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$5,000,000 account earning $3000 to $5,000 daily. is it possible?


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$5,000,000 account earning $3000 to $5,000 daily. is it possible?

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  #1 (permalink)
 arbman1 
fort lauderdale florida
 
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Hello All-
First time poster. Here is a serious question, please post to the forum or send me a PM. If you were trying to earn $3000-$5000 per day with a $5,000,000 account, what would you trade and what methodology? Im interested in treating the account like I treated my business-No senseless risks, grind out profits consistantly. Thanks,
Jake

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 pengi 
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If you are a good daytrader, you can make 5K per day off a 100K account. If I had 5M USD, I wouldn't risk that much in the market... I would buy some apartment buildings and rent them out or something "safe", and only trade with 100K or so.

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  #4 (permalink)
 arbman1 
fort lauderdale florida
 
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pengi View Post
If you are a good daytrader, you can make 5K per day off a 100K account. If I had 5M USD, I wouldn't risk that much in the market... I would buy some apartment buildings and rent them out or something "safe", and only trade with 100K or so.

Appreciate that. but looking for a lock of $3 to $5K per day by leveraging my $5mil. obviously, im not looking to swing or risk that size but seeking an arbitrage or minutiae movement that can squeeze out .01% or less daily.

BTW, if i can do it for less, im all for it, of course. Im completely risk adverse for that size account.

I went to cash on July 22, against the adamant protests of my Money Manager. managed to save a 7 figure loss over the past 45 days and got to thinking that there must be a way to grind out 3-5 with little or commensurate risk.

My goal is to preserve equity and grind out $15k to $25K per week.

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  #5 (permalink)
 bobarian 
whitestone, new york
 
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arbman1 View Post
Hello All-
First time poster. Here is a serious question, please post to the forum or send me a PM. If you were trying to earn $3000-$5000 per day with a $5,000,000 account, what would you trade and what methodology? Im interested in treating the account like I treated my business-No senseless risks, grind out profits consistantly. Thanks,
Jake

the post should include what your backround in trading is.This kind of question, no offense intended, sounds like something a person would ask, that has no experience in the markets at all..which is ok, because i think , the majority of traders will tell you, that you need to simulate a method and prove its consistency before you trade live.With that said, a good trader could get by with significantly less in his or her account.From my perspective, having 100k or 5million is really not the most important point.In order to trade large size, imo, you need to earn that right.If you cant be profitable with 1 or 2 contracts, why would you trade 10?Unfortunately, there are plenty of people doing this, and getting cleaned out.If you look at it from the tradres perspective, they might say go ahead and start with 20 contracts, because they will gladly take your $.In my opinion, you cant skip the steps, so, good luck!

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  #6 (permalink)
 pengi 
Tokyo, Japan
 
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arbman1 View Post
there must be a way to grind out 3-5k with little or commensurate risk.

Daytrading is extremely risky. It took me a year before I learned how to take money out of the market. Please simtrade for a long time until you risk any money in the market... Learn a lesson from this guy:


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  #7 (permalink)
 arbman1 
fort lauderdale florida
 
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Thank you both for your comments. yes, I completely understand the risks of daytrading, thats why i am looking for more of a lock then a spec. ive traded off and on for years with no real consistent success and have never met ANYONE WHO HAS CONSISTANTLY MADE MONEY DAY TRADING YEAR IN AND YEAR OUT. i dont mean eaking away $150,000 per year, I mean high 6 or 7 figures.

perhaps this the wrong forum but im looking for an infantesimilly small edge to arbitrage .01 percent consistantly.

my thoughts are, "why take any risk of trading if there is a way to lock a profit".

im not interested it swinging a huge bat and risking 6 figures on a trade. just looking to grind out a fraction of a point, 9 out of 10 times using the clout of my cash.

any thoughts on a proven methodology would be appreciated.



Thanks.

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  #8 (permalink)
 wldman 
Market Wizard
Chicago Illinois USA
 
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arbman1 View Post
Thank you both for your comments. yes, I completely understand the risks of daytrading, thats why i am looking for more of a lock then a spec. ive traded off and on for years with no real consistent success and have never met ANYONE WHO HAS CONSISTANTLY MADE MONEY DAY TRADING YEAR IN AND YEAR OUT. i dont mean eaking away $150,000 per year, I mean high 6 or 7 figures.

perhaps this the wrong forum but im looking for an infantesimilly small edge to arbitrage .01 percent consistantly.

my thoughts are, "why take any risk of trading if there is a way to lock a profit".

im not interested it swinging a huge bat and risking 6 figures on a trade. just looking to grind out a fraction of a point, 9 out of 10 times using the clout of my cash.

any thoughts on a proven methodology would be appreciated.



Thanks.

you probably are in the wrong forum.

By your own statement you kind of answer the question. You have never seen anyone do it, how do I do it?

There are really no proven methods or indicators...only proven traders. Most in the catagory that you seek to join would never admit publically what they made or how they made it. You may seek out a HFT group that will let you deposit with their JBO and use their technology but they are after the added leverage you deposit brings.

You could probably make $500,000 or more a year doing the buy write on high div stocks like T, but that has an associated risk bigger than the one you may accept. You might be able to buy low ivola puts sell high ivola calls to complete the conversion with relativly limited risk for the type of return you seek.

I'd say come on in the water is fine, but that would be a lie. The water is full of sharks that will stop at almost nothing to seperate you from your money.

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  #9 (permalink)
 wldman 
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be able to buy convertable preferred stock, some common stock and sell calls, leaving the expense of long put off the equation...But you would need to be good and lucky to avoid the pitfall of additional risk. A few years ago I locked 17% on Jet Blue Airlines and before that over 20% on a Delta Airlines conversion but I was into that full time with some of the best in the business. Best of luck. DB

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  #10 (permalink)
 arbman1 
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Appreciate the comments DB.

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 wldman 
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might be your game . You have any experience with that?

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  #12 (permalink)
 Family Trader 
Palm Beach County
 
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arbman1 View Post
Appreciate that. but looking for a lock of $3 to $5K per day by leveraging my $5mil. obviously, im not looking to swing or risk that size but seeking an arbitrage or minutiae movement that can squeeze out .01% or less daily.

BTW, if i can do it for less, im all for it, of course. Im completely risk adverse for that size account.

I went to cash on July 22, against the adamant protests of my Money Manager. managed to save a 7 figure loss over the past 45 days and got to thinking that there must be a way to grind out 3-5 with little or commensurate risk.

My goal is to preserve equity and grind out $15k to $25K per week.

Since you saved yourself a "7 figure loss" you afford 50 dollars to be an Elite member.

If you have accumulated 5,000,000 you already know the answer

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  #13 (permalink)
 Relentless 
Tuscaloosa, Alabama
 
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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.

Relentless

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  #14 (permalink)
 GaryD 
Orlando, Florida
 
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arbman1 View Post
Hello All-
First time poster. Here is a serious question, please post to the forum or send me a PM. If you were trying to earn $3000-$5000 per day with a $5,000,000 account, what would you trade and what methodology? Im interested in treating the account like I treated my business-No senseless risks, grind out profits consistantly. Thanks,
Jake

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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  #15 (permalink)
 bluemele 
Honolulu, Hawaii
 
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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.

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  #16 (permalink)
 arbman1 
fort lauderdale florida
 
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Appreciate the post/feedback. Sorry for the discrepancy in numbers, I meant to post 3-5k per day, 15 to 25k per week.

I sold an arbitration/lawfirm last year. Own real estate, other assets, diversification, ETFs etc, but am looking for something hands on. Something to excel at without getting fleeced.

Thanks again,

J

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 liquidcci 
Austin, TX
 
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arbman1 View Post
Appreciate the post/feedback. Sorry for the discrepancy in numbers, I meant to post 3-5k per day, 15 to 25k per week.

I sold an arbitration/lawfirm last year. Own real estate, other assets, diversification, ETFs etc, but am looking for something hands on. Something to excel at without getting fleeced.

Thanks again,

J

There is a catch 22 in asking this.

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."
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  #18 (permalink)
summitX
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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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Arpeggi
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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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 mainstream 
Chicago, IL
 
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arbman1 View Post
Appreciate that. but looking for a lock of $3 to $5K per day by leveraging my $5mil. obviously, im not looking to swing or risk that size but seeking an arbitrage or minutiae movement that can squeeze out .01% or less daily.

BTW, if i can do it for less, im all for it, of course. Im completely risk adverse for that size account.

I went to cash on July 22, against the adamant protests of my Money Manager. managed to save a 7 figure loss over the past 45 days and got to thinking that there must be a way to grind out 3-5 with little or commensurate risk.

My goal is to preserve equity and grind out $15k to $25K per week.

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...

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  #21 (permalink)
 paganini 
Austin, Texas
 
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$3000 means 60 points on one contract, 12 points on 5 contracts, etc, 6 points on 10 contracts. Or one point on 60 contracts.

If you're a stock investor, the average S&P 500 return for the last 40 years has been around 9%. In today's value, it means about 0.01 POINT per day. To get one point, you'll have to out perform the market by a factor of 100:1:, or 10000%.

This is also the reason why most traders fail. The odds are stacked against them.

It's very simple - prove to yourself that you can do it with $5000 (turn it to $10k in a few months), if you can, then you can trade large amounts. Doesn't matter if you lose 1 point a day on a $5k account or a $5 million account, you'll lose it all, it just takes longer (and probably hurts more) on a $5mill account.

