I have been studying the market for what I estimate to be around 300-400 hours in the past 7 months. I am opening my trading account in the next few weeks, after my last sessions of paper trading. I will have four years of college during which I plan to grow my trading account, and be trading professionally immediately after college. My current goals are 2% a week on average for the 4 years, partly due to the fact that I am starting out with only $1500, and commissions are $10 per entry and exit, and partly because I know I am still an amateur. Anyway, over four years, I see (1.02^50)^4 coming out at 52.48 times my principal of 1500 for a trading account totaling $78700 roughly. Withdrawals should not be necessary as I will hold a part-time job, although I am not sure about taxes. I am still a dependent as I am in college. Any input will help. Thanks.
Take your 1500 and place it in a good mutual fund. Paper trade for your 4 years in school, or just donate it now to a good charity.
your comm is 1.33% of your account. how much did you generate per trade in your paper account to make 2% per week? why not first save 13.5K and have better odds of making it?
There's your problem. You're figuring in exponential growth, not just getting 2% on $1500 weekly. It's easy to take an account from $1500 to $3000, sometimes even $3000 to $6000, but once you get that high you'll find yourself with psychology problems because of increased trading size and larger account swings. With your logic and exponential growth, 10 years of doing this would bring you $29.9+ million!
I meant $5 per entry and exit for a total of $10 - so it would be about .66%. I will likely start with swing-position and then move toward swing to get around this a bit. Taxes are my main concern, as I have figured it to be the difference between 11,000 and the 75,000 if I would have to pay 50% on it a year.
What broker are you using? Tradeking ($4.95 trades)? Do as much paper trading and continue to read a bunch before you actually put real money on the line. Paper trading is not realistic because of slippage and because your emotions won't be the same with real money.... If you're just about to start college, work your ass off this summer and read as much as you can about the market. I recommend "How to Make Money in Stocks" by William O"Neil and "How to Trade in Stocks" by Jesse Livermore... Be patient... If you want to be a professional, you're going to have to get some internships first. Work your way to getting spots at the top firms (Merril, Lehman, Sachs, etc.) during your sophmore and junior summers... I wouldn't recommend putting any real money until you are totally confident and know what you are doing. I'm a recent college graduate and made the mistake of trading too soon... My stock performance has been mixed, but I lost about 75% capital in my forex account. So have patience, develop a trading strategy, work on becoming very disciplined and your chances of becoming successful will greatly improve... You haven't even started college I assume so there is no rush.
Why not? If you can afford to lose that $1500.. I am sure this will be a great learning experience for you. You won't really learn the real thing until you are trading the real money... so go for it. Mentally treat this as a short vacation to the wallstreet wonderland and the cost you will need to pay is $1500. BTW, would you mind sharing with us what you have learned and practiced in the past 400 hours? Would you mind briefly telling us what's your plan or maybe what are the setups that you are planning to focus on when you start? Not to try to steal anything from you Just try to see if I can give you more specific help... BTW, if you make money from the trades, do take partial of the profits off the table at somepoint and treat yourself (and your love ones) good tangible rewards. It could be as simple as a good dinner or as expensive as a new car. I always do this to myself to keep myself and my love ones happy. And that makes the trading more meaningful. Trading is just one of the careers. And career is just one of the tools for us to bring happiness and fulfillment to our life and love ones... You will never really feel it if you only keep the numbers on paper. Best luck and have fun.