E48, the way I look at it, is, how much would you be happy to make each day so that you can have a nice comfortable lifestyle and enjoy most of your days doing things that you like. If you are not a dreamer, and have silly high notions, or one of the "keep up with the Jones's gang", then $500 per day should suffice. That means, for 2 hours work, which is all I am interested in during daylight hours, you will need to work out how many trades you will need to do to achieve this, your required capital, your max risk, your win/loss ratio. We will look at daytrading. As a starting point, capital is of course the most important, but lets say you have the $25k for pattern rule, plus another $5k buffer, so you have $30 k total - this is the very minimum and is going to limit you greatly to what stocks you can day. To keep things very simple, we will never risk anymore than $100 max per trade - 0.33% - with an average loss of $50 per trade, or 0.16%. This means, your average size trades for max loss will have to be the following..we always take worse case loss.. 100 shares @ $1.00 stop 200 @ 0.50 stop 300 @ 0.33 stop 400 @ 0.25 stop 500 @ 0.20 stop 1000 @ 0.10 stop This is fine, but what about stock price! Trading capital = 30k x 4 = $120k AAPL..last price..$110.78 100 shares = 11,780 500 shsres = 55,390 1000 shares = 110,780 So, we are fine to daytrade apple up to 1000 shares, but do you think you could trade a 0.10 stop on appl The more realistic stop is 0.25, and even at that you need to be very good, so that is 400 shares max. I don't have my adr spreadsheet up, but lets say aapl realistic tradeable adr is 0.50. Each trade is therefore 400 x 0.50 = $200 To make say $400 in 2 hours daytrading aapl, you will need to do have.. 2 winners..no losers 3 winners..1 loser 4 winners..2 losers 5 winners..3 losers Which is more realistic, and what can you do to keep your stress low and still go for your target of say $400 per day for aapl? J_S
J_S If only I'd known, when I started trading, that the right way is to bet very small. Like many other suckers, I fell for the allure of easy money and amassing a fortune. Oh well, you live and learn. Ed
It is never too late Ed, the old saying will always hold true..100 pennies make a pound Let the majority dream of fortunes and quick money, all I want is a peaceful life with no worries bout owing any person anything - the money is there for the taking if one but stops being a monkey and gets ones head out of ones arse It's a numbers game..pure and simple..no magic or mystery..and those who have lots of money control what happens..common sense really..which is really not that common for most! J_S
There's another saying, that I learned the hard way. Q) What's the easiest way to make a small fortune trading? A) Start with a big fortune!
How true! I am no different than most who try, only I was lucky I had made over 20K before I lost 17k in one day..that day changed my mind forever, and even though I still had some smaller losses after that, I learned what is required to make money and KEEP IT..for, it's just a total waste of time and effort if you can't keep it - better off to give the money to your kids and let them spend it J_S
What I also think is very important, is that those of us with a bit of experience behind us tend to forget what it was like when we started. My first "investment" was just before the 1987 crash, talk about timing..i was going to buy some land, but foolishly decided to put money in a managed fund, of all things - if I only knew then what I know now ! Result was my money was tied up for several years before I got it back, and what happened when I took it out Anyway, when I really started in bout 1999, I did not know what the spread was, and if I should hit the bid or ask to buy or sell..talk about a dumb idiot Then came the books, courses..and of course..the famous "online forums". It took years of endless hours and time wasting, to finally see it for what it really is..and when you look back and see how stupid you really were, it makes you kick yourself so hard for being such a fool. History is a great teacher, and helped me greatly to see what "society" is really all about..and..the rest is History Oh yes, my intro to History was purely accidental, as one of my daughter's took History in college and I had to do some research for her when she started, as she found first year difficult - she went on to da a masters and got it - so, most would never ever think of reading up on some History, but I can assure you, it can help you make money, as it can change your whole outlook on life, that is for sure! J_S
Hey ED What I am about to post - could be interpreted as 'hey look, you're wrong" I do not mean it that way at all I concern my self with being accurate - I give a shit about right..., or wrong - only accurate My first pass at the math was wrong - I did not account for adding in the profit from Dec.., back into the beginning amount for Dec - to derive the overall % increase of the initial capital They say a picture is worth a 1K words Please tell me what you think Sir Thx RN
You're almost right RN. 100 increasing to 1087.22 is actually a gain of 987.22%. This might illustrate. 100 to 200 is 100% gain 100 to 300 is 200% 100 to 400 is 300% etc Fact is, we're splitting hairs here. If you can grow your account by 1%/day then you're laughing all the way to the bank.
Well, I think so anyway, and am willing to risk some money to find out. Would prefer to see SPX take out 2020 today, but it didn't, so tomorrow it might move up and then pullback - but predicting what will actually happen is not possible, so you are either willing to take on the risk now, or you are not. I am still thinking they might drop it tomorrow, as the OI figures for SPY and SPX would tend to say it should move lower, but they are of course like all other "data" and do not guarantee anything. It is very easy see what you should have done in hindsight, not as easy pick the top or bottom for longer term trades as it is when daytrading - so I have bought 1 SPY Dec Put already, and may buy some more tomorrow or next week, have to see what happens? Either way I consider the money as gone when I put on the trade! J_S