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  #22 (permalink)
 flight302 
florida
 
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Arbman1,
Since you are trying to trade such a large account you may want to try masterthegap.com. His system is gap trading the ES at open, and you can trade it with large size. I suggest you also trade the 1st hour trade with Scott as he has been doing pretty well with it. Check out his site, he has a trial for a small fee. You will need the premium package so you can listen to how he wants to trade the open and the 1st hour . I would start with a few contracts just to get the feeling, then increase size as your comfort builds.
regards,
flight302

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  #23 (permalink)
 taylor 
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Going to add my little bit of advice. Like most people on the forum, I have made HUGE mistakes in my quest for learning about trading futures. It doesn't matter how much money you have, like a previous poster mentioned, if you can't make money on 1 contract, your sure as hell won't make any on 100 or 1000 contracts. There are more fake, money grabbing idiots out there trying to sell you the "holy grail" than there are heartbeats in your chest. Forget about trying to find a "system" or "method" that works. What works for one person, won't necessarily work for you (I'm sure we've all been down that road before). Just like any business (whether it be real estate, law or anything for that matter), you need to study and understand how it works. Your mindset is the first thing you need to work on to be successful. If you don't have this, look for another career, trading isn't for you.

Most people making money in the market, won't tell you how they are doing it. Plain and simple. Most of us are still amateurs trying to work out where to start. Buy a book called "Trading in the Zone" by Mark Douglas. This guy is a professional trader who explains the ups and downs of trading, and what you need to understand before even dropping a cent. Read up everything you can about Price Action. This is the market's heart beat. Learn how it moves and reacts. Just as a surgeon needs to know how the human body works, traders need to know how the price action of the market works. Once you understand Price Action, then you can throw on a few indicators to help with the market structure (yes, even the Hedge Funds use indicators, but few of them (I subscribe to a particular hedge funds information ;-) )

Once you understand Price Action, look for patterns and other signals (you will notice these things with a lot of screen time looking at your charts) then begin backtesting (for recognition) and forward testing (in simulation) to test your theory. If you can double your sim account without breaking you trade rules, you then give yourself permission to trade live.

The hard truth is, there is no shortcut to trading. Warren Buffet didn't learn the market in a week, neither did Paul Tudor Jones (the greatest trader of all time in my opinion).

As for account size, for $3000 income per day, you only need to $50000 to $100000 to do that (based on 2.5% risk per trade). But that's a later story.

Now for my tough love. If you are after a quick fix, and not interested in spending COPIOUS amounts of time learning the art of trading (reading the markets heartbeat), then find something else to do, you will fail and lose a lot of money. If you take the time and study hard (we're talking a good year if not longer) and learn, you MIGHT get somewhere.

Day trading is the toughest job in the world. It will beat you down, gut you and torture you until you give up, unless you outsmart the market and understand how it works. I will post some useful information when I find it again (I have an entire fold on my hard drive dedicated to trading, including some contacts.) Some of the webinars for the elite section aren't bad either (you will always pick up something new about the market (just don't get sucked in to purchasing any packages)

I will leave you with this final statement. From the mouth of the Great Warren Buffet.

Rule number 1 - Don't lose money
Rule number 2 - Don't forget rule number 1.


If I have offended anyone, my apologies, it was not my intention.

When the government fears the people, you have Liberty. When the
people fear the government you have Tyranny."
- Thomas Jefferson
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 kronie 
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paganini View Post
$3000 means 60 points on one contract, 12 points on 5 contracts, etc, 6 points on 10 contracts. Or one point on 60 contracts.

If you're a stock investor, the average S&P 500 return for the last 40 years has been around 9%. In today's value, it means about 0.01 POINT per day. To get one point, you'll have to out perform the market by a factor of 100:1:, or 10000%.

This is also the reason why most traders fail. The odds are stacked against them.

It's very simple - prove to yourself that you can do it with $5000 (turn it to $10k in a few months), if you can, then you can trade large amounts. Doesn't matter if you lose 1 point a day on a $5k account or a $5 million account, you'll lose it all, it just takes longer (and probably hurts more) on a $5mill account.


ahhhh, the refreshing viewpoints of new money, and newbie traders

whew, the market always needs these

and for every few hundred, one gets through....

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 Jura   is a Vendor
 
 
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ahhhh, the refreshing viewpoints of new money, and newbie traders

whew, the market always needs these

and for every few hundred, one gets through....

I don't understand your post - can you elaborate somewhat on what you're saying? To me, it seems that Paganini offers good advice by stating that the topic starter should start with a tiny fraction of his capital designated for speculative trading.

Regards,
Jura

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 kronie 
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Jura View Post
I don't understand your post - can you elaborate somewhat on what you're saying? To me, it seems that Paganini offers good advice by stating that the topic starter should start with a tiny fraction of his capital designated for speculative trading.

Regards,
Jura

same logic as those who presume that sim trading percentages will port over to live trading and live trading percentages are logrythmic in scale and hence project profitability,

reality intervenes every time and destroys those expectations,

similarly, every new account starts with $5 million dollars

similarly, every new trader starts a new account with the goal of achieving successful use of leverage,

but then you visit forums like Big Mike and find so many of us in our infancy had such delusionary visions of granduer too, only to have to slog through the weeds and swamp and hoist ourselves onto any island of hope and promise, whilest the nest-egg (starting balance) reflects the skirmishes and fire-fights we've all been through.

wow, that reality is a pisser...

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  #27 (permalink)
 wldman 
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the trend here is to talk about or point out limitation. Draw your own conclusions. The Euro puts in a daily range of over 150 ticks. DB

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 furytrader 
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The idea of generating $5K off a $5M account, day in, day out, averages out to be roughly 25% a year (assuming 252 trading days a year). There is no strategy that generates 25% a year that is a "lock".

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 liquidcci 
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furytrader View Post
The idea of generating $5K off a $5M account, day in, day out, averages out to be roughly 25% a year (assuming 252 trading days a year). There is no strategy that generates 25% a year that is a "lock".

Also nothing that does it without risk. Plus the larger the account size the more difficult it can become to generate higher returns at some point. Unless you can diversify and keep size within what a particular instrument can handle your strategy will hit a wall.

While I would have no complaints having 5 million cash it does complicate trying to generate same returns as on a smaller account if going to leverage it.

"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."
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 wldman 
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furytrader View Post
The idea of generating $5K off a $5M account, day in, day out, averages out to be roughly 25% a year (assuming 252 trading days a year). There is no strategy that generates 25% a year that is a "lock".


50:1, or higher for that kind of deposit it is like 2.5% per year....I think the ten year is around 2.2% but I guess nothing is a "lock"

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 liquidcci 
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wldman View Post
50:1, or higher for that kind of deposit it is like 2.5% per year....I think the ten year is around 2.2% but I guess nothing is a "lock"

Right about that there is no such thing as a lock. There are high and low probabilities but anomalies happen and things can change.

"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."
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tradetree
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furytrader View Post
The idea of generating $5K off a $5M account, day in, day out, averages out to be roughly 25% a year (assuming 252 trading days a year). There is no strategy that generates 25% a year that is a "lock".

True, but there are approaches that come awfully close to a lock for that little a gain. 25% a year is not very much for a well diversified portfolio. It has been said many times by the greatest traders, that if they were to publish a consistent and winning system on the front page of the Wall Street Journal, only already profitable traders would use it for profit.

The same is true when I read posts about how automated systems don't work. That is only because the client doesn't know how to qualify a system or read the statistics. There are good and bad systems, and it is possible to tell them apart. You need the following:
1) Have enough knowledge to qualify a system.
2) Stick to strict money management rules.
3) Stick to the rules of the system.

Take a look at Trading System Lab (I have absolutely no association). He is strictly mathematical and builds portfolios of instruments (ie Gold, Euro, S&P index) as well as portfolios of strategies. When you do this properly, you then transform the equity curve to near a straight line where there is little draw-down vs gain. If you then took just 1/10 th of your cash, lets say $500,000 then you could at least make 50% on that in one year. If you then kept growing just that account, very quickly you would achieve your goals without touching the other $4.5M. Put that aside in very secure bonds or treasuries. - Cash is king, you don't need a lot of cash for trading!

Good luck in finding your way. There are many sharks in the water, but with statistics and probabilities there is a way to cut through the mud.

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 liquidcci 
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tradetree View Post
True, but there are approaches that come awfully close to a lock for that little a gain. 25% a year is not very much for a well diversified portfolio. It has been said many times by the greatest traders, that if they were to publish a consistent and winning system on the front page of the Wall Street Journal, only already profitable traders would use it for profit.

The same is true when I read posts about how automated systems don't work. That is only because the client doesn't know how to qualify a system or read the statistics. There are good and bad systems, and it is possible to tell them apart. You need the following:
1) Have enough knowledge to qualify a system.
2) Stick to strict money management rules.
3) Stick to the rules of the system.

Take a look at Trading System Lab (I have absolutely no association). He is strictly mathematical and builds portfolios of instruments (ie Gold, Euro, S&P index) as well as portfolios of strategies. When you do this properly, you then transform the equity curve to near a straight line where there is little draw-down vs gain. If you then took just 1/10 th of your cash, lets say $500,000 then you could at least make 50% on that in one year. If you then kept growing just that account, very quickly you would achieve your goals without touching the other $4.5M. Put that aside in very secure bonds or treasuries. - Cash is king, you don't need a lot of cash for trading!

Good luck in finding your way. There are many sharks in the water, but with statistics and probabilities there is a way to cut through the mud.

I would agree 25% is not that difficult but not a lock.

"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."
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 furytrader 
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25% "is not that difficult" ... hmmm ... okay, well, I'll be looking forward to seeing your hedge fund knock the socks off of 95% of the professional money managers out there. Good luck!

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tradetree
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liquidcci View Post
I would agree 25% is not that difficult but not a lock.

No question, but driving to work every day is not a guarantee of making it there alive. There are no guarantees in life, even US Treasuries are not guaranteed investments. But what on earth is safer? It is all in the ratios of risk vs. return. If you want to risk 1/10th of your assets you can do so with very high likely-hood of high returns. In that case your risk is 1/10th of all your assets in order to make 1/20th of all your assets in profit. If you compound that, the risk goes lower and lower as you trade profits and leave the original capital on the side. That is as close to a lock as I can see.

