Trading is a luxury, not a necessity. He can choose to not trade until he saved up enough of his own capital. I don’t see a problem trading his wife’s money if he is profitable. I see a problem using his wifes money as «tuition money». Do you agree? Maybe we’re mincing words, but you said people blame being undercapitalized, yet you suggest 14K for a few MES. I say 14K is a VERY good account for trading 1-2 MES. Definitely not undercapitalized. I also said 1-2 MES ain’t going to take you anywhere unless your trading is absolutely stellar. Where is our disagreement? I know someone who started out on his own with a 500K account. I’m 100% confident that if I had a 500K account I could trade for a living comfortably. Sadly, I do not. Maybe there is a guy who started with one MES and have now compounded that to 100 ES. I’d love to hear that story and meet the guy. Maybe just simulator trade, then.
I don’t agree or disagree. He asked for comments about his intention to trade. He said he had $140K plus another $50K to add. I offered my thoughts on that. The context was adding $50K to the $140K. I said adding another $50K was the wrong course and I suggested he not take on the mindset of an “undercapitalized” person who thinks he has a better chance of success with a larger account. I also said a winner takes money out of the account, not put more money into it. The $14K is a separate suggestion and unrelated to an “undercapitalized” mindset. Okay, but I don’t see how that’s relevant to his request for comments. I suggested as a beginning point that he focus on learning and to keep the tuition low. I don’t know about one MES to 100 ES as being any kind of standard. That’s your invention. I have no comment about that.
it’s hard to scale up your size and change your mandate and lower your risk tolerance all at once. I would slow it down. Offer to take 30k and work on perfecting your new mandate and risk parameters. Then take more money. not to mention the markets have changed over the last 6 months. Covered calls are a bullish strategy. They will perform similarly to being long only on the downside. It’s hard to not lose money when you are long this market. This part is your fault for not setting the expectations with your investors.
I agree with Gold Digger. You should only be trading your own capital. Risking the money of family will lead to disaster. Emotion is the only reason traders lose money. You admit it's a problem, which is common, so it needs to be dealt with. Until you can trade without emotion, it's not responsible to be trading other people's money at all. Reign yourself in. Return their money, trade your own money only, improve your technique, build up your account through effective practices. Do that, your account will grow, you don't need outside capital. Happy trades!
You need to say why you think you have an edge (positive expectation) on your trades. Why in the world do you think you can beat both the competition and frictional costs of trading? I can tell from your writing that you probably have negative expectation on your trades but why do you think that you have positive expectation? ___ Look up the meaning of "positive expectation" as without this, risk control, aka money management, will not make you a winner.
Position sizing is very important before making trades. Traders should also understand and calculate the risk and the profits and then make your trading decisions.
Game plans are not enough. What if I had a game plan for boxing Mike Tyson? Keeping loses smaller is not enough, you need and edge that you can explain and win with. Example: Keeping losses small will not allow you to beat roulette because you have a disadvantage on your bets. ____ What you want to do is try to find a winning trader and work for them. This may not be possible but keep your eyes open. You want someone you do not pay as gurus-for-hire are mostly hustlers. At least see if you can get to know someone who is successfully doing what you want to do!!! ____ Also, I would stop trading family money or at least tell your family you will stop trading the money if you lose a certain amount.
Oh man this is just one of those things.... very similar to getting older and wishing you knew back then, what you know now. It's crazy to see how many people have access and get access to pretty large account sizes and don't understand or comprehend what they truly have in front of them. Wish I could say I was different, but in my younger years I had access to a pretty large account and didn't understand what I had, nor how to effectively trade it. So, can fully admit I am the pot calling the kettle black here. Thankfully have my emotions under control now and have removed all excuses. But it still will likely be awhile before I get back to where I was.
hello hurricane_sh, Do this and thank me later. Give your family back their money. Stop trading your own money. Stay in SIM until you build at least a 1 year track record that is profitable per your liking. Never forget Warren Buffet first and 2nd rule Don't lose money.