Making $150,000/ month trading US stocks.

[tradesmart]

TradePattern, thanks for a very informative article.

I particularly noted the information that the lady was eased into trading and learning her software tools very slowly, trading only small amounts of shares/money initially; and also had a ‘minder’ for many months before she was left on her own – certainly acknowledgement from people who know that disaster can quickly overtake novice traders if left to their own devices prematurely.

Food for thought for those of us who are seriously considering starting NASDAQ Level II trading on our own account!

The lady repeatedly extols the virtues of her employer’s proprietary Level II software.

Have any of you active Level II experts out there seen a comparative ‘roadtest’ of retail Level II software packages ie:- RealTick, Tradestation, E-Signal, CyberTrader etc etc and the US brokers that support them?

Any info would be much appreciated.

Thanks, TradeSmart!

 

[TraderPattern]

No problems! I would suggest to you that the young lady is no longer pulling in $10k a day. She is more likely to be pulling in $1k day for several reasons
1) she is a long only scalper, and the poorer fills got by waiting for an uptick to short will reduce overall profitability in a non-bull market, if she does decide to short
2) the move to decimalisation has reduced intraday follow-through
3) the lack of an internet bubble has reduced intraday follow-through
4) lower absolute prices have led to smaller absolute gains per trade

For someone, well-versed in Level 2, who is trading 1000-2000 shares, daily net profitability of $1k is more realistic than the $10k days of the internet bubble. And MANY more days these days have small gains and small losses (plus or minus a few hundred). Things are certainly tougher, but its still possible to make a living ($5k to $20k a month).

 

[dax]

TraderPattern,

Good points in your last post.

A lot of people were geniuses back then - courtesy of the greatest bull market in history. (I'm sure this lady was talented though)

It also ended...and a lot of people went broke. Times have changed. For example, most of the major trend followers are staring at huge losses. We are simply not in that type of environment currently.

BUT, good traders adapt to changing market conditions and can thrive in bull, bear and trading-range environments.

It's good to look at stories like this but new traders should examine the whole picture before getting too carried away. Look at historic data for implied volatility and compare it with today, or intraday ranges for liquid stocks.

 

[tradesmart]

Would be interested on Naz/Mr Charts comments on current earnings potential (or is it 'how long is a piece of string!' )

 

[Mr. Charts]

Oh no!
If you want to email me I'll tell you, but if I posted that sort of material openly on these t2w boards, I can just imagine the vitriol that would pour out! ;-)

[email protected]

 

[grubs50]

c'mon Mr charts we r all interested!!!

 

[JonnyT]

Don't be silly I'm sure you can do the sums yourself.

It all boils down to real simple stuff like how many shares you bought or sold and how many cents profit you made per share. Allow leverage of 4-1 and bobs your Uncle.

It is possible to make $150,000 per month but it wont be from a £2000 Spreadbet account...

For example I'm running a fully automated system that in testing has made a 20% return pcm risking 1% of equity per day. Two weeks live bug free trading and it's permforming just as the testing suggested. Long may it continue

JonnyT

 

[FTSE Beater]

For example I'm running a fully automated system that in testing has made a 20% return pcm risking 1% of equity per day. Two weeks live bug free trading and it's permforming just as the testing suggested. Long may it continue

JonnyT

Hi JonnyT

It's great to hear it's working out for you

 

[JonnyT]

Thanks FTSE.

After a few years I'll be able to fund Notts County like Chelsea.

Remember I told you

JonnyT

 

[FTSE Beater]

.......Yes, but at the time Chelsea were £80 million in debt :cheesy:

 

[ChartMan]

That's about how much it's cost JT to back test his algorithm.

 

[china white]

lads/lasses

may i comment on that foxy trader who makes 150 K a month putting on 250 trades daily? BY NO MEANS i am trying to slag her off or anything - just a general trading style comment. She's obviously a very bright and gifted individual.

Ok - let's see. 150 K bucks a month divided by roughly 20 sessions a month = 7 K a day.

