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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?

  #331 (permalink)
Fortitudo et Honor
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We're arguing apples and oranges.

I give up. You are correct. There's no correlation in account size and propensity to succeed as a full time trader. Anyone with a $500 account can make a full time living by trading that account.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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  #332 (permalink)
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I think most people with a $5k account are not full time traders. I don't think they just quit their job and expect to make a living trading with a $5k account. I believe the great majority of those people, and the great majority of traders on futures.io (formerly BMT) are not full time traders and have another primary source of income. I believe the goal is to grow $5k into an account that can allow them to quit their job. I also believe you can become an excellent trader with an account of $0, and if you do that you should be able to start with a $5k account and be making a full time living trading not too long after that... You 'should', but the reality is, the majority do not hang around long enough to reach the proper stage before putting that $5k out there.

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  #333 (permalink)
Fortitudo et Honor
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monpere View Post
I think most people with a $5k account are not full time traders. I don't think they just quit their job and expect to make a living trading with a $5k account. I believe the great majority of those people, and the great majority of traders on futures.io (formerly BMT) are not full time traders and have another primary source of income. I believe the goal is to grow $5k into an account that can allow them to quit their job. I also believe you can become an excellent trader with an account of $0, and if you do that you should be able to start with a $5k account and be making a full time living trading not too long after that... You 'should', but the reality is, the majority do not hang around long enough to reach the proper stage before putting that $5k out there.

That's my point. The original title of this thread says "PRIMARY" source. Meaning how many traders are making money ONLY from trading.

I think there's a good deal of newbie retail investors out there that dabble with a small account and try to make it their primary source of income.

I think that a great many of them start off with wild expectations, which cause them to do things, take chances, lose patience, etc.

I'm not saying you can blame it on a small account, I'm not even saying having a large account would or would not have helped them, maybe they'd have blown through a large account too.

I'm simply saying that having a larger account, allows you to be satisified with a consistent and steady couple ticks/day strategy.

A couple ticks/day is not sufficient for a small account. So they seek larger gains and in the end, larger gains invariably means taking more risk and/or trading more often. You're either less selective or your chasing strategies that net more (but present more risk, more drawdown, etc).

The two largest commonalities among failing retail traders are A) lack of adequate starting capital and B) Failure to achieve a R/R ratio or a P/L ratio consistent with winning traders. If your strategy is able to achieve a P/L ratio of say 2:1 or better, chances are you're doing things right. NOT SAYING YOU CAN'T BE SUCCESSFUL OTHERWISE.

This board is getting ridiculous.

Someone comes out and makes a statement like "Playing the lottery is generally a sucker's bet and not a good investment" and then someone else comes running in claiming contrary, citing all the lottery winners as examples.

Most of what's said on the board are generalities and themes, not cold hard rules. There's always the exception to the rule in trading. But there's value in educating people as to the odds and probabilities as to what's successful and what is not.

If nothing else, it arms the trader with a greater sense that they should be wary if they're going to try to go against the grain and be the exception, rather than the norm.

If you're trying to trade a smallish account and make it your primary source of income (per the original thread subject) then my hat goes off to you, if you succeed, you're truly an outlier.

To all others, let that serve as wisdom, that if you decide to trade full time with a small account, you're going to have to be smarter than the next guy.

I don't know how else to frame the issue.

I agree with what zero is saying, that in the hands of the right trader, a small account can succeed. But that's the whole point "in the hands of the right/experienced" trader isn't always the case. It's rarely the case.

So MY point is that if you're starting out with a small account, don't add the additional pressure of trying to make your living off of it. Focus on winning and being profitable and grow your account to the point that you're comfortable enough to draw a living off it.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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  #334 (permalink)
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RM99 View Post

I agree with what zero is saying, that in the hands of the right trader, a small account can succeed. But that's the whole point "in the hands of the right/experienced" trader isn't always the case. It's rarely the case.

So MY point is that if you're starting out with a small account, don't add the additional pressure of trying to make your living off of it. Focus on winning and being profitable and grow your account to the point that you're comfortable enough to draw a living off it.

I can see both sides. What I would say though, is that how many traders who have that 30k account really benefit from those increased options? It seems to me that the vast majority of them simply blow that too, and when they're down to 4k from 30k, they don't change anything, they just carry on until it's gone.

In that way, undercapitalisation is a good thing, since blowing your account seems to be such a major prerequisite for people to get serious about their trading ;-)

Sure, in reality people will have more options, less pressure and maybe make different choices with a larger account, but I guess zero is saying those factors pale into insignificance compared to whether people really know what they're doing. A 5k account holds little fear for the trader who has seriously walk-forward tested their system and found a max drawdown of 1100k

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  #335 (permalink)
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Xeno View Post
I can see both sides. What I would say though, is that how many traders who have that 30k account really benefit from those increased options? It seems to me that the vast majority of them simply blow that too, and when they're down to 4k from 30k, they don't change anything, they just carry on until it's gone.

