How Much Do You Make?

[jls483]

Okay here are the rules.

1. You can only submit to this thread if you reveal your own earning prediction.

2. You are given £100k to invest

3. You need to tell us how much you think you will earn over the next year. Or put another way how much you would have earned if you had been given a £100k a year ago and you can add a little bit for gained experince - but don't get carried away.

4.Please tell us what sort of trading you will use to achieve this and which company you will use.

5. Give your predictions for a number of percentiles (e.g. P50 is the expected earning P25 is the bad case and P75 is a good case, P1 is the worst possible case and P99 is the very best)

6. Not sure if this is allowed - but you recommend the post so that we get as many entries as possible . If this is not allowed - don't do it!

To start the ball rowling - I'll go first.

I would use a spreadbet account with deal4free and would trade the FTSE 100 rolling cash. I would deal in tiny amounts and never sell at a loss.

P1: -10% P25: 10% P50: 50% P75: 60% P99: 75%

 

[rossored]

To quote:

"I would use a spreadbet account with deal4free and would trade the FTSE 100 rolling cash. I would deal in tiny amounts and never sell at a loss "

Can you guarantee this last bit? If so please tell me how so I can do it too!!

 

[jls483]

Rossored,

You have not read the rules! You can only ask questions if you have given your prediction! When you've done that I'll explain the not selling at a loss remark

I should also make clear that the reason I am asking is not for individuals to "show off". I'm sure like me, most of us would rather keep our returns quiet!

The reason I am asking is that I would find it very useful to know the sort of trading that people do. What sort of returns they can expect and how risky it is.

We can then use this information to decide what sort of trading might be worth finding out more about (what we choose could be different for everyone).

So if you would also find this information useful - please post. I did. To be interesting we need a good cross section so don't decide not if you have made a loss!

Thanks,

John.

 

[Henry]

From the Thought for the day thread :

An amateur thinks about how much he can make.
A professional thinks about how much he can lose.

Just because someone posts on here that they can make a huge amount trading one way, and someone else says they lose loads trading another way, doesn't mean anyone else will have a similar experience with either method. Find something that works for you . . .

H.

 

[jls483]

Henry,

Like most people on these boards I just want to learn. I know very little about day trading and all I would like to know is what sort of things people do, how riskier they are and very roughly what they would expect to make.

I'm not looking for a short cut, a free ride or money for nothing. I will not just take up the method of day trading that somebody claims gives the best returns. It will all go in the mixer with a very large pinch of salt and I will have a better understanding of what is out there.

For example, what I do know is that bank accounts are 100% safe and you might get something like 4%. Bonds are a more volatile and normally return a little more. Shares are even more volatile, but over the past century they have returned something like 12% (don't quote me). Day trading is ...

You say find something that works for me. This is what I am trying to do.

John.

 

[rossored]

Okay, well I wont answer your question directly but this is what I do:

I trade spreads on a mostly-daily basis with IG Index, on the FTSE, Dow and occasionally Dax. I always run a stop-loss, typically 30 points on the FTSE/Dax and probably 50 on the Dow, otherwise you're on a hiding to nothing.

I normally gamble (lets face it, thats basically what it is) about 25% of my dealing account per trade:some of you might not say thats not very clever but...

...I win on between 80% and 90% of trades and before anyone else posts another reply, no, thats not BS.

I'm not going to say what I earn from it - obviously not millions - but it does me just fine and at the moment and beats working for a living.

But you do have to find your own groove and no doubt you'll do that - as Henry says, what floats my boat might sink yours. And I would whole-heartidly recommend paper trading your chosen market for some time before you invest, if you havent done so already.

 

[Henry]

Well the simple answer is that day trading can return 1000% a day or more. Or you might lose all your cash in 10 minutes. Or anything inbetween.

I understand where you are coming from, but personally I don't think asking people how much they expect to make is the best way to find out "what is out there". A better place to start would be to look at some of the more recent posts on FBs "The Basics Of Trading" thread, and the questions that TBS has put up; going through those will give you a much better idea of which area to direct your studies in.

I don't mean to sound rude, but I suspect you wont get a huge amount of people posting their results on here, because apart from anything else this is a question that gets asked time and again on these boards, as you can see if you search through the various topics. No doubt I'll be proved wrong as usual as a flood of people post right after me

H.

 

[jls483]

okay rossored. Thanks for telling us the sort of trading that you do. I get the impression that at least 50% of t2w members are day traders like yourself following whatever scheme they have developed and range from beginners losing lots to hardened professionals making crazy money and giving courses to whoever they can persuade to come along.

I myself am a bit of an oddball (t2w wise). Although I trade many times a day, I trade spreadbets as if they were shares. In other words when I take out a spreadbet I imagine I am buying the share and I make sure I have enough capital to cover any falls. I trade the FTSE so I cover any falls to about 3000 (and get the personal loan application ready if it goes further). I then keep the contract until the FTSE rises to whatever I bought at plus a little bit and then sell it at a profit.

This does means that I might hold a share for ten minutes, ten hours, ten days or ten years. This also means that over the short term I can lose lots of money, but the FTSE always bounces back eventually and all the time I taking little profits which with the current volatility soon add up.

John.

 

[jls483]

Henry,

No I think you are right I could have worded my question much better.

I also agree day trading does have a huge range of possible returns over one day. But, the long term returns must be slightly more predictable and it would be interesting to have a sample of what people expect to achieve.

Personally I'm more interested to know about swing traders and position traders and all the other types and how their risk and return profiles compare to day trading.

We'll ll see how the thread goes and if it flops badly I'll try something else next week.