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 liquidcci 
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furytrader View Post
25% "is not that difficult" ... hmmm ... okay, well, I'll be looking forward to seeing your hedge fund knock the socks off of 95% of the professional money managers out there. Good luck!

furytrader the right strategy that allows you to scale can easily produce excellent returns. Geometric account growth is an amazing thing. 25% is not that difficult. In fact if I could not get more than 25% I would do something else. The money managers trade so much size it is a different game. They can't employ many of the same types of strategies the small guys use to produce returns. So what I do would not translate into the money manager world. Really doing what most of us do compared to the big funds is like comparing Apples to Oranges. The ball they have to roll up hill to get returns is just so big.

There is a point in every strategy where the size can get so big that it begins to diminish returns on a percentage basis. I have not hit that point yet.

"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."
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tradetree
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liquidcci View Post

There is a point in very strategy where the size can get so big that it begins to diminish returns on a percentage basis. I have not hit that point yet.

Well said! I doubt we would be on this forum if we had hit that size. We would be starting a non-profit for philanthropic purposes!

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 liquidcci 
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tradetree View Post
Well said! I doubt we would be on this forum if we had hit that size. We would be starting a non-profit for philanthropic purposes!

That is for sure.

"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."
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 bluemele 
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tradetree View Post
Well said! I doubt we would be on this forum if we had hit that size. We would be starting a non-profit for philanthropic purposes!

Or, filing bankruptcy.

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 Cloudy 
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Regards to original post. arbman1, if you had that much capital to start with, maybe look into conservative option spreads strategies. Tiberius has a trade journal with some option spread trades sometimes. I have my own too, paper only, but I'm still learning with lots of stumbles. Also, check out the "selling options on futures" thread. And this website. Managed Stock Option Selling with Option Trading Strategies They run a 25 million fund. And entirely run their fund on selling options on futures and they only use maybe a third to half of the total fund.

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 bluemele 
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Well, if CTA's are what you want, then I suggest these sites:

Managed Futures & Hedge Funds by AutumnGold

Research on Hedge Funds, Fund of Funds, and Managed Futures | Alternative Investments

You will find that as funds get bigger, they tend to have worse returns. Also, anything not USA can't be confirmed as they don't have NFA breathing down their backs.

Check this out also for the Calmer ratio:

https://www.autumngold.com/ManagedFutures/contents.php

The Newport group is pretty amazing.

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  #42 (permalink)
 Lornz 
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I would recommend not relying too much on the advice you get on a message board. Most here don't have anywhere close to $5 mln, so you might not be directed down the right path.

What you essentially are describing is deterministic arbitrage, but everything is arbed away these days. Your next best bet would be to employ some StatArb strategy, if you can develop one.

You say you want to treat trading like a business? Well, expect to spend a lot of time doing R&D.

Not having to worry about income is your biggest advantage. You can afford to spend time exploring the various fields of trading - without monetary-induced stress.

As for low-risk trading; you might want to look into spreads.

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 kronie 
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Cloudy View Post
Regards to original post. arbman1, if you had that much capital to start with, maybe look into conservative option spreads strategies. Tiberius has a trade journal with some option spread trades sometimes. I have my own too, paper only, but I'm still learning with lots of stumbles. Also, check out the "selling options on futures" thread. And this website. Managed Stock Option Selling with Option Trading Strategies They run a 25 million fund. And entirely run their fund on selling options on futures and they only use maybe a third to half of the total fund.


IB advertises margin for accounts over $100,000, on a simplistic dividend paying strategy, where you buy, hold, pay margin interest carrying fees (hence their advertisement), and collect quarterly dividends,

presumably, stagger the purchase of stocks so that their regular dividends are paid on consecutive months, so that the quarterly payments all coincide with monthly payments throughout the year,

that conservative strategy would be better suited to a $5,000,000 account, imagine the leverage they would assign that opening balance....

the only problem would be to hedge the positions with either opposite or protective options puts or cap the potential rise in stock value with profitable call sales...

then consider the tax implications, as these are equity trades of a shorter term nature than futures trades subject to the 60% s/t, 40% l/t risk adjustment

ohh, why not just go to a (mostly incompetent) broker or wealth manager and have him do the same, just for substantially more fees.

one thing is certain, you're going to pay a substantial learning curve tuition, (read the thread on spending over $10,000 in education on trading), just to capture either:

1) your aforementioned 150 nightly pips on the Euro, or some portion thereof
2) your well defended but delusionary 2.5% or 25% yield, whether or not the decimal was properly placed or not

hey, just keeping it real

so, is this a fictional account or a real one?

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tradetree
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Lornz View Post
I would recommend not relying too much on the advice you get on a message board...

As for low-risk trading; you might want to look into spreads.

Lornz,
You created quite a contradiction here! There are a wide range of capabilities on this board. Anyone coming to a board is looking for a wide range of insights and input. They will take the next step, with the knowledge that this is a first level or a starting point.

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 Lornz 
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tradetree View Post
Lornz,
You created quite a contradiction here! There are a wide range of capabilities on this board. Anyone coming to a board is looking for a wide range of insights and input. They will take the next step, with the knowledge that this is a first level or a starting point.

Yes, it was intentional...

My point was more that $5 mln gives one the opportunity to do more than directional betting, a luxury many on this board doesn't have....

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 bluemele 
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off subject, but where I would spending the cash.

Auction.com Preps ‘Monster’ Offering of Notes and REO Properties

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 liquidcci 
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If I had 5 million I would use a multi pronged approach.

I would place some in a manged situation.
Some I would auto trade multiple futures markets with multiple strategies. I would use strategies that were daytrade only and others that held for longer time frames.
I would do options spreads directional non directional. etc...
I would hold some in reserve waiting for those special moments when market crashes and good companies get real cheap.

You get the picture.

I would put a few million in very safe investments in case the above went very wrong.

Develop a logical comprehensive plan with excellent money management. 5 mil is enough that you can easily diversify which may mean giving up some profit but also means you can protect what you have.

"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."
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 Private Banker 
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Arbman,

Could you clarify what you're asking for here? You do have $5MM to invest or you want to manage your money as if you had $5MM to invest? Sorry, I didn't see any clarification on this.

This is not investment advice but just some ideas to consider. If you do have $5MM+, there are a variety of investment vehicles not available to the retail market. You could "trade" a small amount on your own if you really wanted to and obtain $3k - $5k on a daily basis if you know what you're doing. "If" being the key part of that statement and this should be an average figure as some days work out well and some days don't. But for a few million, I would, and I don't know what your personal situation is but work with an investment bank to create a portfolio of structured notes each benchmarked against an index of your preference (S&P, Euro, etc.) These notes can provide protection of principal with a max monthly/quarterly gain and/or notes that don't have principal protection but have a higher alpha opportunity vs the underlying index. They're essentially an underlying option strategy which I can explain more if interested. Talk to a few PWM firms such as Goldman or UBS or whoever. You'd also have access to many hedge funds/funds of funds, private equity funds, etc. I would also dedicate a sizable amount into even more of a passive investment structure such as a fixed income portfolio. You really shouldn't be risking that amount of capital within one investment strategy. I would think capital preservation and income would be higher on your list vs trying to aggressively grow this amount further.

If you're just trying to invest like you have $5MM and are just looking for someone to explain a few set up's to you, well there are a lot available on this forum but I personally haven't seen anything that really looks intriguing but would recommend learning what looks attractive to you and look to take what you like of them and create your own methodology that coincides with your strengths and comfort zone. The cap preservation issue I spoke of would obviously be irrelevant as you're looking to consistently grow your assets and a lot more risk will be required to do so.

Feel free to ask me any questions should you really need help with the cap preservation issues. I came from that world...

Cheers,
PB

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tradetree
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I used to invest in real estate, and I realized something about this person's predicament. If you develop a property or business, the value of the asset is not visible. If he were to watch the value of his company before he sold it, it would make his knees buckle. He invested some funds and a great deal of time, and perhaps it was worth $100K. Over time it made it to $1M, then went back to $500K, then up to $2M. Then back to $1M etc until it finally sold at $5M.

If you were watching a stock and your investment went from $1M to $2M and then back to $1M, you would have thought you were a crazy gambler! - Yet, because for a company the value was hidden, you didn't see the great fluctuations.

I sold my last property in Oct 2007, just before the real estate crash. I would have lost hundreds of thousands of dollars if I had not gotten out. The same is true for any business; they vary in value to even a greater degree. But watching the stock market, it looks like a bunch of crazy people to jump in there, because the prices are all available all the time.

In reality, given all the investment options available, the risks can actually be made much lower than the risk that company represented. The difference is that he knew that company and that industry, and in contrast does not know the world of investing.

The only solution to this problem is to get educated. You don't have to learn how to trade, but instead how to evaluate CTA's, systems, hedge funds etc.

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 paganini 
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Kronie,
you're assuming a lot

Of course, trading a one lot account is EASIER than trading 20-50-100+ contracts each trade. you're not going to affect the market or direction with your trades, where someone trading 50 contracts could end up affecting the price movement.

My point is if you can't prove the performance with a simple one lot trade (which requires $5000 for overnight maintenance, but i am assuming daytrading), you can forget about $100k, $2 million, whatever.

And i'd contend the difference between sim trading and real trading versus $5k and $100k is the factor of emotion. There could be slippage but if you were to sim trade with limit orders, the slippage can be minimized. The difference is going to be emotional factors and self doubt when one's money is at play. Same goes from $5k to $100k.

However, if you can control it (this is where most traders fail), it is definitely scalable.

