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How I Trade For a Living
Started:August 30th, 2016 (10:48 AM) by rocksolid68 Views / Replies:48,696 / 662
Last Reply:November 7th, 2016 (02:55 PM) Attachments:94

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How I Trade For a Living

Old October 14th, 2016, 01:27 PM   #321 (permalink)
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qqqdog View Post
Just read your whole journal. Great stuff! I will try to attend Monday's trade room.

I'm fairly new to the forum and trading in general. I've been learning and trading Sim for about 6 months now. One thing I'm struggling with is managing my time between school and trading. Do you have any advice on how to balance your time between school and trading?

It all depends, what kind of school are you in? College, highschool, etc.?

Also, thanks

     

Old October 14th, 2016, 01:40 PM   #322 (permalink)
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rocksolid68 View Post
It all depends, what kind of school are you in? College, highschool, etc.?

Also, thanks


College, I'm studying computer engineering. Thankfully I don't have class until 1 most days so I get a little bit of trading in. I miss summer when trading was my life.
However, the finance club here is awesome. We have a couple full time traders coming in to speak with us today. We have a Bloomberg terminal also��

     
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Old October 14th, 2016, 02:31 PM   #323 (permalink)
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rocksolid68 View Post
Coming from someone that has failed over a dozen of them, I have a few tips for you.

Not sure when I will get a chance to have a good crack it but some great advice, cheers

     
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Old October 14th, 2016, 03:00 PM   #324 (permalink)
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qqqdog View Post
College, I'm studying computer engineering. Thankfully I don't have class until 1 most days so I get a little bit of trading in. I miss summer when trading was my life.
However, the finance club here is awesome. We have a couple full time traders coming in to speak with us today. We have a Bloomberg terminal also��




That's awesome! I too don't have class till later in the afternoon everyday. I made sure that I could trade :P
@bobwest and I had a conversation about this very topic. He was very wise with his words. If he doesn't mind, I would love if he gave you the same advice he gave me.




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Old October 14th, 2016, 03:02 PM   #325 (permalink)
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Futures Edge on FIO

Are you a NinjaTrader user?

 

rocksolid68 View Post
Did you like it here? Most people do not like the Winters here

As far as the arbitrage goes, I feel that it still is a good term for it.

What I am doing is finding a correlation, and finding which is trading at a discount.

Example:

ES, ZB, and GC are all trading in tandem. They are all looking fairly bullish today.

ES is at its day high, GC is making new highs, and ZB is halfway to its day high.

Since these are all moving together, and they are all making bullish moves, I want to trade them long. Which one though? Well, the cheapest one! This one is ZB in the example.


If they are all moving together, people want the one with most yield. If ZB is due for an up move and is still cheap, people will want to buy that one higher to match its companions.

Does this make a little more sense?

(PS. I love the anecdotal pieces in your posts. Really is awesome. Glad to have you sharing with us )


Well that sums ur plan for those instruments up really easy. Makes sense too

     
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Old October 15th, 2016, 02:58 PM   #326 (permalink)
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With regards to Topstep, whats your thoughts on it being a $150,000 account?

Its more like trading an account that is your Max Draw Down + Margin?

Not saying you should, but you could trade an equivalent account of 15 contracts with less than $20k

     

Old October 15th, 2016, 07:56 PM   #327 (permalink)
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fiftyeight View Post
With regards to Topstep, whats your thoughts on it being a $150,000 account?

Its more like trading an account that is your Max Draw Down + Margin?

Not saying you should, but you could trade an equivalent account of 15 contracts with less than $20k

That will never work in the real world. Realize that when you pull the trigger on a 15 lot you are already down $700-1000 in that moment- this is a hard reality to face but it's true. The idea of margin ability vs account size is ridiculous IMO for those who attempt to exploit it

     
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Old October 16th, 2016, 08:41 AM   #328 (permalink)
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fiftyeight View Post
With regards to Topstep, whats your thoughts on it being a $150,000 account?

