Welcome to the Traders Laboratory.

Money Management Risk and money management related topics.

Reply
Old 03-31-2011, 10:24 AM   #9



Join Date: Apr 2010
Posts: 1,405
Ignore this user

Thanks: 204
Thanked 526 Times in 270 Posts

Re: Trading for a Living

There's probably a distinction that should be made about trading for a living.

There are countless multi-millionaires and even billionaires who feast in the markets at hedge funds, banks, brokers, etc... they are clearly trading for a Kings Living.

The distinction is can an above average individual successfully trade for a living over any length of time without the obvious advantages of a Wall St professional?

I still think the answer is yes but it does take an extraordinary commitment level since an individual trader does not have the advantages of a traditional professional.

MMS
__________________
Traders Laboratory is 100% Free due to our generous ad sponsors.
Be sure to support them - they support Traders Laboratory!

Featured Brokers include:
NinjaTrader

Featured Services:
INO Trading Course
MadMarketScientist is offline  
Reply With Quote
Old 03-31-2011, 11:17 AM   #10

TimRacette's Avatar

Join Date: Feb 2011
Location: Chicago, IL
Posts: 310
Ignore this user

Thanks: 14
Thanked 148 Times in 82 Posts

Re: Trading for a Living

It all comes down to size. A few of my colleauges own hedge funds downtown Chicago, some Alg some fundamental, two extremes. When you have 100M under management and bring in 20M in profits taking a 1% mgt fee and 30% profit split, thats a nice chunk of change. Compare that to your own trading account, what percentage would you have to make to bring in say 50k a year?
TimRacette is offline  
Reply With Quote
Old 03-31-2011, 11:42 AM   #11

Join Date: Jan 2009
Posts: 61
Ignore this user

Thanks: 21
Thanked 18 Times in 16 Posts

Re: Trading for a Living

I reacted on emotions of fear/anxiety to get out.
Attached Files
File Type: avi FCX.avi (2.79 MB, 58 views)
jaysmith124 is offline  
Reply With Quote
The Following User Says Thank You to jaysmith124 For This Useful Post:
$5DAW (03-31-2011)
Old 03-31-2011, 12:42 PM   #12

Join Date: Sep 2010
Posts: 65
Ignore this user

Thanks: 24
Thanked 27 Times in 19 Posts

Re: Trading for a Living

I have another angle on removing money from your trading account. If you're a new or struggling trader and you have a successful day and make even a small profit, take it! I don't care if your account is in negative territory, if you made even a few hundred dollars and feel really good about your efforts, take a hundred dollars out of your account. This is a tough business, and it's not about points or pips, it's about money. Traders can lose focus on that, and it all seems like just numbers on a screen. Taking even a hundred dollars out of your account after your first good day can provide lasting positive psychological/emotional support.

Many traders know how to put money in their accounts, but several have never attempted to take money out! Have a plan, for your hundred bucks. Buy something for your desk/office, something you can see, feel and touch everyday, this will be a reminder for years to come of your beginning efforts as a trader. Don't wait for your 10k account to be 15 or 20k (it may never happen) just take a token withdraw to put yourself through the motions and buy that tangible object (no meals/drinks) that you can always say, "This is my FIRST reward from investing my time, my effort and my skill trading the (ES, 6E or CL) market." This works. The big withdraws will come later.
$5DAW is offline  
Reply With Quote
Old 03-31-2011, 01:07 PM   #13

TimRacette's Avatar

Join Date: Feb 2011
Location: Chicago, IL
Posts: 310
Ignore this user

Thanks: 14
Thanked 148 Times in 82 Posts

Re: Trading for a Living

5Daw, part of that makes sense, taking the profits, but if someone's account balance is less than 10k I really don't see them trading it for a living. To make 40k in a year pretax you'd have to turn 400% profit or 800 ES points, thats an average of 15 points a week, and even if they used 2cts that'd be a hefty task. That being said I'm sure there's someone out there who will chime in saying they've done it, so it's by no means impossible. If you're making 60pts a month per contract every month you're doing well.
TimRacette is offline  
Reply With Quote
Old 04-01-2011, 08:13 AM   #14

