Capitalization and Trading for a Living

[rizwanuk]

This is a question for those who trade fulltime for a living.

How much trading capital you had when you switched from parttime trading to fulltime trading for a living.?

What type of trading it was, daytrading, swing or longterm and what were your favorate trading vehicles.

I know what worked for you may or may not work for others but it will be an interesting thing to know and read.

 

[FetteredChinos]

This is a question for those who trade fulltime for a living.

How much trading capital you had when you switched from parttime trading to fulltime trading for a living.?

What type of trading it was, daytrading, swing or longterm and what were your favorate trading vehicles.

I know what worked for you may or may not work for others but it will be an interesting thing to know and read.

i dont know about the others, but my favourite trading vehicles are either Tonka Trucks or Simon Snorkles...

i havent as yet made the transition to fulltime trading as yet. but then it wont be "fulltime" as i plan on trading EOD pretty much, and devoting the rest of my day to forging a professional golf career. hmm, just think of the trousers...

anyway, in terms of capital required, im aiming for about 20k+ before i can think of doing this fulltime with minimum risk..... hopefully a lot more.. will reassess this level in the summer, as i dont know about you, but i hate the 9-5 grind.

daytrading 9-5 seems too much like any other job. ie, pants..

hamster wheel anyone?

fc

 

[frugi]

People give wildly different responses to this question and there is a relevant thread here:

http://www.trade2win.com/boards/showthread.php?t=11195

I think it mainly depends on -

How much money you need to live on,
How much time are you prepared to put in, and, most importantly
How good you are.

A day trader at the peak of his/her powers could probably coax 20k+ pa out of a 5k account, no problem, but of course few will believe this. Likewise some might enjoy a safe 15% pa from a 134k account.

FC, daytrading 9-5 (or 2-9!) is an improvement over ordinary employment, at least as far as I'm concerned...

No office politics, no commuting, in charge of your own destiny, take breaks/holidays when you want, answer to no-one, intellectual challenge, moral satisfaction, infinite career development prospects, smaller tax burden, trade from virtually anywhere, erm, I'm sure there are more but I can't think of any

Drawbacks might include the isolation, the fact that payment depends directly and wholly on your performance (though some might see this as an advantage?), lack of health/pension benefits, perks etc.

It often resembles a hamster wheel, but at least it's my hamster wheel

 

[rizwanuk]

I think the discussion on this issue becomes complicated because its difficult to identify who is really trading for a living who is just giving an opinion. I think what we are looking for here are the opinions of the walkers of the walk.

What I am looking for is for people who are actually trading for a living themselves to come forward on the capitalization THEY needed to start trading for a living.

I dont want them to tell me how much I would need(This would complicate the things and discussion would loose focus as we all are different, we trade differently.

I hope we can get some good contributions to this thread because this is question which would interest many.

People give wildly different responses to this question and there is a relevant thread here:

http://www.trade2win.com/boards/showthread.php?t=11195

I think it mainly depends on -

How much money you need to live on,
How much time are you prepared to put in, and, most importantly
How good you are.

A day trader at the peak of his/her powers could probably coax 20k+ pa out of a 5k account, no problem, but of course few will believe this. Likewise some might enjoy a safe 15% pa from a 134k account.

FC, daytrading 9-5 (or 2-9!) is an improvement over ordinary employment, at least as far as I'm concerned...

No office politics, no commuting, in charge of your own destiny, take breaks/holidays when you want, answer to no-one, intellectual challenge, moral satisfaction, infinite career development prospects, smaller tax burden, trade from virtually anywhere, erm, I'm sure there are more but I can't think of any

Drawbacks might include the isolation, the fact that payment depends directly and wholly on your performance (though some might see this as an advantage?), lack of health/pension benefits, perks etc.

It often resembles a hamster wheel, but at least it's my hamster wheel

 

[ducati998]

Riz,
Just to give you an idea that is probably realistic I trade/invest a US $300K account.
I look to return 20% per annum or $60K.

My living expenses are minimal as we already own our home, and have one rental,also owned.
My wife continues to work, as do I.
The idea is not to use the returns to live on, but to re-invest and grow the pot larger over time.

cheers d998

 

[timsk]

frugi,
Just curious - you state "moral satisfaction" as one of the pluses of trading? I'm familiar with all your other reasons, but this is a new one on me and, to be honest, I'm not sure what you mean by it. Can you enlighten me, please?
rizwanuk,
Sorry for taking your thread 'off topic'.
Tim.

 

[techst]

Rizwanuk, challenging questions i would be suprised if you got a straight answer from our fellow members. As most of us are not full time, and still learning the lessons of trading. You'll note that many will discuss trading as if they were the second coming of Jesse Livermore, but many won't be a hundred miles close to his abilities (me included). And take into account the Legendary or Veteran Member doesn't mean Legendary/Veteran trader. Certainly be interesting to see how this one goes down.....

 

[TheBramble]

And take into account the Legendary or Veteran Member doesn't mean Legendary/Veteran trader.

Well, excuse me...

Neither does is necessarily not.

 

[techst]

See what i mean!