Cheers,

John.

 

[Dr Mike]

the contract until the FTSE rises to whatever I bought at plus a little bit and then sell it at a profit.

This does means that I might hold a share for ten minutes, ten hours, ten days or ten years. This also means that over the short term I can lose lots of money, but the FTSE always bounces back eventually and all the time I taking little profits which with the current volatility soon add up.

John.

I'm intrigued, could you let me into the secret of how you have avoided "buying" any shares that have fallen beyond all hope of recovery within a reasonable time span, if ever - Marconi, C+W, RSA, Energis, Corus etc, etc, etc.

When the Dow crashed in 1929, it did not get back to it's pre-crash level until 1944. And many of the companies that made up the DOW in 29 were no longer there in 44.

I wish you good luck with your plan - I fear that you will need it.

 

[jls483]

Mike,

This thread was not meant to be about me!

I only trade the FTSE100. And I assume it will not go below 3000. If it does I just need to find more cash. I don't have huge amounts of capital invested so if it did crash I wouldn't need to raise much more.

I starting doing this when the FTSE was about 4000, so I'm fairly confident that most of the contracts I buy will one day come into profit. Even if they don't I will still daily be buying and selling ones at 3900, 3800, 3700 or whatever. I would not have used the scheme if the FTSE was at 6950 and I had to cover falls of 4000.

It would be possible to do what I do with individual shares. The volatility would be much higher, but the risks would be greater.
One day I will look into it.

John

 

[oatman]

You should have a job in the City....they never sell either.
I hope you're young enough to carry this strategy through!

 

[wysinawyg]

John,

I myself am a bit of an oddball (t2w wise). Although I trade many times a day, I trade spreadbets as if they were shares. In other words when I take out a spreadbet I imagine I am buying the share and I make sure I have enough capital to cover any falls. I trade the FTSE so I cover any falls to about 3000 (and get the personal loan application ready if it goes further). I then keep the contract until the FTSE rises to whatever I bought at plus a little bit and then sell it at a profit.

And you see this is why your thread is a bit of a waste of time and is really asking the wrong/a pointless question. Given the system you've set out I would say that your "system" amounts to much the same as the old thing of doubling up every time you lose on roulette. As such I'd rate your lowest percentile at making you bankrupt and your twenty fifth percentile at something like -100%.

You clearly don't think that (and I'd suggest you really re-evaluate it because it is by no means impossible that the FTSE spend another 5 years going down, look at Nikkei recently Dow and FTSE through the great depression etc.) and that's the problem with this thread. Without a real idea of the persons system you have no idea at all if the figures they come up with are a load of rubbish (although to be honest anyone with the phrase "I never sell at a loss" is going to be setting off alarm bells with anyone who knows a little about trading).

I know you said you didn't want it to be about you etc. but it really looks as if for your sake it should be. Henry's comment about thinking how much you could lose seems to really hit the nail on the head here.

wysi

 

[jls483]

wysi,

I'm quite happy to admit that my initial question was not the best angle for getting the responses that I'm looking for. I've already said that.

I'm also quite happy for you to think my "system" is doomed to failure. In fact there is a small smug sense of satisfaction to be doing so well and thought a bit of an idiot. Only time will tell how grounded this opinion is.

I agree completely that you cannot fully evaluate something without knowing the full system. But I'm not looking to copy somebodies system I'm just looking for a rough overview of the daytrading world, so that I can take the next step forward.

I'm asking whats it like to be a doctor - I'm not asking for medical training. What are the risks and rewards of being a teacher not the class notes for a PGCE.

John.

 

[julesrules]

i would say a new investor with some knowledge of the markets could easily make 5% on 100k that is 5k.

 

[TraderPattern]

What a pathetic thread.

 

[Skimbleshanks]

For example, what I do know is that bank accounts are 100% safe

You obviously don't remember BCCI.

I get the impression that at least 50% of t2w members are day traders

I would be very surprised indeed if there were anything like this number.

I think you'll find that the daytraders perhaps a) have more experience b) are more aware of the pitfalls of trading c) have benefitted from learning from others, and therefore are prepared to give some back, and d) have more time on their hands. Therefore they post more than others - and this gives the false impression that day traders are the majority here.

You are making the mistake of asking far too many questions in your original post. A single question is always more likely to get a response than lots of questions.

 

[jls483]

What I have found out is that there a lot of pedants out there! Ok cash is not a 100% secure, but if I added in every required caveat the point would soon be lost.

Interested to hear that you think daytraders have more time on their hands than swing traders, pair traders or position traders - now maybe that would make an interesting thread!

John.

 

[sidinuk]

I only trade the FTSE100. And I assume it will not go below 3000

All I can say from experience is: Assumption is the Mother of All F**k Ups!

(excuse the language!)

 

[jls483]

ok assume is the wrong word. I base my trading levels on the assumption the FTSE does not go below 3000, but if it does I just cash in a few premium bonds etc until it comes back again.

You have to remember that I am not trading in the amounts that a traditional day trader would. I am working in a very different arena and different rules apply. The reason it pays off (in the current market conditions) is that the volatility is high, the FTSE is histroically low and I never make any "losses".

I'm predicting your response now - what happens if the FTSE goes down and never comes back. To which I would respond:

Fine, this may happen, but it is not going to stay flat. It will still be volatile and I will still be able to make profits. It just means that I will not hit profits for two years rather than two months. I don't think this will happen, but I'm happy to take the chance that it will. I am young and I have plenty of time to wait for my profits.

It is a system that works for my risk profile, my time horizon and the amount of time I'm prepared to sit watching the market.