Sounds to me like you are looking for a quick fix. If I were you, I would toss my millions into managed futures (you can put your money with some of the best in the business if you have $1 million or more), real estate (damn you haven't thought of this yet?), and/or start a damn bank and take it to the beach, golf course, etc. Then, if I were really seriously trying to become a trader, or was just bored because all of my money was already working for me and giving me the life of ease, I would take $100k and split it up - $25k in 4 accounts and trade futures intraday with 1-2 contracts, revolving the accounts to try different methods that suit me. Trade account 1 for 6 months using method #1, then trade account 2 for 6 months using method #2, and so on...I would do this to protect myself from blowing up one or two - a pretty high probability for anyone starting out.
... with 1-2 contracts!
Then, after a couple of years of trading every day and seeing if I could cut the mustard, I would consolidate my accounts and trade 5-10 contracts per day with an avg account size of around $150-$200,000 USD.
If I got my butt handed to me and blew up all 4 mini accounts I would say hell with it and, once again, take it back to living the easy life off my money which was working for me prior to all this BS. Trading is work man. Good luck.
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I've seen some intersting systems on this site, but have not tried any. I downoded the "Wizard" system but to date have not run it. I spent a lot of time backtesting, and learned a lot, but until they make a computer that can allow a mountain bike to guide itself through singletrack, my opinion is it is better to be human. Too many variables, the markets are alive.
If you take the time to learn to trade, you could average $3,000 to $5,000 per day trading roughly 10 contracts, which depending on your personal risk comfort, could be done with an account minimum of $100,000.00. Iti is possible, and there are people who do it.
Flip side, don't take the time to learn, and you can lose that much or more. If you are new to trading, the first thing I would suggest focusing on is market structure, and ignore the indicators until you can read that. If you become serious, plan on a minimum of 1 year before you think you know what you are doing, and 2-5 years before you actually do.
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The best way to lose a lot of money is to trade a 'system' with a large amount.
The challenge you will have with futures is the size, so it will have to be a swing trading system most likely.
In your first post you mentioned an average of 20K per month = 240K 4.8% per annum
Then in a later post, you mentioned high 100K's. Or, 15%+-
Big difference between the two.
A friend of mine said, never 'deworsify' and always stick with your expertise of knowledge. What kind of business did you make this in the first place etc..
Like someone mentioned, I would buy a larger stable asset that cashflows reasonably well with development potential (Real Estate) as now is the PERFECT TIME to buy that asset in my opinion. Here in Hawaii a 15%-50% return is not difficult for development projects, but for stable cashflow producing assets you are closer to 5% to 7% but with high barriers to entry etc..
I would sit all cash and watch what unfolds the next couple months. I think you will find some great buys and if you want to buy some assets (REAL ESTATE) and lack experience, then PM me and I can point you in some directions.
I did an automated system that 'showed' stable profits for 2 years with an account of about 100K+ and I quickly lost 15K my first 2 weeks and pulled the plug. All about timing I guess.
Good luck on your journey, but if you want 5%, then I suggest BONDS, if you want 15% then I suggest private mortgages, or owning the asset. You can do a lot of damage with 5M in today's marketplace.
Anyone with a real edge is most likely not going to give or even sell it to you. Who would want a multi million dollar trader coming in and crowding their edge? Enough size might even diminish the edge all together.
There are many out there who will sell you a system. The ones who light up with glee ready to sell you a system are just out to take your money. Often the edge they say they have is not based on reality.
What you are asking is possible but not without risk. Better to learn from ground up trading techniques and money management as others have mentioned. Then you can develop your own system. 5 million does not insulate from big losses. Just means you can take on more size which means you can lose more relative to your account size. If you are going to manage it yourself then need to know everything about the plane. You would not just want buy a plane from someone just because they tell you it can fly. You want to become proficient at flying and know enough mechanically to keep yourself out of trouble. Same with trading.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Last edited by liquidcci; September 10th, 2011 at 04:37 PM.
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I believe you could make 3 - 5 k per day trading futures with that type of stake. I have been trading for over three years fulltime and experience has taught me plenty. If you are unfamilar with trading futures, being able to enjoy that type of return in the beginning would either require amazing luck, a trustworthy mentor and an unbridled desire to succeed...aka passion. While I don't think its possible right away...professional traders do it. It would just take a lot of time to feel comfortable trading larger amounts. It has been a long road for me to become profitable and consistently taking money out of the market, but you are well capitalized and are probably a lot smarter than me.
You will never need to have that type of money in a trading account, but to have a capital account that large would increase your ability to buy larger contract amounts once you felt comfortable trading with real capital.
My rule of thumb are no bad beats...meaning no more than 2% potential loss on any one trade based on my capital account. That is my liquid capital that I can afford to lose. My trading accounts have less in them as daytrade margins make futures the greatest show on earth and reduce the need for lots of cash. Its all about controlling risk and letting your winners run without giving it all back...so learning to use trailing stops has been a become a huge "AH-HA" moment in my trading business. With 5M, don't think 100k....think diversification.
Simulators are great for teaching, but get to a live account starting off trading 1 to 2 contracts at a time as soon as you feel comfortable. Stick to less volatile instruments like the ES...... have a written trading plan with entry parameters, stops and a exit strategy. And for goodness sakes, don't think 3-5 k will happen overnight. Set some realiistic goals and I suspect in a few months, you'll be postive with some real education and experience. Then its a process of increasing contracts, understanding reward/risk ratios and winning percentages. Its about statisitic's without "scared money", but don't kid yourself, a bad beat in this game is even harder than playin poker and emotions and lack of discipline have created a cementary for guys who were going to make it big.
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Just a thought... but maybe you're approach to this is a little one sided. Instead of trying to make 3k to 5k/day, why not focus on just not losing that much every day? I've never fully understood why certain people limit themselves to just one target - unless they are only specifically trying to make a fixed amount every session and have proven consistency. If the market is going to give you an opportunity then take it. Because really, if you set to make just (for example) $300/day - and you're first couple trades are losers, are you going to keep swinging? This isn't a good strategy at all. Some people may say it is, but that's just because they probably do it themselves and want to justify their own losses. Realistically how many retail traders actually make their "target" day in and day out? I'm assuming less than 1%. That whole game that newbies play of trying to make 2 pts. a day on the ES or something like that is a lesson quickly learned. If you go into trying to make that fixed amount, then that's all you're going to settle for... which is the amateur hour equivalent of trading. Since you have such a large pool of capital to play around with (and it seems like you are pretty business savy), I would research options. Put a defined risk reward on the table and manage that position. Do your research, and learn the ins and outs of risk/reward. Don't go into futures with this approach. It's not worth it... literally. Think - Capital preservation. Capital preservation. Capital preservation.
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Favorite Futures: YM & Equities & Options & Mutual Funds
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If you are risk averse. Why would you trade futures. There are thousands of other financial instruments where that kind of capital will pull in your desired ROR without the significant risk of loosing more than you have invested...