How long does it take to become a successful consistant day trader?

[SOCRATES]

No one is asking you to disclose your capital base or indeed how much you are risking per trade, because in the line of questioning that I am pursuing with you as a consequence of your posts on this thread to immediately follow mine, that is not the objective. Your second sentence and your third sentence equally do not apply to this discussion, so you needn't worry about these. But I am very interested only in your "investment arithmetic" and how you would construct your reply to my question above, which I repeat:
If your exp[osure is so minimal in proportion to your capital base, how do you expect to build up a meaningful balance relative to that capital base, in the form of an adequate consistent return ?

 

[wasp]

I'm not sure what was difficult to understand about what I meant.

Although my exposure is minimal to my capital base, I am not trying to build up a meaningful balance relative to that capital base, because I already have adequate to earn what I require.

 

[pb]

But I am very interested only in your "investment arithmetic" and how you would construct your reply to my question above, which I repeat:
If your exp[osure is so minimal in proportion to your capital base, how do you expect to build up a meaningful balance relative to that capital base, in the form of an adequate consistent return ?

Perhaps the capital is pretty high, perhaps he is happy with the return he generates?

Duh?

 

[Trader333]

I ought to clarify what I consider exposure. For me when I place a trade (which is on US stocks) my expsoure is 100%. By that I mean that if a stock is trading at say $40 and my account balance is $50K then I trade 1250 shares (but usually rounded down so 1200). So my exposure is 1200 x $40 = $48K and this is in reality what my risk is on any given trade.

However, I will never let a trade take more of my capital than 0.5 of 1% of my account size so my maximum intended risk in the above example is 0.5 x 0.01 x 48000 = $240 per trade and this is the maximum because usually I am out before getting anywhere close to this figure.

The reason I asked the question is because most people do not understand what the true risk in any trade really is and I hope that this clarifies where I was coming from.


Paul

 

[SOCRATES]

Perhaps the capital is pretty high, perhaps he is happy with the return he generates?

Duh?

Please let him answer the question I put to him on his own.

 

[pb]

Please let him answer the question I put to him on his own.

He already has. Twice.

 

[SOCRATES]

I ought to clarify what I consider exposure. For me when I place a trade (which is on US stocks) my expsoure is 100%. By that I mean that if a stock is trading at say $40 and my account balance is $50K then I trade 1250 shares (but usually rounded down so 1200). So my exposure is 1200 x $40 = $48K and this is in reality what my risk is on any given trade.

However, I will never let a trade take more of my capital than 0.5 of 1% of my account size so my maximum intended risk in the above example is 0.5 x 0.01 x 48000 = $240 per trade and this is the maximum because usually I am out before getting anywhere close to this figure.

The reason I asked the question is because most people do not understand what the true risk in any trade really is and I hope that this clarifies where I was coming from.


Paul

Thank you for your reply, but I am not askling you, I am asking him, and I am interested in his responses at this minute, and no one elses however helpful the intent or otherwise.

 

[SOCRATES]

He already has. Twice.

He has not. If you have a deep understanding of this profession you will immediately recognise he has not

 

[wasp]

Paul,

Cheers for that, I see what you mean. I trade forex and I have a set amount for what I trade day in and day out but I ensure any loss will not exceed 2% of my capital.

Socrates,

I'm bored and have other things to do than explain the same answer in yet another way.

 

[donaldduke]

Yes, good. Now, if your exposure is so minimal in proportion to the capital base, how do you expect to build up a meaningful balance relative to that capital base, in the form of an adequate consistent return ?

Soc,

You state his exposure is minimal in proportion to his capital base, 2% is not
minimal exposure its quite agressive, 5 losers in a row and hes down 10% of the
account.

With 2% risk then you should be making 100% in a good year.

 

[pb]

He has not. If you have a deep understanding of this profession you will immediately recognise he has not

Did you not retire from T2W just a few days back? Now that you are back again, have you thought of starting your own private forum (leaving those without the 'deep understanding' alone)?

 

[cj12]

To chrisw


Dow Intraday Charts 13 Dec - 17 Dec
Views: 3,341 Posted By chrisw

Hi all,

Not the best time of year to be a bar manager and part time trader!
.........................................................................................................................................................................
23-04-2005, 05:12 PM The DOW in the evenings post #1

I trade forex all day and usually finish around 6pm (GMT) and have been considering trading the last couple of hours of the DOW to finish off the day!