There is always, however, going to be uncontrollable factors - when i started trading over 15 years ago in college with stocks, i built my account from $10k to $30k only to see it drop to $15k in 20 minutes We were all trading this company around 6-7 bucks a share, forgot the name of it. Anyway, it was great, lots of volatility - and then the stock halted. Pending news. News was the company filed for bankruptcy. Next tick, $3 dollar and change. I got out, took the hits. Some other traders decided to ride it out (right) and ended up in a penny stock section. Talked to a trader in Texas who adviced me to trade stocks with options (deep in the money but since options are limited in the risk level..). Did that, rebuild the account back up in less than 9 months back in 1993-94.

So while I am new to futures, i am not new in terms of market action and trading as well as the emotional tolls involved. It's funny because after grad school in 1998 i went and worked for a engineering company (or two) for 10 years and didn't ahve the time for daytrading and can only manage the account with overnight positions. In 2006 I exited all stock market positions except for a few energy sector plays (oil, etc.). Many of my colleagues did not and once oil prices hit $140, i exited completely. My accounts rose about 13% in 2008 where many others lost 30%, and i only put in about 25% of the accounts in oil related funds and exited pretty close to the peak. Many of my former colleagues are still waiting for their retirement fund to get back to even at 2006. It's sad because as the market dropped from 14,000 to 12,000 in 2008, many of them still hold out hope that it will recover even though if you had pay any attention to the housing market, you know something horrible is going to happen. They let their emotions got the best of them and instead of exiting with a loss, they decide to held on. And I am sure it wasn't easy seeing their account goes to 6700 in the low of Mach 2009.

Similarly, bet lots of traders went bellyup in the flash crash last year in futures. Their stops means nothing because by the time it was executed, it might be 10 points lower. The risk of losing it all in daytrading is there in a single day. Think 9/11 - traders went long, market halted, opens days later at 15-20% lower (which will wipe out your overnight margin plus a couple extra margins).







kronie View Post
same logic as those who presume that sim trading percentages will port over to live trading and live trading percentages are logrythmic in scale and hence project profitability,

reality intervenes every time and destroys those expectations,

similarly, every new account starts with $5 million dollars

similarly, every new trader starts a new account with the goal of achieving successful use of leverage,

but then you visit forums like Big Mike and find so many of us in our infancy had such delusionary visions of granduer too, only to have to slog through the weeds and swamp and hoist ourselves onto any island of hope and promise, whilest the nest-egg (starting balance) reflects the skirmishes and fire-fights we've all been through.

wow, that reality is a pisser...


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 sysot1t 
 
 
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arbman1 View Post
Hello All-
First time poster. Here is a serious question, please post to the forum or send me a PM. If you were trying to earn $3000-$5000 per day with a $5,000,000 account, what would you trade and what methodology? Im interested in treating the account like I treated my business-No senseless risks, grind out profits consistantly. Thanks,
Jake

$5M might be more than plenty for you to go to firms with Private Banking and they will provide you access to options that are not available to many of the members of this board unless they have assets in the millions ... or in other words, have someone who is performance based (2+20) manage your money full time ...

if you want to learn yourself because you are bored or feel the allure of trading, then $1M is more than enough, and I would start out with equities first via someone like Bright Trading out of NV and do it FT for 6-12 months.. then just go out on your own office at home or anywhere and trade.. at that level of capital, you have options... lots.

unlike others on this thread, I assume that $5MM is not your only money, so I will make the assumption that you are already diversified with other investments like Real Estate and Private Equity placements... if not, I suggest you look at those as well.. you can buy residential and commercial RE in depressed areas that are likely to bounce within the next 3-5 years with a C-O-C return of 10% at the very least..

stay away from tax liens, unless you have a staff to work for you and have more than $5MM .. those return quite a lot of $$$ @ 18% or more, but the issue is finding quality product that will be paid off and not foreclose... you dont want to have to take things to foreclosure, not worth the hassle on this market..

above all things... have a plan... having all the money in the world means little if you have no idea what you are doing... a clear plan with what you want to achieve with that money will dictate not only the goal and objectives, but the exit strategy when those goals/objectives are reached...

otherwise, I agree with @ Lornz and @ Private Banker ... just be warned about CTA's... there are lots of them out there, and many are a scam or wanna be's... best to work with a Private Bank or Wealth Management Firm that is reputable ... just keep in mind that if $5M is all you have, that might not be wealth to many of the elite banks.. but given current market conditions, I am sure they would take your business either way.

then again, you might already know all this things, might have multigenerational trusts setup, more money than you can spend for the remainder of your lifetime and $5MM is your play money... in that case.. some of the above still applies.. just talk to your banker.

PS... btw.. with $5MM your daily target would be $50K+ and your daily loss as well should be $50K... BTW... so that is really depending on your risk management..

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 Serninja 
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arbman1 View Post
Hello All-
First time poster. Here is a serious question, please post to the forum or send me a PM. If you were trying to earn $3000-$5000 per day with a $5,000,000 account, what would you trade and what methodology? Im interested in treating the account like I treated my business-No senseless risks, grind out profits consistantly. Thanks,
Jake

arbman1,

if you have that much money why you don't just stay in your business and/or enjoy life! Most daytraders trying to reach that sum by daytrading. You already have that sum... I guess.

How about donation? You'll most possibly never get a better interest for your money.

Regards,
Serninja

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 kronie 
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paganini View Post
Kronie,
you're assuming a lot

...........


So while I am new to futures, i am not new in terms of market action and trading as well as the emotional tolls involved. It's funny because after grad school in 1998 i went and worked for a engineering company

......

Similarly, bet lots of traders went bellyup in the flash crash last year in futures. Their stops means nothing because by the time it was executed, it might be 10 points lower. The risk of losing it all in daytrading is there in a single day. Think 9/11 - traders went long, market halted, opens days later at 15-20% lower (which will wipe out your overnight margin plus a couple extra margins).

no,

the starter of the thread is assuming a lot,


incidently, while you're new to futures,

come back after trying to make Emini trading work for you, and more preferably, after you're doing it full time as a primary source income,

and provide us with your comments and experiences, if you would.

you might find yourself talking a position in line right behind all the others on these threads, waiting for, as they say in the hedge world, Alpha, to come along,

iow, waiting to BE, and turn green overall.....

its not as simplistic as people watching from shore think or are lead to believe it is,

Surf's up!

OH, and most importantly,

did you notice that no one ever confirmed whether or not this is hypothetical (i.e. waste of time discussion) or real or even near-real

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 sysot1t 
 
 
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paganini View Post
So while I am new to futures, i am not new in terms of market action and trading as well as the emotional tolls involved. ...

Similarly, bet lots of traders went bellyup in the flash crash last year in futures. Their stops means nothing because by the time it was executed, it might be 10 points lower. The risk of losing it all in daytrading is there in a single day. Think 9/11 - traders went long, market halted, opens days later at 15-20% lower (which will wipe out your overnight margin plus a couple extra margins).

hmmm... curious.. are you referring to retail traders or all traders in general? because there is a huge difference on impact to what you are stating...

first, all positions are hedge on the institutional side... so while market did open lower after 9/11... you have no idea how much money was made that day by baskets of stocks from perceived impacted industries were short before the markets were halted.. similar to the brief tremors we had a few weeks back that trigger a sell off... baskets were shorted within seconds on impacted sectors, and you would have also seen the increase on both options and underlyings...

so yes, more than likely a retail trader was wiped... but let's not say "traders" so broadly since there are different tiers.. I consider myself retail, but I still hedge my risk as I do not carry stop losses when I trade equities..

but back to the original OP's discussion... no sense on hijacking a thread...

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 worldwary 
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An interesting thread. My two cents:

1. I would not trade futures if your goal is a relatively low-risk, consistent daily return. There are other instruments that give you a better chance of controlling your risk, like options spreads. You could structure a spread trade that will net you a $5K return while establishing your downside risk from the beginning, and the more capital you have to throw at it the better equipped you'll be to find high-probability opportunities. Of course you will still lose some percentage of the time, so you would need to structure the approach intelligently to make sure you're risking an appropriate amount in light of the upside and the probability of failure.

2. With any instrument or trading approach, the returns might average out to $3K-5K per day but the sequence of returns will most likely vary wildly. +15K, -12K, +3K, etc. This needs to be understood up front, that the goal is a sequence of returns that tends to give you a certain profit on average, as a steady, reliable return is really hard to come by.

3. You can't go into it thinking that you'll just trade until you hit your $5K daily goal and then stop, since once you account for losing days this means that your average daily return will be signifantly lower than your goal. The average return on your winning days needs to be substantially higher than your profit goal in order to average out to meet your profit goal. How much higher depends on how frequently you'll encounter losing days and how large the average loss will be on those days.

4. Personally I think that .1% per day should be attainable but very few traders would actually attain it. Traders tend to sabotage themselves by letting losses grow too large, failing to take valid signals, or calling it quits when experiencing a drawdown before they have the chance to work their way out of it. With the proper expectations up front it is easier to do what has to be done.

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sidney7g
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If you dumped something like 100 contracts on the table of an Emini index wouldn't this prevent you from scalping short term considering how much liquidity there is to match a few ticks/point or two? Perhaps, an automated trading bot would pick up on that block order and try to counter it as to pick up on the difference of synchronization with the ES or other related indices. I have no clue and have always wondered if its possible to do short term scalps trading 80+ contracts.

I've tried this sometimes with the sim, Seemed like there was a couple ticks of slippage but nothing serious at liquid times of day. However, I wouldn't use a Sim as any real evidence.

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 Private Banker 
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sidney7g View Post
If you dumped something like 100 contracts on the table of an Emini index wouldn't this prevent you from scalping short term considering how much liquidity there is to match a few ticks/point or two? Perhaps, an automated trading bot would pick up on that block order and try to counter it as to pick up on the difference of synchronization with the ES or other related indices. I have no clue and have always wondered if its possible to do short term scalps trading 80+ contracts.

