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Primary source of income: how many have made it?
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Primary source of income: how many have made it?

  #131 (permalink)
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The theory is very nice about compounding (Einstein also liked it) but I saw a theory here that the psychologic maximum level is 40 cars per trade.

40 cars per trade on most futures is ALOT. Even for the CL and the FDAX for example.

I know nobody daytrading in and out markets trading 40 cars per trade.

Big traders (institutions) trade mostly over the counter/swaps, HUGE amounts of money per deal, they don't like the public traded market at all. Most of them stay away from it.

You could trade easely large amounts on the FOREX though, on the major pairs.

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  #132 (permalink)
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Private Banker View Post
Also, there are limitations to how many contracts one can trade relative to the market they are in. You can't just dump 100 cars on TF and expect to get a consistent fill. As your trade size grows, you have to fine tune how you enter and exit into positions relative to the market you are trading, which is another topic in itself.

It really depends on your method. I'm not a micro scalper as alot of people seem to be. Slippage is much more of a concern for small reward/risk trades - such as scalp trades. I set out from the beginning to learn to trade more profitable setups (3 to 1 reward/risk). I can trade many multiples of what I do now and the slippage would be minimal.



MetalTrade View Post
The theory is very nice about compounding (Einstein also liked it) but I saw a theory here that the psychologic maximum level is 40 cars per trade.
40 cars per trade on most futures is ALOT. Even for the CL and the FDAX for example.
I know nobody daytrading in and out markets trading 40 cars per trade.
Big traders (institutions) trade mostly over the counter/swaps, HUGE amounts of money per deal, they don't like the public traded market at all. Most of them stay away from it.
You could trade easely large amounts on the FOREX though, on the major pairs.

I'm sure someone has a theory but I know it's not true. If you believe it though, it will become reality for you.
I guess it's all in the eye of the beholder: 40 cars ISN'T alot in most markets. But as I said above, if you are a scalper, it's a different story regarding slippage and therefore your ability to execute your system to desired results.

I've traded for both a brokerage and a few funds. Institutions do use futures as well as swaps (and OTC options) - but it depends on the purpose. If you're looking to hedge or take any view in the shorter term, futures are a great product. You get the best price and it's a transparent market. Swaps offer better liquidity at a longer date but you pay the broker a healthy margin. But should you need to get out early, you'll take another hit as there won't be a market for you.

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  #133 (permalink)
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No
No
About 1-2 hours for the first couple of years and 3-5 hours in the last 2-3 years. (damn that's a lot time)

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  #134 (permalink)
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1. NO
2. NO
3. Not found that yet

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  #135 (permalink)
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the odds are the odds

Even in "successful" trading rooms , 95% lose.. Those of u have revisited trading rooms maybe years apart: there are always a new group pigeons..
oh yes there is always so and so isn't in the room anymore and here is why...

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  #136 (permalink)
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MetalTrade View Post
The theory is very nice about compounding (Einstein also liked it) but I saw a theory here that the psychologic maximum level is 40 cars per trade.

40 cars per trade on most futures is ALOT. Even for the CL and the FDAX for example.

I know nobody daytrading in and out markets trading 40 cars per trade.
...

40 seems like a right number
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  #137 (permalink)
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95% lose and 100% of those who claim they made it are liars.

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  #138 (permalink)
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cory View Post
40 seems like a right number

20 points in 2 hours is pretty nice move.

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  #139 (permalink)
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1. Yes
2. Not yet
3. About 3000 hours. But in the early days most of that was probably just nervous tick-watching as price went against me.

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  #140 (permalink)
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1. No, I don't think it'll ever be. My ideal income will be diversified across other asset e.g. property. Every trader has drawdown. If someone tell you he doesn't has any drawdown, don't walk away, RUN! Because the chance is that guy know nothing about trading. Making primary income from trading meaning you are living with this drawdown. You could perform diversification in trading by:
* Trading different instrument (Stock, Future, Forex) OR
* Trading different strategy under same instrument
and pray there's no correlation problem between those. But, thesedays, "true diversification" is just theorical. You better off do something completely different to minimize correlation effect (say business or property). Every great traders do this. They open hedge fund get salary from it (essentially business), some of them make trading course, etc etc.

2. Not yet. But it'll exceed that "according to the plan" within 2 years or more.

3. As I say, trading never be my "primary income", it'll however become "one of my major income" if you like to put it that way. To make $100k / year, I have "on average" 100% growth per year (with 10% stdev) trading system + 50k account size + full time job (roughly will produce +$3k / month to my account size).

Assuming my system will be underperformed, so: 100% - 3 * stdev = 70% / year.
A simple mathematical equation below can be used to calculated what's the expected time i'll reach at least $100k / year income from trading.

$100k < (50k * (((1 + 70%) ^ x) - 1)) + 3k * ((((1 + 70%) ^ (x-1/12)) - 1) + (((1 + 70%) ^ (x-2/12)) - 1) + (((1 + 70%) ^ (x-3/12)) - 1) + ... + (((1 + 70%) ^ (x - x)) - 1))
(This can be simplified as follow)
100k < 1.7 ^ x (50k) - 50k + 3k * Sum(i = 1, 12 * x, 1.7 ^ (x - i / 12)) - 36k * x
where
x = the number of years needed to satisfy the equation

Equation: income = 1.7 ^ x (50k) - 50k + 3k * Sum(i = 1, 12 * x, 1.7 ^ (x - i / 12)) - 36k * x
Plotting the following equation above will give us:
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Therefore, we could see the boundary solution from the picture above. Hence,

x = 1.6 years (roughly)

We now have the approximation in years, in order to answer your question, I have to convert to the number of business days and multiple it to the time that I spent everyday on screen.

Nowadays, I only spent about less than 5 minutes / day. (YES, no more than 5 minutes / day).

so final answer is:

business_days = 52 * 5 = 260 days / year
hours_on_screen_per_day = 5 / 60 = 0.083333 hour / day

hours_on_screen = 1.6 years * 260 days * 0.083333 hour/day = 34.666 hours (When my trading automation is perfect, I don't even need to see the screen everyday. So, I overestimate the number of hours.)

It just seems that the number is soo small compared to 90% of people here. But that's sensible answer don't you think?

You might think I'm a complete nerd! ABSOLUTELY!!! But the message that I'm trying to convey is, trading is all about the "PLAN". Get your trading plan right first, and you'll be just fine. Many people try to shoot to the moon without knowing how they gonna achieve that. In the process, most of them will think, that is impossible.

But if you start doing little by little, without you realising, you'll be there in a blink of eye. One chinese philosopher - Lao tze - once said "Journey of thousand miles away begin with the first step". In above calculation, if I start thinking how do I gonna calculate the precise time for me to get $100k / year from trading, I will be overwhelmed and NEVER finish it. But I did everything little by little, and I finished it, I bet 80% of you will just give up when faced with problem above. Am I spot on?

"Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment." - Buddha
* Do not dwell over past => Forget all the mistake you have made(e.g. if you have blown up several account). It's always a waste of time to think "I wish I didn't do that". Well done! if you blew up your past accounts because the truth is you learned much much more than other people who "never" makes mistake. It happens to me, so I know it. The key is "NEVER GIVE UP".
* Do not dream of the future => Do not procrastinate. Procrastinate will not get you anywhere.
* Concentrate the mind on the present moment => Just put everything what you got to complete the task in front of you. Get rid of them one by one, proceed to the next one and never look back.

Again, my 2 cents.

Edit: Nvm reverted.


Last edited by felixtjung; November 30th, 2010 at 06:41 PM.
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