Reserves: How much do you require to feel comfortable trading?
This question is specifically aimed at others who are trading for a living, but obviously I'm open to all opinions.
I'm talking specifically about non-trading money. Seems to me as if having adequate capital reserves affords somebody more patience than somebody who lacks them. How much did you require yourself to have in order to feel comfortable in executing your trading plan?
Please don't take this the wrong way. Your question to me sounds similar to "how long does it take for you to become successful at trading." For everyone it's going to be a different number, for some it could be astronomical and for others not so much.
If you have a solid trading plan/strategy you should be able to execute regardless of the number in reserves.
Confidence is key to comfortably executing your plan. Happy Trading!
"Small disciplines repeated with consistency every day lead to great achievements gained slowly over time."
Last edited by teamtc247; December 17th, 2013 at 11:01 PM.
To answer your question nonetheless, for me it would be like 4x the capital required for your strategy.
So if you need $50k to trade properly let's say, then you'd better have $200k in the bank too... That's roughly my basic approach, assuming that with $50k of course you can generate and support all your financial needs.
Successful people will do what unsuccessful people won't or can't do!
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after basic necessities you also want to have enough money to treat yourself once or twice a week just to keep a level head otherwise you're going to feel like all work and no play makes jack a dull boy.