I've tried this sometimes with the sim, Seemed like there was a couple ticks of slippage but nothing serious at liquid times of day. However, I wouldn't use a Sim as any real evidence.

I'm not sure a 100 lot would be a big target for HFT's. They're probably looking for bigger order clusters. You should have your stops placed where your trade is no longer valid relative to your method. Having said that, it is absolutely possible to do short term scalps with 100 contracts trading the ES. I guess the term "scalp" is loosely thrown and means a different amount to many people/traders. Traditionally one would be referring to a few ticks but what I'm referring to is grabbing 2 - 3 points in the ES. The type of order you are using to enter and exit your position can help with this as well but generally you can get filled on a 100 lot no problem. But this position size should be reserved for very experienced and well capitalized traders obviously but one could build their way up to this over a proven period of time.

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sidney7g
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Private Banker View Post
I'm not sure a 100 lot would be a big target for HFT's. They're probably looking for bigger order clusters. You should have your stops placed where your trade is no longer valid relative to your method. Having said that, it is absolutely possible to do short term scalps with 100 contracts trading the ES. I guess the term "scalp" is loosely thrown and means a different amount to many people/traders. Traditionally one would be referring to a few ticks but what I'm referring to is grabbing 2 - 3 points in the ES. The type of order you are using to enter and exit your position can help with this as well but generally you can get filled on a 100 lot no problem. But this position size should be reserved for very experienced and well capitalized traders obviously but one could build their way up to this over a proven period of time.


Yeah, Sorry, I am referring to short term trades probably in the range of a 2-3 points at market. I assume someone trading with that amount of capital would look to stay in their trades a little longer than a few ticks. Would you say most well capitalized traders would look to trade the ES over other indices due to the liquidity? But then again, I'd assume someone with that much capital would rather look at futures mainly to hedge other investments. Have you ever heard of someone trading purely futures with that amount of capital from home?

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 Lornz 
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sidney7g View Post
Yeah, Sorry, I am referring to short term trades probably in the range of a 2-3 points at market. I assume someone trading with that amount of capital would look to stay in their trades a little longer than a few ticks. Would you say most well capitalized traders would look to trade the ES over other indices due to the liquidity? But then again, I'd assume someone with that much capital would rather look at futures mainly to hedge other investments. Have you ever heard of someone trading purely futures with that amount of capital from home?

Just look at the order book to find out what size you can trade. It's far thinner now than just a couple of years ago, but you can easily trade fairly big on the ES. And yes, there are individual traders scalping that kind of size. At least there used to be, before the advent of HFT-programs...

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 ticker 
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arbman1 View Post
Hello All-
First time poster. Here is a serious question, please post to the forum or send me a PM. If you were trying to earn $3000-$5000 per day with a $5,000,000 account, what would you trade and what methodology? Im interested in treating the account like I treated my business-No senseless risks, grind out profits consistantly. Thanks,
Jake

Arbman1 - sounds like you need to consider compounding your returns vs going all in with everything you have. Both will get you to your goal, but compunding returns lets you stay in the game much longer. A good site I came accross that shows this concept. www.provesta.co good food for thought.

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 Private Banker 
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sidney7g View Post
Yeah, Sorry, I am referring to short term trades probably in the range of a 2-3 points at market. I assume someone trading with that amount of capital would look to stay in their trades a little longer than a few ticks. Would you say most well capitalized traders would look to trade the ES over other indices due to the liquidity? But then again, I'd assume someone with that much capital would rather look at futures mainly to hedge other investments. Have you ever heard of someone trading purely futures with that amount of capital from home?

OK, thanks for clarifying. Yes, many traders come to the ES simply because they need to put a very large amount of capital to work and the ES is one of the most liquid contracts available. The order book has thinned out lately but that's mostly attributed to the increased volatility which is allowing traders to achieve most likely the same trading success with smaller position size. Don't get me wrong, there are still some big orders coming through for example yesterday at around 11AM EST, I saw a buy order come in at 1,000 lot. Obviously this was during a period of higher liquidity but for 100 lot, you can pretty much trade that size all day long. Also, a lot of the larger orders are shredded into the market.

Not all 100+ lot traders are placing hedges. There are a lot just going about the traditional futures trading method (spec trades) for a few ticks/points. One should look at position sizing in the sense of risk vs. reward. Your position size should always be reflective of your a/c equity's risk tolerance (plus experience/success). I do know traders who trade 100+ lots from their home office. There shouldn't be any difference in the way you trade relative to your position size unless of course your throwing 4 figure lots around. But as a discretionary trader just looking to make a living, trading a 100 lot with a daily goal to be net positive of say 2 points will give you a gross amount of around $10,000 per day. I know many who are more than satisfied with that amount, lol.

Cheers,
PB

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sidney7g
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Lornz View Post
And yes, there are individual traders scalping that kind of size. At least there used to be, before the advent of HFT-programs...

I'm sorry if this comes off as a noob question, but what negative consequence does HFT have on the short term 2-3 point 100 contract trader. I mean, I know HFT might perpetuate down trends and thus make long term investors hesitant to put their money into the market, but i'd assume a trader could take advantage of this by shorting the down trend. Perhaps HFT creates more chaotic spontaneity or sideways movement compared to a few years ago. I just have no means for comparison because I've only been trading the futures market the past year. However, I've noticed in times of crisis for some reason or another when there is a lot of liquidity, and I assume HFT, the trending moves are more uniform. Maybe HFT picks up on large orders and tries to counter them pushing the market to a point where that large order gets stopped out and thus giving momentum to the counter movement?

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  #63 (permalink)
 sysot1t 
 
 
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sidney7g View Post
If you dumped something like 100 contracts on the table of an Emini index wouldn't this prevent you from scalping short term considering how much liquidity there is to match a few ticks/point or two? Perhaps, an automated trading bot would pick up on that block order and try to counter it as to pick up on the difference of synchronization with the ES or other related indices. I have no clue and have always wondered if its possible to do short term scalps trading 80+ contracts.

I've tried this sometimes with the sim, Seemed like there was a couple ticks of slippage but nothing serious at liquid times of day. However, I wouldn't use a Sim as any real evidence.

100 contracts is not a block... during the first half and last hours of the markets, when there are very little retail activity... you can swept the book and clear 10K with very little impact, at most losing a tick ... you can scalp 100 contracts without issues during those times, depending on your definition of scalping... and assuming you know what you are doing of course.

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 Lornz 
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sidney7g View Post
I'm sorry if this comes off as a noob question, but what negative consequence does HFT have on the short term 2-3 point 100 contract trader. I mean, I know HFT might perpetuate down trends and thus make long term investors hesitant to put their money into the market, but i'd assume a trader could take advantage of this by shorting the down trend. Perhaps HFT creates more chaotic spontaneity or sideways movement compared to a few years ago. I just have no means for comparison because I've only been trading the futures market the past year. However, I've noticed in times of crisis for some reason or another when there is a lot of liquidity, and I assume HFT, the trending moves are more uniform. Maybe HFT picks up on large orders and tries to counter them pushing the market to a point where that large order gets stopped out and thus giving momentum to the counter movement?

I wouldn't call 2-3 ES points scalping. I am no expert scalper, but I find the very short-term direction harder to read than before. When everybody and their grandmother is using sophisticated algorithms for order entries, it makes the tape harder to read. Reading the tape and using market internals used to be enough to extract a decent living in the good ol' days, but it's harder now. That being said, I find that the medium-term swings are much easier to trade. The algorithms often tend to flock, thus creaing more follow-through. I'm making more money and trade with less stress, so I guess it's a win-win...

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 kronie 
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kronie View Post

OH, and most importantly,

did you notice that no one ever confirmed whether or not this is hypothetical (i.e. waste of time discussion) or real or even near-real



I noticed, anyone else?

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 sysot1t 
 
 
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kronie View Post
I noticed, anyone else?

does it really matter if real? I believe more than likely is not real... first, the level of question.. really? $5MM and you are business savvy and you only target $5K a day on average? rather silly... second, anyone with that level of capital would have advisors and not waste their time trying to learn to trade when their current business already makes them rich, why start something anew when you are making a killing on something else? in any event, I responded not because I believe it was true or false, but rather because I saw the question as a valid one and more than likely if anyone ever gets to that level of capital they would then have an idea and recall what we all wrote back then...

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 MWinfrey 
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Reading this thread makes me wonder why I even bother attempting to develop a system, backtest it, forward test it on sim, forward test it live, and have any expectation of making any money.

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  #68 (permalink)
 cory 
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MWinfrey View Post
Reading this thread makes me wonder why I even bother attempting to develop a system, backtest it, forward test it on sim, forward test it live, and have any expectation of making any money.

well, only thing you can do with hypothesis account is making ...hypothesis money.

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 MWinfrey 
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cory View Post
well, only thing you can do with hypothesis account is making ...hypothesis money.

notice i included " forward test it live" in my list as well as the "hypothesis" part. i still stand by my comment.

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 Surly 
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Seems to me that the intent of the OP was simply to get some guidance on a simple system to make the return he wants. The OP (mistakenly) assumed that making the $3-5k per day on $5mm should be something that could be simply achieved. Another poster pointed out that this is around 20%-25% per year and I think this highlights the contradiction. The OP stated they wanted a "lock" - but the fact is, there is no such thing as a SIMPLE "lock" on a 20-25% roi on a yearly basis. Ask yourself - if there was a "lock" on that kind of return, what would the trading environment look like? IOW, what would the markets look like? That kind of return, IMHO, is just not something you can achieve without a considerable amount of work, experience, and SKILL.

