where the real money in trading is?

Discussion in 'Trading' started by watchdaride, Apr 28, 2007.

  1. Been trading for abour 4 years now part time . I dont have a big trading ac to make trading fulltime. But i think the only people that can survive off of trading fulltime and make a good living are people that are trading other people money . Its easy to make 5 or 10 % a month. So if you can get say about 200k in investments and make 10% a month that 20 k and i think the average fee is 25% of the profit that would give 5k profit . Not trading your own money is probably less stressfull . I guess one has to build up a couple years of a track record .
     
  2. :confused:

    If you can make 5-10% easily, I don't see how you'll have problems building your account to a point where you can trade on your own.

    As a matter of fact, how does one make 5-10% every month easily?
     
  3. Daytrading if you know what you're doing and are moving around less than a million.
     
  4. Not trading your own money is a lot more stressful, in my experience.
     
  5. I honestly don't mean to offend but this post shows an unusually high degree of misinformation. There are plenty of people who make their living trading for themselves, although all the ones I know have sufficient capital and are serious professionals. It is not "easy" to make 10% a month, not that it is impossible for a good trader with leverage but calling it easy is just inane. Taking profits from trading other's money requires far more than you can imagine judging by the numbers in your post.

    If you have been trading for 4 years then you could have taken $10k and made 7% per month (your 10% minus taxes) compounded for 48 months then you would now have $257k, so why would you need other's money?
     
  6. Not trading your own money was probably the biggest mistake I ever made.

    With your own money you answer to no one, if you lose it you're determined to get it back. You know you fucked up, you don't need other people telling you did.
     
  7. If you can make 5% per month "easily," let alone 10% that you mention, on a consistent basis, you'd achieve 60%+ per annum gains, and could become the most successful and prominent money manager on the scene today, surpassing the likes of Steve Cohen @ SAC Capital, who leads the way with after expense returns of approximately 38% per annum.

    People would be begging you to manage their money for them, and give you a flat 5%, plus 40% of any gains.
     
  8. You may wish to consider what the market is offering.

    That done, then you can go over to the compound interest ormula and take a look at how the parts of it work and just what is important.

    The initial capital is there.

    So is the profit per trade.

    The exponent is there too.

    A good way to define skill is how a trader does compared to what is offered.

    You are stating that relative to what the market offers you can make 5 to 10% a month. By any standard you are missing the boat.

    As far as what people will share with you in the profit department, you missed the boat too. You can look at what different funds give clients and see that apparently they are satisfied with that. The rest would be yours (the differnece between what the market offers and what your client will accept). Clients do not generally think of what the market offers because they cannot conceive, themselves, of making money with money.


    For trading stocks, you can look at holds of 3, 4, 5, or 6 to 8 days to get 1/2 of a nominal 20 % the market offers. That is 10%.

    the respective exponents are 80, 60, 50, 40 for the 3, 4, 5, and 6 day holds.

    A rough value for doubling when 10% is used is 7 or 8 trades.

    So, roughly, the number of doublings per year, respectively is 10, 7, 6, and 5 for the 3, 4, 5, and 6 day holds.

    Lets say you use EOD trading until you have a profit of 10,000 a month that you take out.

    Start with 10,000 and double it a few times to get to the the level where you do not have to work. The worst case for trading a million bucks is 17 months, roughly. The fastest route is around 9 months.

    Start with 1,000 and double it up over and over to a million dollars by trading EOD and having a job. 400 hundred trading days, roughly speaking.

    The rough easy way to think of growing money trading stocks and using what the market offers is to count 100 trading days as the time needed to get to ten times your original capital.

    People do not do these things simply because they do not look at what the market offers and make a plan to take it. that is just the way it is for most people.

    It is there to take but people do not have plans to do it.
     
  9. I guess he "knows" what he's doing in the market to make 5-10% return.

    Let's call him GOD.
     
  10. Most professional traders who trade their own money probably achieve percentage returns far above the best hedgefunds... only because for Stevie Cohen, buying 2,000 shares of a stock that trades 400,000 shares daily and and risking 50 cents to make 2 points isn't very useful. Any professional daytrader can take a few grand and deposit it with a prop firm and build it into a few hundred thousand dollars within a year; that's why percentage return comparisons between traders and fund managers are totally useless.
     
    #10     Apr 28, 2007