I though you only traded 3 hours a day. You have come a long way in a few weeks???
I could see in you writing that you not for real. EGO

Sun

 

[wasp]

Wow,

12 poeple viewing on a Saturday night... we should all get out more!

 

[wasp]

Sun123,

Am I not allowed to change my mind and stragegy?

I finished working as a bar manger over the Christmas period.

As for the hours I work, if you keep looking through my revious posts you will see I have been putting in extra hours in order to take the summer off. (The DOW in the evenings thread)

 

[SOCRATES]

I'm not sure what was difficult to understand about what I meant.

Although my exposure is minimal to my capital base, I am not trying to build up a meaningful balance relative to that capital base, because I already have adequate to earn what I require.

I now understand what you mean. What you are doing is tinkering and playing about with trading, and not serious meaningful activity as you imply from your first post to follow mine.

I will now proceed to tell you why what you are doing is tinkering.

It is so because if you get it wrong, for example, you can easily put it right in the next trade by increasing your exposure if conditions are right and the move is in your favour seriously.

But in the meantime the great bulk of your capital lies dormant.

You cannot show a meaningful return on capital employed by dipping in small exposures like this.

You would need to get it right at least 19 times out of 20,and, if you were able to do this to this professional standard, you would not bother to expose only 2 % of your capital.

You would use your capital properly and fire off both barrels at appropriate opportunites, but before you can do this within the context of appropriate opportunities you have to have the ability to recognise them and to act upon them. This you are obviously not doing, therefore your strategy to me, in my view, as a consequence of my experience which is condiderable, does not appear in the least professional.

I am telling you this because you imply you have cracked all of this in 18 months.

It may be that you have been very lucky so far. I hope that your run of luck continues, and I wish you well with this, but a run of luck is a very different proposition to consistent proffessional result as a consequence of properly evolving as a trader, which can take a very long time indeed.

Kind Regards.

 

[SOCRATES]

Did you not retire from T2W just a few days back? Now that you are back again, have you thought of starting your own private forum (leaving those without the 'deep understanding' alone)?

I am back for one hour because I have some free time. I am not starting a private forum on any public website. I already have a forum of my own and admission is by invitattion only.

It is because a lot of nonsense is posted that serves to misdirect and misinform and misguide sincere people who are trying to progress that I intermittently post so that you can benefit.

But if you think you ought to be left to your own devices that of course is your prerogative, not mine. I tell you this because you chose to join in this question and answer session between chrisw and myself, even answering the question for him. I am sure he is a big lad and does not need you or anyone to speak for him.

I have engaged in this discussion to clarify what ought not be left unclarified, for the benefit of all members, both the experienced and knowledgeable and the inexperienced and uninformed.

That's it, you cannot complain I do not tell you everything.

 

[wasp]

At the end of the day, I am not trying to be a professional trader, I am not trying to get rich, and whether I am tinkering or playing about with trading is of no consequence to me.

If I have been lucky for the last few months then I'm in for a big fall, but due to my small exposure I have the capital to back it up.

I am doing this to earn money so as I don't require a 'job'. At the end of the month, as long as I have my bills paid and clothes on my back and I can afford to do the things that I enjoy, then I am happy.

 

[SOCRATES]

Soc,

You state his exposure is minimal in proportion to his capital base, 2% is not
minimal exposure its quite agressive, 5 losers in a row and hes down 10% of the
account.

With 2% risk then you should be making 100% in a good year.

He is not categorising the 2% exposure as a potential 2 % wipeout, as I understand it he is exposing 2% of his capital, which is a very different proposition indeed.

 

[SOCRATES]

At the end of the day, I am not trying to be a professional trader, I am not trying to get rich, and whether I am tinkering or playing about with trading is of no consequence to me.

If I have been lucky for the last few months then I'm in for a big fall, but due to my small exposure I have the capital to back it up.

I am doing this to earn money so as I don't require a 'job'. At the end of the month, as long as I have my bills paid and clothes on my back and I can afford to do the things that I enjoy, then I am happy.

That is marvellous and I am very pleased for you, but you must understand there is a difference between what is professional and what is amateur. They are not the same thing.

Kind Regards.

 

[wasp]

This is all well and good and I'm not claimimg to be on either side.

I am earning a comfortable living and that is why I trade. Plain and simple.