 

[FetteredChinos]

steady on chaps...

frugi.. i will only come and visit your hamster wheel if the PA's are half as foxy as our lot....


have you had any new ones installed recently? and why wasnt i part of the vetting process....

 

[frugi]

frugi,
Just curious - you state "moral satisfaction" as one of the pluses of trading? I'm familiar with all your other reasons, but this is a new one on me and, to be honest, I'm not sure what you mean by it. Can you enlighten me, please?
rizwanuk,
Sorry for taking your thread 'off topic'.

Timsk,

Perhaps my phrase is too grand and rather inaccurate. There is a purity and simplicity in trading that I like, in that it wastes only minuscule resources, has no unpleasant waste product or side-effects, exploits nobody and doesn't bring goods of dubious or negative qualities into the world, e.g as BAT or McDonalds might do. Traders are also essential to society in an economic sense (liquidity, allocation and hedging of risk). On a more personal level, one is paid strictly according to merit, for the quality of one's thought, learning and discipline. The simple ambition to be good at what one does can be measured in objective terms ($ won/lost) unlike, say, a fund manager who is not paid according to merit, or at least only very loosely. A personal moral philosophy that says "I want to do the best I can" can be tested easily by the trading results. There aren't many other jobs that allow this.

Sure there are countless more altruistic jobs or voluntary work available, but compared to many occupations, trading is a "good" to be engaged in with a clear conscience imho.

 

[rizwanuk]

Rizwanuk, challenging questions i would be suprised if you got a straight answer from our fellow members. As most of us are not full time, and still learning the lessons of trading. You'll note that many will discuss trading as if they were the second coming of Jesse Livermore, but many won't be a hundred miles close to his abilities (me included). And take into account the Legendary or Veteran Member doesn't mean Legendary/Veteran trader. Certainly be interesting to see how this one goes down.....

I hope we can get some focussed answers from those who are walking the walk. Its a very important issue which will be of interest to many who are deciding or will have to decide to go for it full time.

 

[TWI]

I have never had a float of more than 30k in my account, although I do get margin calls some mornings when I do not manage to get out of outright positions before the close. 30k gives me over 1000 spreads and 200 outrights which is fine for the exposure I need.
I know a lot of people who make a living with 20k.
Depends what your trading style is and what leverage you can get from the clearer.

 

[Airthrey Capital]

I have never had a float of more than 30k in my account, although I do get margin calls some mornings when I do not manage to get out of outright positions before the close. 30k gives me over 1000 spreads and 200 outrights which is fine for the exposure I need.
I know a lot of people who make a living with 20k.
Depends what your trading style is and what leverage you can get from the clearer.

twalker,

Am I right in saying that you can trade up to 200 contracts with only £30k margin?

I assume that this is based on day-trading only, and therefore wouldn't apply to say, FTSE futures, held for a longer period.

 

[TWI]

That's correct, if I hold overnight I will get a call in the morning if I have more than about 50 open. This only applies to STIRS also.
For FTSE I have limited myself to 10lots and rarely trade it these days.

 

[timsk]

Cheers frugi

Thanks for your reply. I've always felt some concern that trading is somehow rather self indulgent; hedonistic even. Now I feel more positive about it, thanks to you.
Cheers,
Tim.

 

[Mr. Charts]

rizwanuk,
You deserve a straight answer to a straight question.
I gave up my profession in 1999 to trade full time for a living with starting capital of £15,000.
I trade US shares intra-day and that gave me gearing of 4:1.
I had been trading part time for a while before changing career but had a cushion of six months' living expenses to support my wife and three children plus all the usual expenses, just in case.
If you are considering such a move make sure you are consistently profitable over at least a year in bull, bear and ranging markets with a mixture of long and short trades behind you. Also make sure you have earned 50% more money than you need to maintain your existing life style.
Then go for it, to borrow a phrase, "in twenty years you will regret more the things you didn't do, than the things you did".
For me, I have never looked back, never had the slightest regret and trade very happily for our living.
I hope that answers your very reasonable question.
Richard

 

[LevII]

Mr C,

A very interesting post. Hope you don't mind a few questions.

For how long did you trade part time before selling the chair and burrs and giving up the licence to drill?

Did you 'paper trade'? if so for how long and how did you ensure you did not cheat yourself?

At what stage did you say to yourself "OK, that's it, I now know I can make a good living from a couple of hours per day trading - sod the punters that's the last time I'm going to get high on hallitosis and/or BO?"

To make 50% more than the income of even a non-antipodean dentist from a starting capital of only £15,000 is a fantstic achievement. Well done! But what has been your longest and/or worst period of drawdown and how did you deal with it mentally?

How on earth did you persuade the wife & 3 sprogs?

LII

 

[techst]

Thanks Mr Charts, really enjoy hearing a success story from some one in the trade2 win community. It just shows you that it is possible and worth the hard work and study, although for me the work's not hard because i enjoy it so much.

 

[rizwanuk]

Thanks Mr Charts, your post is really a straight answer to my question, I think you were couragious, did you have any other savings besides GBP 15K for trading capital and six months expenses for your family.?

Thanks again

rizwanuk