Join Date: Sep 2010
Posts: 65
Ignore this user

Thanks: 24
Thanked 27 Times in 19 Posts

Re: Trading for a Living

Tim, I like the way you think, but we (traders) have to start somewhere. I'll bet there are more "lookers" here in the Trader's Lab with 10k accounts than 100k accounts. I started trading the Deutsche Mark on the CME with a 5k account (the times have changed)! I pulled some money out on occasion, whenever "I got lucky," and started buying generic 1oz silver rounds, for $6 or $7.00 ea. I've had a stack of them on my desk for many many years, as a reminder of why I'm sitting here, little did I know.
$5DAW is offline  
Reply With Quote
Old 04-01-2011, 09:21 AM   #15

TimRacette's Avatar

Join Date: Feb 2011
Location: Chicago, IL
Posts: 310
Ignore this user

Thanks: 14
Thanked 148 Times in 82 Posts

Re: Trading for a Living

5Daw, oh yeah you definitelly have to start somewhere, so I suppose pullin gmoney out of the account doesn't apply as much early on. Way to go!
TimRacette is offline  
Reply With Quote
Old 04-06-2011, 08:20 AM   #16

MightyMouse's Avatar

Join Date: Jan 2008
Location: The Lumber Yard
Posts: 2,333
Ignore this user

Thanks: 82
Thanked 599 Times in 444 Posts

Re: Trading for a Living

Quote:
Originally Posted by MadMarketScientist »
There's probably a distinction that should be made about trading for a living.

There are countless multi-millionaires and even billionaires who feast in the markets at hedge funds, banks, brokers, etc... they are clearly trading for a Kings Living.

The distinction is can an above average individual successfully trade for a living over any length of time without the obvious advantages of a Wall St professional?

I still think the answer is yes but it does take an extraordinary commitment level since an individual trader does not have the advantages of a traditional professional.

MMS
I have to disagree. The countless millionaires at the HFs banks, and brokerages, make money collecting fees, selling, and transacting business. The traders who do not trade with inside information or other illegal activity or soon to be illegal activity, such as the activity of hfts, have the same ups and downs that as any other trader who trades a similar time-frame as they do. The use of non public information is so common that it doesn't seem illegal anymore.

If you take Paul tudor jones, for example, he spends and has spent a great deal of time promoting himself and his business so that he could attract funds. He had some great early years, I suppose, and many many mediocre and losing years. If he had to rely on his trading, he would live in a duplex instead of a mansion on the water in Greenwich CT.

George soros is another great example. He too is a publicity seeking socialite who understands that he needs to attract money to his fund to make money. He has maybe done 10 great trades in his lifetime that made a great deal of money. His long run returns are good but not what you might think.

In either of these cases, you would be hard pressed to prove that they did better than the S&P did over the same period. The main difference is that if you traded the s&p during the same period, you didn't get 20% of the winning years like they did.

I am not suggesting that some of these guys do not not have good runs, but the good runs, at best, taper off in most cases. If you take a population of, say, 10,000 traders, 4-5 statistically will kick ass. Aspiring traders will look at those 4-5 traders in awe. The fact is that those 4-5 traders will tell you how great and smart they are, but one should realize that those 4-5 traders had to happen statistically. Wall St will throw all kinds of money at these 4-5 guys because its easy to bullshit a bullshitter.

The final table at the WSOP is a great example of statistics at work. In fact, a lot of times those remaining poker players are the most degenerate gamblers of the group.

Wall St is and will always be a center where people who need capital will get it from people who have capital. That is its main purpose.


MM
MightyMouse is offline  
Reply With Quote

Reply

Thread Tools
Display Modes Help Others By Rating This Thread
Help Others By Rating This Thread:

Similar Threads
Thread Thread Starter Forum Replies Last Post
Auto Trading with MultiCharts on Forex Market Yakalfer Automated Trading 4 11-25-2012 01:44 PM
Trading Firms Put Their Money on Poker Experts macdfx Trading and the Markets 10 11-16-2010 01:17 AM
Simple Forex Trading Strategies - The Key To Profitable Trading Nial Fuller Trading 3 10-26-2010 01:12 AM
The Truth of Trading daedalus Beginners Forum 100 07-28-2010 04:40 PM
Quotes from 100% Automated Independent Retail Trader AgeKay Automated Trading 28 07-06-2010 09:34 AM

All times are GMT -4. The time now is 05:16 PM.
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
CS to VB integration by DeskLancer
2006-2011 Traders Laboratory, All Rights Reserved.