I have been around trading websites and blogs like these for many years. On websites like this one, everyone seems to make money year after year in multiples and no one ever seems to pay 1 dollar of taxes on their gains. Everyone seems to drive exotic cars, live in the largest mansions in America and lives the life of Eddie Murphy and the King of Saudi Arabia. No one ever seems to lose money or get on the wrong side of the market even for 1 minute. No one ever seems to be wrong. Sometimes I wonder why the people on websites like this one simply do not get together and form one huge super hedge fund. You know that a question like this one on Elitetrader will be answered by the elite few who double their accounts each and every week. Those who do not pay quarterly taxes because they can make more money with the gains...actually, everyone on Elitetrader seems to be exempt from paying taxes because of some obscure tax law that exempts them and only them. I sure wish I could meet these Elite few one day. Maybe they can come out to the prop shops (bucketshops) and lecture everyone. These places sure need a motivational speaker as 95% of the crowd there seems not to be able to get it like those on ET can. I am sure now one of the many aliases will come out now to say they doubled their account yesterday or was able to multiply their winnings by 5 times with some obscure complex options strategy...after the fact of course. They were too busy trading then to post up their call before the fact.
LOL so true. Oh btw I don't pay taxes yearly on my account I get the singular privilege to pay mine at marginal income rates upon withdrawal yippe! cough sputter curse
I agree. A serious trader would have the majority of his net worth in his trading account. A gambler only a fraction.
I've never messed with options, and I only know a little about it. Can you illustrate this in terms an options noob like me can understand? I invested $10,000 in TZA a couple days ago and made $700 on it (7%). I figure if I was wrong, and it went the other way, I'd have lost $700 before I bailed out. How much $$$ would I have had to risk to make $700 by buying calls for TZA (or puts on TNA)? I mean...I get that I could make much more than that if I risked losing the whole $10,000, but I'm trying to compare apples to apples, because I think I was risking only about 7% of my investment. What can I get for the same risk ($700)...Just a ballpark answer...no need to look anything up. If I can make more, I'll pursue it, because I don't know how long my new method will keep working. Thanks, SM
I'm quite familiar with trading AAPL and SPY options because I've been sim trading them to test various strategies for intraday and swing trades. They are very liquid, in fact SPY options at or near the money usually have a .01 spread and enough real buyers/sellers to put in a stop at whatever max loss you want to risk without much slippage at all. So I'm laying out anywhere from $15K to $40K for 100 contracts and placing stops equivalent to a $2K-$4K loss (.20 - .40), but my gains have been $4K to nearly $20K (that wa an AAPL swing trade). All sim so far until I'm confident with my strategies.
A typical Elite Trader nonsense thread. If you can compound at 25% to 30% annually you will be in the same league as a Buffett or a Soros.
The best part about this thread is how everyone tries to bust out some math and show everyone how they little the know about the science. Who says forums can't be educational! Question 1) If your account starts at 10k and you make a 0.5% profit on their account value at the beginning of the day, every day for 252 trading days, what is your account value at the end of the year? Question 2) Now, does 0.5% profit per day sound reasonable?
I am entertained by posters who claim they make millions per year trading the YM, a vehicle worth $5 per point. Such posters never back up their claims of riches with broker's statements. Why?
That's easy. 1) $0 because you blew up on trading day 190 and were forced to close your account. 2) Of course it sounds reasonable because: a) Your day job consists of selling crap trading software to fools. b) Your best friend's , brother knows a guy who's grandmother's hairstylist has a cousin who's a CPA and has a client whose tax returns prove it the past 20 consecutive years. What they forget to mention is the CPA in reality makes his bucks laundering drug money for select clients.
Q1. Assume you're talking dollars and 100 dollars are withdrawn per trading day to live off. Then you are bust well before the year is out. Q2. No. You need to do much better than that to make a living.