The OP doesn't want to learn how to trade - he/she wants a methodology that uses a strategy that lies outside of directional trading.

@arbman1 - there is definitely good advice for you on this thread, I would summarize it as:

- you won't make that kind of return with a simple, fixed strategy without a lot of work beforehand (perhaps 3-5 years of work).
- Look into option spread strategies. Look into simple, fixed strategies like masterthegap.com but realize that you will have an incredibly high hurdle of "learning how to trade" to overcome before you can make money with a "simple, fixed system".
- If you want to learn how to trade - hire yourself a good coach and a good trading psychologist. I would recommend Jeff Quinto as a trading coach and Andrew Menaker as a trading psychologist. Then prepare yourself for a difficult but rewarding challenge that may last a long time but could also provide some of the your proudest moments of personal achievement.
- There are easier ways to achieve a consistent return on equity that would be available to you because of your equity - many have suggested these here. Also consider purchasing tax liens - most yield 18-20% and if you're smart about it you will have extremely low risk.

Good luck!

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 sysot1t 
 
 
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MWinfrey View Post
Reading this thread makes me wonder why I even bother attempting to develop a system, backtest it, forward test it on sim, forward test it live, and have any expectation of making any money.

not following the reasons for your conclusion.... care to elaborate?

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  #72 (permalink)
 MWinfrey 
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sysot1t View Post
not following the reasons for your conclusion.... care to elaborate?

Mainly because of the overwhelming nature of starting in the profession of trading which the first few pages very clearly summarized. The posts reminded me of that and all I was doing in my post was listing those things I have done, do on a daily basis, and will do in the future in an attempt to learn this craft. I venture to say if I'd known 6+ years ago what I know now, I probably would not have even attempted this venture. Hindsight is a wonderful thing or is it...

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  #73 (permalink)
 bluemele 
Honolulu, Hawaii
 
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sysot1t View Post
does it really matter if real? I believe more than likely is not real... first, the level of question.. really? $5MM and you are business savvy and you only target $5K a day on average? rather silly... second, anyone with that level of capital would have advisors and not waste their time trying to learn to trade when their current business already makes them rich, why start something anew when you are making a killing on something else? in any event, I responded not because I believe it was true or false, but rather because I saw the question as a valid one and more than likely if anyone ever gets to that level of capital they would then have an idea and recall what we all wrote back then...

That is from your perspective. I agree with this guy and he is smart in my opinion.

He is reaching out to unchartered territory. To me, I have lost money with 'advisors' as they are all a f-in joke. Ask your 'advisors' at where you work or who help you manage your assets to show you a balance sheet and P&L. You will see the line item on the P&L that shows "Commission" or "Services Rendered" as 99% of their income!

I know many many many people with much more than this sitting in a bank account who I call friends. So, your comment is a bit biased to your own world in my opinion.

If you read the thread, he had sold his law firm and had the bank to do something that he is wishing to make a small daily return for cashflow purposes. If you have been in this situation of not having cashflow in the past but a lot of cash you learn quickly how that cash can vacate your bank account over a few years and then your opportunity to purchase cashflow assets erodes.

I would be doing the same as him, reaching out to forums to pick people's brains because you only know what you know or think you know.

I know NO successful economists or bankers through their own investments who are the people you could easily access. My limited scope of thinking.

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  #74 (permalink)
 bluemele 
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MWinfrey View Post
Mainly because of the overwhelming nature of starting in the profession of trading which the first few pages very clearly summarized. The posts reminded me of that and all I was doing in my post was listing those things I have done, do on a daily basis, and will do in the future in an attempt to learn this craft. I venture to say if I'd known 6+ years ago what I know now, I probably would not have even attempted this venture. Hindsight is a wonderful thing or is it...

Interesting.... Never too late to wrap it up? ha-ha

People always think because they have too much into something that the can't "afford" to let it go. I wonder if that has/is what is keeping you going?

I enjoy your posts, enjoy your insight and this is something I think many traders feel and think occasionally.

Do you ever feel you will be profitable? If so, when?

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  #75 (permalink)
 MWinfrey 
Lubbock TX
 
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bluemele View Post
Interesting.... Never too late to wrap it up? ha-ha

People always think because they have too much into something that the can't "afford" to let it go. I wonder if that has/is what is keeping you going?

I enjoy your posts, enjoy your insight and this is something I think many traders feel and think occasionally.

Do you ever feel you will be profitable? If so, when?

I appreciate your comments. You're right...never too late. It's just that I keep thinking "it's" just around the corner. I actually think my mechanical system puts me closer than I've ever been. But I won't know until I know. I wish I could say when but I really can't.

Also, I'm still doing the discretionary price action trading which is a pretty slow process as well.

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  #76 (permalink)
 kronie 
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sysot1t View Post
does it really matter if real? I believe more than likely is not real... first, the level of question.. really? $5MM and you are business savvy and you only target $5K a day on average? rather silly... second, anyone with that level of capital would have advisors and not waste their time trying to learn to trade when their current business already makes them rich, why start something anew when you are making a killing on something else? in any event, I responded not because I believe it was true or false, but rather because I saw the question as a valid one and more than likely if anyone ever gets to that level of capital they would then have an idea and recall what we all wrote back then...

on Elitetrader.com, many brokers prospecting for business would start these go-no-where threads,

just to pre-screen their most desired customer types, as if we traders waste our time during the day talking to other losers parading around as prospective new accounts with a magic $25,000 to open an account charging $1,500 day trade margins at $15 round-turn,

no, this was not a real proposition or thread, its another prospecting site, and as such should receive the same banning as others have received for doing such or violating the futures.io (formerly BMT) rules


look at how much discussion trapped so many others with viewpoints that really don't add up to anything, because the premise, the thesis, the opening of the thread was all bogus to begin with.....

aren't we supposed to be making a living from trading, and not wasting time, unless...

some aren't making money and are losing traders....

hmmmm, might paying more focused attention to one's trade craft solve that losing equation and turn it around to being a winning trader?



just a thought......

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 bluemele 
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kronie View Post
on Elitetrader.com, many brokers prospecting for business would start these go-no-where threads,

just to pre-screen their most desired customer types, as if we traders waste our time during the day talking to other losers parading around as prospective new accounts with a magic $25,000 to open an account charging $1,500 day trade margins at $15 round-turn,

no, this was not a real proposition or thread, its another prospecting site, and as such should receive the same banning as others have received for doing such or violating the futures.io (formerly BMT) rules


look at how much discussion trapped so many others with viewpoints that really don't add up to anything, because the premise, the thesis, the opening of the thread was all bogus to begin with.....

aren't we supposed to be making a living from trading, and not wasting time, unless...

some aren't making money and are losing traders....

hmmmm, might paying more focused attention to one's trade craft solve that losing equation and turn it around to being a winning trader?



just a thought......

Interesting!!!! Maybe... Pretty smart approach...

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 sysot1t 
 
 
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bluemele View Post
That is from your perspective. I agree with this guy and he is smart in my opinion..

I dont think any replies or posts are without their own limited perspective, even your reply is from your own limited perspective as well..


bluemele View Post
He is reaching out to unchartered territory. To me, I have lost money with 'advisors' as they are all a f-in joke. Ask your 'advisors' at where you work or who help you manage your assets to show you a balance sheet and P&L. You will see the line item on the P&L that shows "Commission" or "Services Rendered" as 99% of their income!

I know many many many people with much more than this sitting in a bank account who I call friends. So, your comment is a bit biased to your own world in my opinion.
.

here is what I know... there are different levels of "money" which provides access to advisors that most people (even those with $20M) dont ever get to work with... those advisors are called: money managers.

retail advisors make their money with commissions... actual money managers, which is what I think of when I think advisor, make their money based on the performance... perhaps I should have been more clear... but I think my first response to the OP made it clear that I was referring to money managers. They will have no issues showing you a P&L, specially because that is how they get paid.


bluemele View Post
If you read the thread, he had sold his law firm and had the bank to do something that he is wishing to make a small daily return for cashflow purposes. If you have been in this situation of not having cashflow in the past but a lot of cash you learn quickly how that cash can vacate your bank account over a few years and then your opportunity to purchase cashflow assets erodes.
.

huh, what thread? oh wait, you are making the assumption that I am going to go and research an OP just because he posts... I base my responses on this threads comments, and so we are clear.. my point, since you have missed it... it has to do with "it doesnt matter if real or not"... it is irrelevant to provide thoughts on what is being asked since in the end, it is nothing that the oppinion of the individual participants.

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  #79 (permalink)
 sysot1t 
 
 
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kronie View Post
on Elitetrader.com, many brokers prospecting for business would start these go-no-where threads,

just to pre-screen their most desired customer types, as if we traders waste our time during the day talking to other losers parading around as prospective new accounts with a magic $25,000 to open an account charging $1,500 day trade margins at $15 round-turn,

no, this was not a real proposition or thread, its another prospecting site, and as such should receive the same banning as others have received for doing such or violating the futures.io (formerly BMT) rules


look at how much discussion trapped so many others with viewpoints that really don't add up to anything, because the premise, the thesis, the opening of the thread was all bogus to begin with.....

aren't we supposed to be making a living from trading, and not wasting time, unless...

some aren't making money and are losing traders....

hmmmm, might paying more focused attention to one's trade craft solve that losing equation and turn it around to being a winning trader?



just a thought......


wait, didnt @ bluemele said the dood was a "retired" attorney that sold his business for lots of cash?

first, I dont frequent EliteTrader... I personally believe most sites dont add much value... so I dont take much of anything serious from any site... in the end, if we cant go on and rant sometimes about what we think, what is the point, right? (thought borrowed from @Lornz ) anyhow, I only frequent this site to disconnect my mind... like right now, I am watching UFC fights re-runs since I am sick with the flu, and I felt like multitasking...

btw, that is not to say that I havent come across some people who are actually trading within this site that I keep in touch with and share ideas back and forth... but in reality, we are talking about 2-3 guys that are serious, it is rather easy to see the posers once you remove the forum and start working with them on a one on one basis discussing ideas.

now, though I dont make my living off trading... since I dont need to ... I do agree with you that most people just post and waste a lot of time trying to add value and build their own confidence by posting a lot or writing lots of indicators that dont really show much of anything new, to escape or never face having to trade.. after all, they are great traders on their mind...

