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Making a Living with the Micros


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Making a Living with the Micros

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  #101 (permalink)
 lesterb 
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@sstheo, you may be interested in the spreadsheet that I posted in the download section. It allows you to input a number of different variables to see how they impact growing an account.


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  #102 (permalink)
 MNSTrading 
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sstheo View Post
We are each upon our own Trader's Odyssey, and these companies are sexy sirens, singing seductive songs, and almost securing our demise upon the rocks. Odysseus had his men tie him to the mast so he would not succumb to the wild temptations.

In this bewitching scene from "O Brother, Where Art Thou?" the sirens sing "Go to sleep, you little baby"

Very seductive, I'll admit. Fortunately, I'm a Dapper Dan man.
Completely agree about building from scratch BTW.



images

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  #103 (permalink)
 sstheo 
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@sstheo, you may be interested in the spreadsheet that I posted in the download section. It allows you to input a number of different variables to see how they impact growing an account.


Great stuff. Thanks Lester!

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  #104 (permalink)
 sstheo 
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MNSTrading View Post
Very seductive, I'll admit. Fortunately, I'm a Dapper Dan man.
Completely agree about building from scratch BTW.



images

HAHAHAHA. How is this?

"But building from scratch takes so long! Come, come play with us instead. Listen to the sound of the gentle waves lapping upon the shore. Don't mind those rocks there, they are not too sharp. Hear my sweet melodies. Bask in my song. Feel the sand between your toes. Let the sun warm your skin and feel my hands applying the lotion to your strong chest... Sorry about the nip slip there, I will cover up again."

We are in this for the long haul... Must say "no" to the temptress of "free" money... newbies and experienced traders alike.

I know some of these companies advertise on this site, and I am not accusing anyone of any fraud or maliciousness. The fact remains that most traders fail and would be better served by trying to intelligently trade the micros, which is the WHOLE point of my journal.

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  #105 (permalink)
 MNSTrading 
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sstheo View Post
HAHAHAHA. How is this?

"But building from scratch takes so long! Come, come play with us instead. Listen to the sound of the gentle waves lapping upon the shore. Don't mind those rocks there, they are not too sharp. Hear my sweet melodies. Bask in my song. Feel the sand between your toes. Let the sun warm your skin and feel my hands applying the lotion to your strong chest... Sorry about the nip slip there, I will cover up again."

We are in this for the long haul... Must say "no" to the temptress of "free" money... newbies and experienced traders alike.

I know some of these companies advertise on this site, and I am not accusing anyone of any fraud or maliciousness. The fact remains that most traders fail and would be better served by trying to intelligently trade the micros, which is the WHOLE point of my journal.

Absolutely. You have just written the jingle. Janet Jackson is on line 1.

I have mixed feelings about prop trading like I have mixed feelings about Bitcoin. The last webinar was with one of the sponsoring companies and he made some excellent points about having structure and access to professional development. But in the end maybe it trains you to rely on a guru, and trading style a very personal thing. I am a trend trader and the guy who taught me was a scalper. the trading universe is brilliantly scaled. You can trade anything from one share of Kodak to all the coffee in Brasil. It is delicate to navigate, I'll allow, and you have to really work to understand the details of the job but its part of the work and very much worth it in the end, I believe.

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A small boy with a wooden spade
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  #106 (permalink)
 sstheo 
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MNSTrading View Post
Absolutely. You have just written the jingle. Janet Jackson is on line 1.

I have mixed feelings about prop trading like I have mixed feelings about Bitcoin. The last webinar was with one of the sponsoring companies and he made some excellent points about having structure and access to professional development. But in the end maybe it trains you to rely on a guru, and trading style a very personal thing. I am a trend trader and the guy who taught me was a scalper. the trading universe is brilliantly scaled. You can trade anything from one share of Kodak to all the coffee in Brasil. It is delicate to navigate, I'll allow, and you have to really work to understand the details of the job but its part of the work and very much worth it in the end, I believe.

I am really looking forward to your conclusion coming to fruition in my own life: "very much worth it."

I am convinced that the prop firms make most of their money on fees. Why? Because I know at least two of them keep "live" accounts on a proprietary sim for a very, very long time. They have stats to show that most live traders will blow up with "live money", so their risk is so low...