Its more like trading an account that is your Max Draw Down + Margin?

Not saying you should, but you could trade an equivalent account of 15 contracts with less than $20k


Inletcap View Post
That will never work in the real world. Realize that when you pull the trigger on a 15 lot you are already down $700-1000 in that moment- this is a hard reality to face but it's true. The idea of margin ability vs account size is ridiculous IMO for those who attempt to exploit it

I don't want to pile on here, but I agree with @Inletcap.

I take @rocksolid68's point as simply: keep your risk of blowing out your account to a minimum by taking the largest available account, and then use way, way fewer contracts than you're allowed. You're just using the higher loss limits of the larger account to give you more leeway, but don't load up on leverage. Use something like 2 contracts. (Which I think he says somewhere is about the size he used.) That lets you stay calm and trade without excessive risk, and succeed slowly.

Otherwise, the math will destroy you. At 15 contracts, 1 point in ES is worth $750. This is a fair amount of money to see evaporate due to nothing more than little twitches in price that don't mean anything. As an extreme example, we do see brokers who advertise less than $500 per contract day trade margin. That would let you have an account with less than $7500 in margin for 15 contracts. But a 1-point loss (-$750) would be 10% of the account; a 4-point loss would be $3,000, 40% of the account.

Even taking the max Combine size of 150,000, your 4-point loss of $3,000 is a big chunk of change. But with 2 contracts, it's $400. Much better.

There are practicality issues involved with using very large size, compared to your loss tolerance. Keep the size down. Leverage cuts two ways.

Bob.

     
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Old October 16th, 2016, 09:06 AM   #329 (permalink)
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Thanks for the replies and everything is taken on board.

I currently trade a small account so I am learning how damaging big swings can be.

I was not suggesting that someone should trade this way


fiftyeight View Post
Not saying you should, but you could trade an equivalent account of 15 contracts with less than $20k

More assessing if the combine will work for me. I have been reading reviews recently and quite a few reviews have mentioned that the possibility of extra size is not worth the effort. A few different reasons are given but include that with the max draw down you should not be trading 15 contracts anyway.

If I take the $150k combine so I can trade 2 or 3 contracts I am not sure I see much value. I will have to achieve $9k profit in sim mode which would be much better in my own account without the fees and rules. That $9k profit will give me enough bankroll to add another contract to my current size.

     

Old October 16th, 2016, 11:17 AM   #330 (permalink)
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fiftyeight View Post
Thanks for the replies and everything is taken on board.

I currently trade a small account so I am learning how damaging big swings can be.

I was not suggesting that someone should trade this way



More assessing if the combine will work for me. I have been reading reviews recently and quite a few reviews have mentioned that the possibility of extra size is not worth the effort. A few different reasons are given but include that with the max draw down you should not be trading 15 contracts anyway.

If I take the $150k combine so I can trade 2 or 3 contracts I am not sure I see much value. I will have to achieve $9k profit in sim mode which would be much better in my own account without the fees and rules. That $9k profit will give me enough bankroll to add another contract to my current size.

I was just giving my opinion since I have been down that same road.

You are looking at the 150k combine as a means of having future leverage. Don't. Do not worry about the 150k = 15 contracts. That shouldn't matter. Only the drawdown.

If you are able to churn out $9,000 in profit guaranteed, why are we having this conversation? The reason we are is because you CAN'T. Nobody can make $9,000 in profit guaranteed. So, since you can't do that for sure, you need to protect your downside. That is where the wiggle room of a $3,000 draw down comes into play.

I would be very interested in watching you do a $30k combine! Or watch you make $9,000 easily. Start a journal so we can follow your decision and see how it plays out!

What I am trying to say is that you are worrying about the upside potential. If that is what you are worried about, you already made it. Forget the combine and start a hedge fund. However, you are realistic and know that you will lose (and lose a lot if you have no edge), you want to give yourself the best odds of beating the combine, which is giving yourself enough room to lose and win without blowing it.

     
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