don't most new businesses fail in the first year, or is it first 2 years, much shorter for most new traders i saw a documentary about Avon where one woman had quit her at least C$50k/yr job as a nurse to work fulltime selling Avon; the main thing with that work is being able to build a sales team who can sell - the manager collects a commission from their sales http://en.wikipedia.org/wiki/Dan_zanger Zanger "turned $10,775 into $18 million between June 1998 and December 1999" he was 34 at the time and had at least a decade's part-time trading experience plus a parent that was an avid trader, but an amazing feat especially since the markets went thru an inverted U shape - he must have done a lot of shorting what's the 'business' part of trading ? money management ? disciplined work habits ? profitable trading system ? i wouldn't trade stocks, only forex / futures mainly because of the available leverage and shorter for me trading time - best bang for bucks one can day-trade 1 futures contract for $500, $1,200 to trade the equivalent fx amount so from my pov with a $30k margin account that would be more than enough to trade with, i'd be comfortable trading 20 6E contracts, and lets say i made net 30 ticks per contract, that would be $7,500 per trading day how much - what length of time - - what minimum length of time is required to obtain the required education, training, experience in order to become sufficiently competent to do the work successfully / profitably ? how long is a piece of string, or is it endless ? read the Journals
Why except big banks? It is possible to live off a $30,000 account, making monthly withdrawals out of profit. It is only possible for an extremely efficient trader. If you are wondering whether it is possible, you are clearly not yet at the level you can do this, so should not even consider it at the present time. While possible, it isn't sensible and involves the use of too much leverage to be viable long term. It may be enough to build the account up initially, being much more conservative with leverage as the account grows, perhaps not even increasing contract size untill $100k. I do not see the point of your question. Being told it is possible is not the same as knowing you have the ability to do it. What if I told you I knew an individual who pulled himself up by the bootstraps with a $10k futures account, doubled it each month for three months, and withdrew the next years living expenses out while still leaving $50k in the trading account? Would that give you the confidence to risk using a 20k trading account as your only income? Equally, what if I told you I knew five people who tried to trade for a living with less than $200k and they all blew up? Would that convince you that it could not be done? Three men make a tiger...
i built up from a small base. i should have had more of a base (and stayed at my then-job longer to build it up) but that's another story and set of issues. i can completely relate to the part about having great % returns, but not enough to have as a job, because i was concerned about that for my first few years. i had great returns but was considering going back to the techie work force because it wasn't enough money for the risk involved. however, i only had one down year, and that would not be a down year if it happened today (commissions are greatly reduced). if you're struggling to break even, that's the first step. then, struggle to make some kind of money. that's the next step. that's the one i was at when i was debating whether to go back in the 830-530 or longer workforce.
You didn't mention exactly what is a small amount but whatever it is you obviously know it's under-capitalized for whatever it is that you're trying to achieve. I highly recommend you throw in the towel as you call it...save your money into a nice chunk of change so that you no longer consider yourself as under-capitalized. I knew a few in the same situation as you and they realized it would take too long to build that small capital into a size big enough to make a living from trading via the small profits they were making from that small capital. They then quit trading...worked 2 jobs to build up their capital fast and was back at trading within 3 years...now profitable and trading for living although not making big money...enough to equal the income they had when working 2 jobs. However, be careful, you need to distinguish if you're breakeven because your trading plan isn't solid or because you're under-capitalized? Simply, if there's a problem with your trading plan...having a large trading account isn't going to compensate for the flaws in your trading plan. Last of all, trading for a living (sole income) could be different from one trader to another depending upon their debts, existing assets et cetera. For example, I know a guy making about 60k per year with no debts...happy as can be. In contrast, another guy making about 142k per year...with lots of debt, high maintenance wife and creditors knocking on his door. Thus, regardless to your income level as a profitable trader...if it's not enough to pay your bills and enjoy life...your business as a trader will eventually fail in it's ability to support your lifestyle. That in itself will increase the odds of having your personal life problems show up in the trading. Mark
And how much would this theoretical trader make with a $30k account? $10k? $20k? $30k? $40k? $50k? $60k? $1 mil? And don't reply with . . . "if you don't know the answer, then you obviously don't have the skills to understand the answer." Serious reply requested. Thank you. JS
I have turned $2300 into a little over $2,200,000, not exactly the stuff of a market wizards, but enough to satisfy myself. After living primarily off off my trading profits for over 14 years now (it was about 98% of my total income over that time) paying taxes, buying a house and other capital expenditures I have a little over $1,100,000 in my two trading accounts - taxable and IRA. Being debt free now and having just taken early retirement Social Security benefits, trading has become a lot less stressful. Looking back though there was nothing glamorous about trading. It wasn't an avenue to instant or overnight wealth, just a slow and steady grind upward year after year. I never gave up my regular part time job until I had accumulated over $300,000. I never took large risks but preferred to stick with stocks or mutual funds in tight rising channels with little to no downside volatility. Unlike most traders I hate volatility. I find most of the conventional wisdom about trading success are fairy tales perpetuated by those who can't trade their way out of a paper bag. I also rarely shorted and stayed away from the S&P, Dow, and Nasdaq because I never could find an edge there. Speaking of edges, I find it best if traders find a niche market to trade. Learn all you can about that market and while you don't have to trade it exclusively, it is always there if you need it. In my case, my niche was the junk bond market which has probably accounted for close to 50% of my total trading profits. As for shorting, it wasn't that I couldn't short or was a perma bull, but simply because I have a very specific trading methodology that capitalizes on the dynamics of bull markets which are smoother and longer lasting than the dynamics of bear markets which are more violent and shorter lasting. The smartest move I ever made was opening up an IRA account because I can't think of a better wealth creating tool than the tax free compounding of capital over time.
Theoretically: IF: you have a $30000 account and risk 1% per trade and Win 40% of the time with a 1 to 2 risk reward ratio and trade 10 times per week , 50 weeks per year You will make 24,000 per year before commissions & slippage. Of course if you change any of the above you will make more or less. Your mileage may vary. You can build your own spreadsheet to give you the answer you want. Theoretically:
Ignore all the idiots who say, "it can't be done". In the grand scheme of things, intelligence, planning, money management, experience etc. are byproducts of the ego. It's usually the people who stop thinking and start doing that make it big. Life rewards those who forgo their ego. Intellectuals will never become rich. Luck is dumb and she's a woman. She will humble the prideful, and exalt the foolish. In fact, there is even a section on this in the Bible: "... the intelligence of the intelligent I will frustrate" Sometimes, to make it in life, you just have to be foolish and take the risks...
it can be done,and you will need everything in the above post to succeed,and a business plan,but it doesnt sound like you have found an edge,something that sets up over and over that you can easily recognize,,stop trading until you find something along that line,when you find that,take weekly chunks out of the market and as your acct builds up,you can increase your size,its out there and you wil find it,if you watch this thing day in,day out for long enough,it'll come to you,wait for it,recognizing which trades not to take is the hardest part of trading, making money is easy,hanging on to it is hard,until then you are just food for the sharks