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  #80 (permalink)
 sysot1t 
 
 
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MWinfrey View Post
I appreciate your comments. You're right...never too late. It's just that I keep thinking "it's" just around the corner. I actually think my mechanical system puts me closer than I've ever been. But I won't know until I know. I wish I could say when but I really can't.

Also, I'm still doing the discretionary price action trading which is a pretty slow process as well.

Mike, I will give you the advice that was given to me that opened up my trading... you are welcome to ignore it or not... disregard PA and all the other BS that is promoted on this forum or any others... focus on intermarket trading(aka spreads), everything else is just risk management... yes, trading spreads requires proper capital ($25K-100K depending on what you trade) but then again, trading with a $5K-10K account wont get you a living... and neither will $25-$50K (unless you live on a really low cost state and all your things are paid off)...

anyhow, many ways to skin the cat... am sure others swear by PA and all that... but I rather trade spreads (or my basterdize version of it) and use TA as an aid...

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  #81 (permalink)
 MWinfrey 
Lubbock TX
 
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sysot1t View Post
Mike, I will give you the advice that was given to me that opened up my trading... you are welcome to ignore it or not... disregard PA and all the other BS that is promoted on this forum or any others... focus on intermarket trading(aka spreads), everything else is just risk management... yes, trading spreads requires proper capital ($25K-100K depending on what you trade) but then again, trading with a $5K-10K account wont get you a living... and neither will $25-$50K (unless you live on a really low cost state and all your things are paid off)...

anyhow, many ways to skin the cat... am sure others swear by PA and all that... but I rather trade spreads (or my basterdize version of it) and use TA as an aid...

Looks like we have sort of deviated off topic but not really. The OP is researching ways to invest his money and this certainly goes toward that discussion even though it's specific to my situation.

Wow...sounds like I lead a deluded life along with the vast majority of those who claim to make money trading futures. Makes me wonder about all those who actually make a living trading...I have to say I'm getting a bit frustrated by all this conversation about making a living versus not making a living trading. I don't know what or who to believe any more. Like I said earlier, I've been doing this for over 6 years so I'm not a newbie. However, I've listened, studied, researched, implemented, and BELIEVED a few of you. What's a guy to do?

I don't have $25-$50K (the low end of your example) that I care to risk like that.

The good thing is that all the debt I currently have is a mortgage and RV payments. Those will be paid off next month leaving me completely debt free. I guess I need to be completely honest. My wife has a student loan at 3% interest. I'm leaving that one alone. Doesn't make sense to pay that one off at the expense of something else.

I started looking at spreads last week but haven't gotten very far yet. Still in it's infancy. But based on your comments it sounds like that isn't an option for me either.

So, maybe I really do need to chuck this part of my life and move on to being a greeter as Walmart. Too old to be an attractive hire as an IT guy.

Now for a comment direct to the OP...My thought about your original question is you won't get a good answer in this forum because you don't have the complete context behind the answer being offered and further you will get answers that span the complete spectrum of possibilities. So, you're no better off than when you asked the question. Sorry but that is the truth as I've experienced it in this forum along with all the others I've participated in and this forum is by far the best one I've participated in.

sysot1t, I truly appreciate your comments and please don't think otherwise. I value your comments in this thread as well as all of your's throughout this forum. It's just that I have become a bit cynical of late and questioning my ability to do this any longer and wondering if I don't, what will I do?

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 wldman 
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First Mike, a friend in here tells me you are a veteran of military service, so I thank you for that service and will both remain grateful and teach my children to be grateful that they where born in the greatest nation on earth.

I too get frustrated with some of the things I see posted and with the relative certainty of the posters. Don't give up Mike.

We also do not know the context of the original post or if the question was "leading". Perhaps the OP is more sophisticated than some responders are giving credit for. I'm sure if someone really cared they could check the facts ...but why invest the time? What we can do though is evaluate with an open mind everything that passes here. We can retain what is valuable to each of us based on our own standards, emperical or theoretical, and we can let pass without harm that which is not valuable.

I would like to contact you about your adaptive cci, it is close to what I was looking for but not exactly, so I'd like to learn how and why you created it. All the best to you Mike. DB

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  #83 (permalink)
 cory 
the coin hunter
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sysot1t View Post
Mike, I will give you the advice that was given to me that opened up my trading... you are welcome to ignore it or not... disregard PA and all the other BS that is promoted on this forum or any others... focus on intermarket trading(aka spreads), everything else is just risk management... ...

strong assessment and of course its 100% wrong.

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 sysot1t 
 
 
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MWinfrey View Post
Looks like we have sort of deviated off topic but not really. The OP is researching ways to invest his money and this certainly goes toward that discussion even though it's specific to my situation.

OP hasnt been back, maybe @ kronie was right...


MWinfrey View Post
Wow...sounds like I lead a deluded life along with the vast majority of those who claim to make money trading futures. Makes me wonder about all those who actually make a living trading...I have to say I'm getting a bit frustrated by all this conversation about making a living versus not making a living trading. I don't know what or who to believe any more. Like I said earlier, I've been doing this for over 6 years so I'm not a newbie. However, I've listened, studied, researched, implemented, and BELIEVED a few of you. What's a guy to do?

I don't have $25-$50K (the low end of your example) that I care to risk like that.

The good thing is that all the debt I currently have is a mortgage and RV payments. Those will be paid off next month leaving me completely debt free. I guess I need to be completely honest. My wife has a student loan at 3% interest. I'm leaving that one alone. Doesn't make sense to pay that one off at the expense of something else.

IMO, and keep in mind what works for me doesnt work for you or anyone else.. ) disclaimer there just in case...

I have been trading since I was 19, my first trade was DIS @ 124... 200 shares... all my money back then... stupid kid should have bought AAPL or MSFT... anyhow, am 35 now.. and been doing this for a long time, yet I still consider myself a newbie.. I have actually learned more in the past 2 years that I decided to take things more seriously when I was forced to look at futures and ETF's because of work rules being enforced.

I dont care to make a living off trading... I make my money for living off my work and I am well compensated... I see trading as a way to augment my retirement(I dont want to work forever for someone else) and increase my assets.. there are psychological issues with making a living off trading for me, I have not worked out those demons yet... and I have a natural ability for what I do for a living, so that is my money maker.. wont make me rich, but then again.. being rich is a matter of perspective..

as to trading and account size... one should always risk only what one is willing to lose... which means, it cant impact you financially... period... you should be able to take that money and blow it off on a single day, single bet, and not care, if you cant do that... then that is not at risk money... and you shouldnt trade with it.. be comfortable with what you risk above all things, or else ... you trade scared and mistakes happen.

the reality is, well at least my own reality, that to make a living you need a sizeable account ($500K IMO) and since I dont have that, I dont care to "make a living", but then again that is because I need at a minimun $100K a year to live off... but that is just me... I dont expect to return 50%-100% off my account, but rather 20-30%...

You are ahead of the curve, with mortgage paid off and only actual living costs... I say, sit down and determine your living costs plus 50% and then know what you need to burn monthly (you might already have done all that) and based on that number you get your annualized rate from which you can determine the account size needed and start working towards building that account size while trading small, etc.


MWinfrey View Post
I started looking at spreads last week but haven't gotten very far yet. Still in it's infancy. But based on your comments it sounds like that isn't an option for me either.

So, maybe I really do need to chuck this part of my life and move on to being a greeter as Walmart. Too old to be an attractive hire as an IT guy.

with spreads, I like my ratios to be exact, for example: S&P 500 vs. STOXX50 that is to me a 21:26 ratio.. which requires $23500 (47 contracts) in margin if using Velocity for example.. someone who does not recognize custom spreads and goes by the outright legs.. you could very well trade a 4:4.95(rounded to 5) spread for 9 contracts or $4500 in margin with a $10K account... for me a min of $50K account would be required based on my own risk parameters of only 50% of the account at play.. those risk parameters allow me to sleep at night and if I lost 2% in a day, I am ok with it... I still have more "hands" or days left to play with.

you could trade spreads with $5K, but I say $10K is better... just determine your risk management.. that is 80% of the whole trading game ... know the following... institutational traders, they all use the same strategies, they all have access to the same research (for the most part) ... their only differences are: 1) how they interpret the data determines the view they wish to express, 2) their risk management parameters, determined based on those views and their assets.. this is truth, and has been my experience from working with actual traders at large investment banks, and small hedge funds ($5Billion+ funds).. it is always about managing your risk...


MWinfrey View Post
sysot1t, I truly appreciate your comments and please don't think otherwise. I value your comments in this thread as well as all of your's throughout this forum. It's just that I have become a bit cynical of late and questioning my ability to do this any longer and wondering if I don't, what will I do?

so you have finally reached a crossroad... and what you do next is critical... and you already know what you want to do.. so just follow your gut and instinct.. evaluate it all, and then go from there... only you know what is best for you.

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  #85 (permalink)
 sysot1t 
 
 
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cory View Post
strong assessment and of course its 100% wrong.

again, as I said before... what works for me, doesnt work for all... so "wrong" is a matter of perspective... if PA works for you consistently, that is great... stick to it @ cory, is not like anyone is suggesting that you should change or switch.. and also, if I am so "wrong"... please feel free to state your case, after all... Mike is the one who needs the help.. so your argument is bound to help him if substantiated.