The thing about the guru is so real, as I shared in one of my early posts " No More Mommy." It took me years to disconnect from the milk.

And I still want someone to hand me trades. But I resist. And it is working. Hard work, yes. But getting easier.

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  #107 (permalink)
 Sandpaddict 
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sstheo View Post
My consistency has vastly improved over the past year, thanks - at least enough to publicly post on FIO... (I am not yet perfectly disciplined, as Wednesday proved to me. I should have walked away when I was out of sync with the market.) I routinely get about 1% per day. If I can just keep the drawdowns at bay, my initial $12,000 will become $100k by next spring.

Addressed to all readers:

I agree that all the funding companies are BS. They are drug pushers, preying on the "free money" Greed Gland inside all of us.

When Homer wrote the epic poem "The Odyssey" around 1000 BC, he must have known about TST and the rest!

We are each upon our own Trader's Odyssey, and these companies are sexy sirens, singing seductive songs, and almost securing our demise upon the rocks. Odysseus had his men tie him to the mast so he would not succumb to the wild temptations.

In this bewitching scene from "O Brother, Where Art Thou?" the sirens sing "Go to sleep, you little baby" and that is exactly what TST, OneUp, Leeloo, E2T and others want us to do as we open our wallets wide. (3:30 min, but worth every second)



I interviewed many traders and found the average they spent was $7,000 on combine fees and resets, before they either succeeded or failed for the last time and walked away dejected.

Newbies have NO BUSINESS frequenting this type of establishment! They need to be tied to the mast and then have the cords be drawn even tighter - as the soft lullabies tempt certain death.

On the other hand, truly experienced traders should be okay. But even then, there is the 9% gain per day requirement on the evals and the 20% profit sharing when live. These should make any rational, prudent, far-thinking and patient market participant flee with his bank account unadulterated.

Instead, all traders should start with micros and build, build, build. If you want to make a career out of trading, yet you can't profit with ONE MICRO contract, why do you think you can trade with 15 Emini's????

Starting with just $1000 and trading one micro per $500 in the account and earning an average of 2% per day gives you $116,000 in 12 months.

Starting with the $7,000 you would save by not doing the evals and doing an average of just 1% per day gives you $76,000 in 12 months.

That same $7,000 in 24 months at 1% per day becomes $830,000+.

I love the siren song reference. Seems a pretty acurate description of what these companies in general. *This coming from someone very ignorant on the subject so don't listen to me lol.*

I don't know these companies or what they do exactly except for reading and studying some Mike Bellafiore of SMB in the past.

I remember commenting to my wife that this guys a l***er but I can't stop reading because it's so friggin entertaining!

Now that was a prop firm but I'm assuming they are all based on the same premise?

But now it's a combine? Is that even right? A Gauntlet? An Incubator? A Multi-Level-Marketing-Online-Day-Trading-Platform? Oh no. No they wouldn't say that.

I remember that Bellafiore going off about how many time he wanted to quit cause his traders ALL weren't working 26hrs a day like this one guy and it cost millions to run his business and I can't make money with these guys but this one guys making millions alone working every minute of everyday. "He doesn't even eat..." lol. It's ALL a roit act.

Now they ALL use GREED as thier main marketing disguised with clever webinars designed to sound like legitimate advice... but it's mostly just infotainment!

As for the compounding your glossing over one tiny... huge thing.

If you trade the exact same strategy and can make %1-%2 day ON AVERAGE (ya I dont care what anybody says it's doable (but not like that)) then you would be trading 5 times the amount... then TEN times... then TWENTY TIMES!!! ...ect.

The psychology of that surely would cripple anyones ability to execute flawlessly in such a such short period of time.

I think %1 percent a day (on average) is doable but I doubt the compounding.

Great journal.

Thank you

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  #108 (permalink)
 Botts 
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Sandpaddict View Post

As for the compounding your glossing over one tiny...huge thing.

If you trade the exact same strategy and can make 1% - 2% day ON AVERAGE (ya I don't care what anybody says it's doable (but not like that))
then you would be trading 5 times the amount... then TEN times... then TWENTY TIMES!!! etc..

The psychology of that surely would cripple anyone's ability to execute flawlessly in such a such short period of time.

I think 1 percent a day (on average) is doable, but I doubt the compounding.

