Good afternoon to all, First, many thanks to all for bringing this old fart up to speed with what's going on in 2006. After seeing some old friends who run trading shops and going through some interviews, I'm convinced that the trading world indeed has changed. So much that I'm seriously comtemplating not going the prop equity firm route. So, if you had a 100k account in 2007, what would you do with it? For those who haven't seen my previous posts, I have traded for about 15 years mainly in equities, furtures and spot FX. Not much in the options world but wouldn't mind hearing from some options traders also. My annualized return objectives are somehwere around 25-40% for this trading account. This is my risk account, so I am open to suggestions. Many thanks to all and happy holidays.
Assuming you will play both long/short, you might consider the home builders-say the top 6 or 7. Trade 'em together as a basket sometimes. ... rj
old school - in my opinion, to get 25-40% on the $100k, you have a few ways to go, all of which you've traded before. You can take a portion of the $100k and trade futures and make the 25-40%. Let's take a look... > 25-40% on $100k is $25-$40,000. > $40k / 12 = $3400 per month on average, $850/wk, $170/day > $25k / 12 = $2100 per month on average, $525/wk, $105/day $170 per day is 'just' 1.7 ER2 points. $105 per day is 'just' 1.1 ER2 points. Now, since you've traded futures before, it should be pretty clear that averaging $2100-$3400 per month is very possible on a futures account. You could take a small portion of the $100k and use higher leverage OR you can keep the entire $100k and trade either the same amount of contracts or quite a bit more. I personally like to breakdown my goals to a per day basis as it's a little easier to bite off small chunks then trying to bite off a big chunk.
hate to be a glommer, but this soooo matches my goals/point of view that i just had to say something. i consider myself a newbie in futures, so i keep my goals low and easily attainable. my daily self-imposed quota is $100 for now. i plan to up this to $200/d in january, assuming continued success. friday i spent 25 minutes trading 1-2 contracts at a time of er2 and made $250. today i spent 10 minutes trading 1 contract at a time of er2 and made $135 (both figures are after fees/commissions/slippage). i've been trading the er2 for a month or so after a month or so of paper trading and dabbling in es. i like er2 much better for the quicker action, more money per point and per tick. i will probably never be a person who trades 10, 20, or more contracts at a time, but i could conceive of a time when i might trade up to 5 contracts at a time. i would have to be very good at it with a very high, very consistent win rate before i would do this. at that point my daily quota would be higher, b/c if i didn't up the daily take, no reason to take extra risk on higher number of contracts. if i could eventually do $500/day, that would be over $100k/yr, a nice take on futures and it's also nice that futures trading has the favorable tax treatment. i would be very happy with this take on a trading account, doing something that i consider fun and enjoyable anyway. i also like the fact that you can make money this way whether the market is up or down. one drawback of trading this way (not a drawback to me but perhaps to some) is the level of concentration required to do this with consistency, especially if trading intraday. overall, if you want to make $25k-$40k/yr on the $100k trading account, i would do it with futures and take away anything over $100k at the end of the year (i.e. sweep to a separate account).
Withdraw it before anybody realizes they made a mistake. (And be sure to look me up in the Caribbeans if you're in the neighborhood.)
Just out of curiosity, what changes that you see have made you not want to go the prop equity firm route?
Me, personally. I would go away on a vacation right now and come back in June when the dust settles. Look for deals and start buying. Some others would probably prefer to short the market...
Just browse some of the threads on ET about changes in the equities market. Hybrids, most exchanges going electronic, no more floor, no more flow info, auto trading systems, blah blah blah... I don't have the stamina to fight with the youth of today in the digital age. Back in the day, it was a bit different. I sat for a morning at one of my friend's firms (prop equity) just to see first hand what it's like in 2006. I saw a buncha computers trading the mkts. Automated bid/ask scalping programs following the mkt up and down. It was like looking at a graphic equalizer for an audio system. Black boxes were really picking up steam back in the day. Now it seems you could buy one for $11.99. There are websites where they list systems and people subscribe to these systems. wtf? I see traders using the latest in front ends, charting... Young, hungry (starving?), knows how to program, sharp people. I can't compete with that high tech shit. I need a different edge. Anyway, the days of trading like I used to are over. It was a different game. I need to learn some of the new ones. some things I found interesting in my recent limited research: IB's universal account Buttontrader - wondering if anyone uses it to scalp s&p's or any other highly liquid mkts. Perhaps in today's digital mkts it's about fading the most subscribed to ATS? Or figure out how to ant thanks for the replies