In that way, undercapitalisation is a good thing, since blowing your account seems to be such a major prerequisite for people to get serious about their trading ;-)

Sure, in reality people will have more options, less pressure and maybe make different choices with a larger account, but I guess zero is saying those factors pale into insignificance compared to whether people really know what they're doing. A 5k account holds little fear for the trader who has seriously walk-forward tested their system and found a max drawdown of 1100k

This is a pointless discussion. Nobody in their right mind is going to try to make a living from any business with $5k investment, with no other primary source of income, when their monthly expenses is $2500+. If you are working full time it is a moot point. If you have $100k savings it is still a moot point. If your wife is supporting you, it's a moot point. If you you don't need that $5k to survive, it is a moot point. If you are in the latter, you have the luxury of blowing six $5k accounts and then become profitable on the 7th. So technically, yes you can do it, but can you do it from the 1st $5k account coming in as a newbie? Probably not.

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  #336 (permalink)
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monpere View Post
This is a pointless discussion. Nobody in their right mind is going to try to make a living from any business with $5k investment, with no other primary source of income, when their monthly expenses is $2500+. If you are working full time it is a moot point. If you have $100k savings it is still a moot point. If your wife is supporting you, it's a moot point. If you you don't need that $5k to survive, it is a moot point. If you are in the latter, you have the luxury of blowing six $5k accounts and then become profitable on the 7th. So technically, yes you can do it, but can you do it from the 1st $5k account coming in as a newbie? Probably not.

I'm not sure anyone is saying you can make a living from the 5k straight off. Certainly not me.

And zerO originally said


Quoting 
$5,000 is easily enough funding to not only trade with successfully, but to build wealth from, for an advanced trader.

Build wealth. I think the point is this. Most people who want to make a living from trading, if they have a decent system and know its performance, could start with 5k and with other income support and compounding, could be making a living from trading without waiting years. A decent system could make an average of 3k pm with 1k max drawdown, trading 1 contract. 5k would happily cover margin and contingency. It really doesn't take long to get to 2 contracts and a reasonable monthly income.

But, the crux is, your system, and how well you do what you do.

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  #337 (permalink)
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I don't believe anyone said anything about trading with a $500 account.

Anyway, what an outstanding trading day. Amazing how much one can make with just 2 mini futures contracts. Anyone else catch any of this action today?


RM99 View Post
We're arguing apples and oranges.

I give up. You are correct. There's no correlation in account size and propensity to succeed as a full time trader. Anyone with a $500 account can make a full time living by trading that account.


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  #338 (permalink)
Logician
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Let's hug. I had too good a day to be angry. Did I say it was an outstanding day today? It was.


RM99 View Post
That's my point. The original title of this thread says "PRIMARY" source. Meaning how many traders are making money ONLY from trading.

I think there's a good deal of newbie retail investors out there that dabble with a small account and try to make it their primary source of income.

I think that a great many of them start off with wild expectations, which cause them to do things, take chances, lose patience, etc.

I'm not saying you can blame it on a small account, I'm not even saying having a large account would or would not have helped them, maybe they'd have blown through a large account too.

I'm simply saying that having a larger account, allows you to be satisified with a consistent and steady couple ticks/day strategy.

A couple ticks/day is not sufficient for a small account. So they seek larger gains and in the end, larger gains invariably means taking more risk and/or trading more often. You're either less selective or your chasing strategies that net more (but present more risk, more drawdown, etc).

The two largest commonalities among failing retail traders are A) lack of adequate starting capital and B) Failure to achieve a R/R ratio or a P/L ratio consistent with winning traders. If your strategy is able to achieve a P/L ratio of say 2:1 or better, chances are you're doing things right. NOT SAYING YOU CAN'T BE SUCCESSFUL OTHERWISE.

This board is getting ridiculous.

Someone comes out and makes a statement like "Playing the lottery is generally a sucker's bet and not a good investment" and then someone else comes running in claiming contrary, citing all the lottery winners as examples.

Most of what's said on the board are generalities and themes, not cold hard rules. There's always the exception to the rule in trading. But there's value in educating people as to the odds and probabilities as to what's successful and what is not.

If nothing else, it arms the trader with a greater sense that they should be wary if they're going to try to go against the grain and be the exception, rather than the norm.

If you're trying to trade a smallish account and make it your primary source of income (per the original thread subject) then my hat goes off to you, if you succeed, you're truly an outlier.

To all others, let that serve as wisdom, that if you decide to trade full time with a small account, you're going to have to be smarter than the next guy.

I don't know how else to frame the issue.

I agree with what zero is saying, that in the hands of the right trader, a small account can succeed. But that's the whole point "in the hands of the right/experienced" trader isn't always the case. It's rarely the case.

So MY point is that if you're starting out with a small account, don't add the additional pressure of trying to make your living off of it. Focus on winning and being profitable and grow your account to the point that you're comfortable enough to draw a living off it.


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  #339 (permalink)
Fortitudo et Honor
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zer0 View Post
Let's hug. I had too good a day to be angry. Did I say it was an outstanding day today? It was.

I'm not mad

I generally enjoy a debate and an exchange of differing viewpoints. That's what forums like these are all about. Yes, I had a good day. Today was a dream day in terms of market movement.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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  #340 (permalink)
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RM99 View Post
I'm not mad

I generally enjoy a debate and an exchange of differing viewpoints. That's what forums like these are all about. Yes, I had a good day. Today was a dream day in terms of market movement.

Yeah... too bad they happen once every 9 months. It was actually a dream week. I hope your strategies don't rely on these kind of days to be profitable

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