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 sysot1t 
 
 
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MWinfrey View Post
So, maybe I really do need to chuck this part of my life and move on to being a greeter as Walmart. Too old to be an attractive hire as an IT guy. ... wondering if I don't, what will I do?

btw, there are lots of opportunities within IT still, specially in the storage management side.. and with NETAPP as a technology in specific... if you wanted to take a look at that, just let me know and I can share some of the training I took years ago (it hasnt changed much since) .. you can download their simulator, learn the NTAP OS and how all features work (replication, deduplication, vaulting, etc) and then go for NCDA/NCIE and get a job supporting NTAP remotely from home or doing migrations consulting for someone like TekSystems (for example) and you can easily make $60K-$120K a year depending on the contract and the duration, etc...

you have my email, feel free to use it if interested, I gain nothing but the satisfaction of helping someone in need...

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  #87 (permalink)
 cory 
the coin hunter
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sysot1t View Post
again, as I said before... what works for me, doesnt work for all... so "wrong" is a matter of perspective... if PA works for you consistently, that is great... stick to it @ cory, is not like anyone is suggesting that you should change or switch.. and also, if I am so "wrong"... please feel free to state your case, after all... Mike is the one who needs the help.. so your argument is bound to help him if substantiated.

of course you do what work for you but to call PA BS is a bit much, one just have to look around to find cj booth thread, perry thread or jwdixon thread to see PA is viable and profitable.

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 sysot1t 
 
 
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cory View Post
of course you do what work for you but to call PA BS is a bit much, one just have to look around to find cj booth thread, perry thread or jwdixon thread to see PA is viable and profitable.

hmmm... read my post again, I specifically kept PA outside of the BS part... also, PA requires a certain degree of "interpretation"... I dont have to worry about that with doing spreads... but as I said, TA is still needed..

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  #89 (permalink)
 sysot1t 
 
 
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arbman1 View Post
Appreciate the post/feedback. Sorry for the discrepancy in numbers, I meant to post 3-5k per day, 15 to 25k per week.

I sold an arbitration/lawfirm last year. Own real estate, other assets, diversification, ETFs etc, but am looking for something hands on. Something to excel at without getting fleeced.

Thanks again,

J

I just saw this, since @bluemele mentioned it and I figure that perhaps I missed something and I re-read the whole thread...

if all you need is something to do that wont drive you made with uncertainty... then just look at options ... and a good mentor to help you with it is Dan Sheridan... I have taken his mentoring, and I use the knowledge taught whenever I see opportunities on the Index Based & Commodities ETF's since that is all I am allowed to trade... it will take you some time to become proficient, at least a year, you wont start with $5MM, but with $50K portfolio... and once proficient, you can scale it to $5M ... it is very hands on, yet not time consuming, depending on your timeframe...

that is another option rather than focusing on trading futures..and best of all, your risks are defined and can be controlled quite easily.

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tylerldurden
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Put $4MM into a short term treasury, Short term investment grade bond fund or GNMA fund . Take the 1MM and see what you can do trading. VFIJX, VFSUX, VFIRX

The bond funds can return you in the neighborhood of $800-1000/day (assuming 254 annual trading days and 4-5% Total return).

If you have bad day trading you have the backstop of some positive pnl from the fixed income.

I am assuming $5MM in all investment assets and not just your "funny money" trading account.

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  #91 (permalink)
 Lornz 
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@kronie
Does it matter if the OP is serious or not? Isn't the topic valid regardless?

@cory
I wouldn't say that Perry CJ Booth uses PA. I've always categorized PA as a clean chart and the tape and/or DOM..

There are several ways of making money in the markets, but some lend themselves more to objective systems than others. E.g., mathematical/statistical models... @sysot1t mentioned spreads...

Personally, I think every indicator one puts on a chart is completely worthless. I think being able to trade off a chart is a genetic trait, and no other indicators than order flow are needed.
The problem with TA is that one can have long streaks of winning trades just by luck, and this might fool the practitioner into thinking he is on to something. Charts are good for quickly seeing important levels and getting an overview of what's happening, but I've yet to see anyone master them on a micro level. The markets aren't necessarily random, but they certainly appear too chaotic to being decipherable by using bar charts on the micro level...

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 Lornz 
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Posts: 1,198 since Apr 2010

@MWinfrey

If you have been at this for so long without succeeding, I would say that intraday discretionary trading is not for you. Most that have an aptitude for such trading, usually succeed fairly quickly. They only need to refine their risk/money/trade management...

If you are trying to build an automated systems, I would rather spend my time pursuing math and statistics rather than spend countless hours backtesting with Ninjatrader.

I will probably get some negative responses to this post, but I've yet to meet someone who actually have been successful doing so. But I have been around successful order flow traders, macro traders and traders employing statistical models. It seems most posters on message boards are losing money, although many lie about it. Trust no one, not even me...

This leads me to my final point, why would an unprofitable trader give advice in this thread?
It escapes me why someone would have so little regard for other's well-being that they would give advice they are unsure if works themselves... When I first started trading, I did not make a post for several years. I spent my time reading and researching. It seems that many start in the other end...

And before I sign off, I will say that there are a few ways to make easy money: Sell options or put up a moving average, VWAP or similar with SD bands on your charts. Or you could find a seemingly correlated pair/spread. "Reversion to the mean - it works until it doesn't"
You could actually become wealthy doing so, though; Several lucky fools have gotten rich by selling options (riskier than they thought) at the right time...

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  #93 (permalink)
 wldman 
Market Wizard
Chicago Illinois USA
 
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please do.

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  #94 (permalink)
 cory 
the coin hunter
virginia
 
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Lornz View Post
...

@cory
I wouldn't say that Perry CJ Booth uses PA. I've always categorized PA as a clean chart and the tape and/or DOM..
...

if your eyes glue to panel 1 where price bars reside then you do PA.

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  #95 (permalink)
 Lornz 
Oslo, Norway
 
Experience: Advanced
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wldman View Post
please do.

Is that supposed to constitute a valid counterargument to my honest opinion?

I thought this was a discussion forum?

But you are right, I apologize for trying to allude to actual objectively proven methods. What was I thinking...

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  #96 (permalink)
 Lornz 
Oslo, Norway
 
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cory View Post
if your eyes glue to panel 1 where price bars reside then you do PA.

Ok, I guess that is a question of semantic nature. I would classify PA as order flow and/or tape reading coupled with a clean chart (if at all), otherwise I don't see the difference between that and TA.

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  #97 (permalink)
 bluemele 
Honolulu, Hawaii
 
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Lornz View Post
@MWinfrey

If you have been at this for so long without succeeding, I would say that intraday discretionary trading is not for you. Most that have an aptitude for such trading, usually succeed fairly quickly. They only need to refine their risk/money/trade management...

If you are trying to build an automated systems, I would rather spend my time pursuing math and statistics rather than spend countless hours backtesting with Ninjatrader.

I believe where most people end up spending years:

1. Typically part-time, try this for a little while, try that for a little while. Not really full time and not focused on a single strategy or technique. Kind of learning everything about everything.

2. They want to be mechanical traders with no decision making. Blue light LONG, red light SHORT.

3. They think that a current system they have found works works works, then the market conditions change and they go NEXT... (There goes 5-8 months per...)

4. They attend different chat rooms and snake charmers lure them here then there then they discover none of them work.

5. Then they go back to constantly refining refining, then they change instruments a couple times.

6. Then they give up for a while, slow down, look at charts occasionally.

7. Then they are at 5-10 years and they are still unprofitable.

I think you are 100% right that any of those systems work and I too have seen them profitable. I myself started down the path and still dabble a little for fun in each of those.

I am coming to realize that the key thing is knowing your instrument and sticking to your setup. Kind of a do or die scenario. Not picking on MWinfrey and this is out of the context of this thread, but I wonder how many guys are like him or honest like him and if there is a way to get them redirected and focused on the right path so in 2 years he can make it.

I think most traders that I have seen that are profitable don't do it in 2 years or less or at least I just haven't seen them. I still believe that is an anomaly. I currently believe that most truly consistent and confident traders are 3 years plus, but of course that all depends on background, mental ability, choices etc...

Take this for what it's worth as the longest stretch of profitability I have ever had was 6 months as a technical trader! And, I am currently on SIM!

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  #98 (permalink)
 sysot1t 
 
 
Posts: 1,176 since Nov 2009


Lornz View Post
Is that supposed to constitute a valid counterargument to my honest opinion?

I thought this was a discussion forum?

But you are right, I apologize for trying to allude to actual objectively proven methods. What was I thinking...

ignore those of little substance adding no value to the discussion ... that is what I do anyhow... I think a number of people here dont have an idea of what an argument is..

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  #99 (permalink)
 sysot1t 
 
 
Posts: 1,176 since Nov 2009


cory View Post
if your eyes glue to panel 1 where price bars reside then you do PA.

by that argument, you validate @Lornz... the argument being, the charts should be clean... so if you glue your eyes to the panel 1 paying attention to the bars.. then all other indicators should be removed... as they would be distraction and nothing more.

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  #100 (permalink)
 sysot1t 
 
 
Posts: 1,176 since Nov 2009


bluemele View Post
I am coming to realize that the key thing is knowing your instrument and sticking to your setup. Kind of a do or die scenario.

we finally agree!! ... with one caveat.. sticking to one's setup (when that setup has no basis or foundation or basically no change of ever being even remotely profitable) is suicidal at best... so I would say, learning the instrument, finding a setup that works and then sticking to its probabilities without changing, and doing the homework/hardwork part... there is nothing in this business without hardwork (or any business) and by that I dont mean killing yourself learning something (it should be innate or otherwise you wont succeed at it and it is best to find something else to make you $$$) but using the time wisely to learn and being diligent about it.

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