it simplifies to an add/delete effort. the difference that you will notice mostly is that you "see" the "undervalue" go to "overvalue" about 7 time faster than you are used to.

    to get the universe go to stocktable.com and scan for a list of 100 sticks (tughten the EPS and RS to get list length. Use the top of the list and select only the stocks that are beging to rise (under valued). Be sure to choose the ranking means called % increase in volume. For undervalued stocks, % increase in volume is the leading indicator of price going from "undervalue" to "overvalue".

    If you wish to look at their price charts you can see previous excurtions of well over 15% each.

    I would suggest that you not borrow money ever for investing. If anyone sees your progress and offers you money, teach them what you do instead.
  5. If you go full-time, make sure you don't over-trade.
    You seem to be doing pretty well with a small amount of trading. If you do go full-time, it does not mean you should trade more. If you do, you may actually do worse...

    Good luck.
  6. BSAM