Taking out profits

Discussion in 'Professional Trading' started by Ajax2004, Apr 1, 2007.

  1. Ajax2004


    Would be interested to hear people's opinion on whether they recommend taking excess profits out of the account, say on a monthly basis, for the purpose of:

    1. Locking it out of trading and into some risk free instrument or really long term investment

    2. Help focus on generating steady monthly income

    This idea is mentioned in Mastering The Trade by John F Carter.
  2. If it is your trading account, then you should sweep profits out on a regular basis. Keeping some of that money in, will allow you to compound and grow that account.

    If it is your long term account, then keep the money in and reinvest cotinuously.
  3. Ajax2004


    Thanks for the reply.

    I was referring to short term trading profits.

    Both trading and investments are done in the same IB account now. It's useful from a buying power perspective but makes reports/analysis and statements more complicated.

    I wonder if it is possible to somehow segregate the two either within the same account or maybe add another account?

    In that scenario it might work to transfer short term trading profits to the longer term investment porftolfios account.

    Thanks again for your thoughts.

  4. xxxskier

    xxxskier Guest

    i think it's the only way to hold on to profits and not give it back to the market. inmho, this is one of the most critical components of being consistently profitable over time.

    i withdraw cash about 1x a month, sometimes more frequently, sometimes less frequently, depending on how well i'm trading. when my my index futures daytrading account reaches a certain level, i withdraw everything about that level. i try to maintain a certain level of capital, not less and not more in that account.

    in another account which is just for swing trading and position trading stocks, i tend to let it build up more before taking anything out.

    btw, it has taken me a long time to get to this point....not an easy road.
  5. I recently took 50 % of the monies out of my acct

    I found I was "swinging too much for the fences"

    and although I do that from time to time

    the smaller acct size prevents me from having

    a "blow-up" moment

    perhaps later this yr I will see what to do with that 50 %

    taken out which is only earning me 5 % in a money market
  6. m_dl


    How long has it taken you? and what was your road like?

  7. My mentality on this one is totally different. I have a full time job and whatever I make on that pays for all the bills. My trading account is extra cash. I have promise myself that I will not take any profits for a very long time until I hit the 7 figures or maybe close to it. This way my buying power grows bigger all the time. This is where the saying "MONEY MAKES MONEY" comes in to play. If I'm not comfortable on a trade I stay on the side, but the funds stays inside my account until I see a good trade.:)