I am assuming that her firm would give her enough capital to trade 10 big SP futures = 50 e minis = 2500 bucks/point.

which means to me that she makes less than 3 SP points per day. which is fine if it is achieved with consistency, its actually good trading - MY POINT IS THAT PUTTING ON 250 TRADES/DAY to make 3 points is clearly overtrading. U can do that with 2-3 trades a day.

just an observation. pls dont start accusing me of any nasty things ppl sometimes do. I am just not impressed with her Profit/Effort ratio.

 

[Trader333]

I believe that she trades Nasdaq stocks and from that perspective, as a scalper, she would not be overtrading.


Paul

 

[BBB]

Wow - thats around 1 trade per minute or there abouts.

She must be a member of the exchange at that rate, or the commissions would kill her.

If thats what she's doing, then I guess her process is fairly automated.

 

[china white]

Trader333 - with all due respect - with that financial backing - why wud u trade stocks hvng to put on 250 trades a day - when u can trade SP futures and trade 2-3 times a day to make the same at least?

and i was quite modest in my estimate - 10 big SP futures is roughly USD 3 mil notional limit. tell u what - when I joined DrKW my starting limit was GBP 5 mil = USD 8 mil = roughly 30 big SP futures. With her record, I am sure she's got 20 mil USD limit. So why wasting yr effort on 250 trades/day?

 

[BBB]

Personal risk tolerance maybe??

She looks like she's only in very liquid markets, and can take advantage of the electronic 'fair playing field' As the S&P is in the pit still, your orders are going to be lunch money for the locals unless you are working for the same firm as the broker.

I know where you're coming from though. It wouldn't suit me either - not when I could make the same cash in half a day and then go down the pub!

 

[TraderPattern]

Just so you are all aware, the young lady used to trade for Blackwood Trading in Manhattan, which has since ceased proprietary trading operations and is now a trading software producer.

Blackwood used to have a tie-up with TSFB and had purchased a pretty large and impressive trading floor in Gresham Street EC2 (very near St Pauls underground station). I had, several years ago, met the chap running the London operation, who had tried to get me to join as a proprietary trader in London. When I came in to check things out, the available traders seating of around 120 was about 15% full and to the best of my knowledge never got past that. The London end of things has since closed down.

Blackwood's style was hardcore Nasdaq Level 2 scalping, but after decimalisation they obviously had to make a switch to intraday technical trading. I had posted the follow-up article to the first article which should give you all some insight into how trading had changed for the young lady since decimalisation and intraday volatility contraction.

Please bear in mind that the kind of trading and kind of market environment that enabled above average scalpers to make $150k a month doing hyperactive intraday scalping has long since evaporated. To try and do that in the current decimalised environment without the kind of momentum follow-thru that we had in the internet bubble would be an exercise in futility.

Personally, I have changed my style completely. I now take a somewhat more relaxed longer term perspective!

 

[Trader333]

china white,

I was only reflecting the situation as I understood it to be and not making a judgement on whether trading futures was a better alternative or not. I also seem to remember that she was not comfortable with Shorting and was unable to make anything like the amount she had when the market was bullish. This is in addition to the comments made by TraderPattern that since decimilisation things have very much changed.


Paul

 

[china white]

Trader333 and TraderPattern,

very sharp remarks indeed! many thx. hope u understand that my whole point was ok its not worth burying yrself alive at the age of 23 trading - ok i am sorry we used to call it like a monkey on the floor - when u can make the same P&L thru other means. I sincerely hope the young lady realised that, got the best references from that firm and landed hersef a proper trading job somewhere else where she trades not more than 10 times/day.

I am sure some1 as smart as she is, she's done it long time ago. When I was 23 I was selling Duracell batteries on the phone cold calling any1 in the US who ever happened to get on Duracell's database rat race - yes - but a good chance to learn and move on,

 

[TraderPattern]

I sincerely hope the young lady realised that, got the best references from that firm and landed hersef a proper trading job somewhere else where she trades not more than 10 times/day.

Her brother was Head of Trading there (nice guy), so I am sure her references were fine!