Great journal.

Thank you

Well said.

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  #109 (permalink)
ComTrader123
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Good to her someone thinking along the same lines. The strange thing abut the combines is that I do very well the first few days but the problem for me is greed. I expect to make the same 2500 every time I trade. lol. Out the gate I am trading well because I survey whats going on in the market and if I notice that I am predicting the right price movements then I fork over the money to the sirens and trade the combines. I do well and then sit there and calculate all the money I can make theoretically and become very unrealistic and greedy and anxious. jumping into situations that I should not and then reverse my profits. If I can save for the micros and trade the crude oil mini I think I can do it and at least I can trade for real. Cannon trading is offering an account for 2500 dollars. Do you know what the cheapest I can go to open a micros account to trade mini crude? How much do you think I would need and exactly how many contracts could I trade? I want to have enough money to stay in the game and not get a margin call. If it means trading 1 mini contract, so be it.

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  #110 (permalink)
 Sandpaddict 
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ComTrader123 View Post
Good to her someone thinking along the same lines. The strange thing abut the combines is that I do very well the first few days but the problem for me is greed. I expect to make the same 2500 every time I trade. lol. Out the gate I am trading well because I survey whats going on in the market and if I notice that I am predicting the right price movements then I fork over the money to the sirens and trade the combines. I do well and then sit there and calculate all the money I can make theoretically and become very unrealistic and greedy and anxious. jumping into situations that I should not and then reverse my profits. If I can save for the micros and trade the crude oil mini I think I can do it and at least I can trade for real. Cannon trading is offering an account for 2500 dollars. Do you know what the cheapest I can go to open a micros account to trade mini crude? How much do you think I would need and exactly how many contracts could I trade? I want to have enough money to stay in the game and not get a margin call. If it means trading 1 mini contract, so be it.

There are some massive informational holes to be able to point you in the right direction. But why on earth would you want to enter one of those?

Save your $2500 and blow it up trading one micro at a time.

Yes by the sounds of it you will blow it. And the next $2500 too. And probably the next $5000. Oops I mean $2500.

But seriously. By the sounds of those "services" and I use that term loosely (man I've been waiting forever to use that saying lol) they maybe teach you to use good money management BUT from what I can tell they have timed perfomance goals.

THOSE ARE TOTALLY INCOMPATIBLE GOALS!!!

Here take no risk but make at least $4000 a week. But don't worry... were OK because when you blow up we'll have extracted the profits but no losses and collected fees along the way.

So go get some more capital and TELL YOUR FRIENDS!!!

I am only PARTLY being facetious and would WELCOME anyone from these firms to weigh in.

Cheers from the trading underbelly.

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  #111 (permalink)
 sstheo 
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Sandpaddict View Post
As for the compounding your glossing over one tiny... huge thing.

If you trade the exact same strategy and can make %1-%2 day ON AVERAGE (ya I dont care what anybody says it's doable (but not like that)) then you would be trading 5 times the amount... then TEN times... then TWENTY TIMES!!! ...etc.

The psychology of that surely would cripple anyones ability to execute flawlessly in such a such short period of time. I think %1 percent a day (on average) is doable but I doubt the compounding.

Great journal. Thank you

I don't have enough experience with the psychological component of compounding yet to say that you are wrong. You may be right! In fact, I have evidence from some friends that truly things do get harder and harder; they can't seem to increase in size beyond X contracts. This was a blow to my own confidence, "Maybe I will get stuck too?"

HOWEVER, could it indeed be possible that the extra capital that is pouring into the account as it grows truly offsets the psychological stress of larger position sizes and larger losses on a bad trades? That 1% is really just 1% and never changes? That the mind adapts over time to the bigger account and the bigger dollar swings, which the fractal nature of the markets stays the same? Because it is still all just that same percentages?

That is my hypothesis.

All traders are optimists. The market truly is stacked against us. And perhaps I am the most optimistic of them all. But wouldn't it be great if I could pull this off? $100k in 12 months? Growing steadily week by week (with a few down days at times)?

Stay tuned!

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  #112 (permalink)
 sstheo 
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There are some massive informational holes to be able to point you in the right direction. But why on earth would you want to enter one of those?

Save your $2500 and blow it up trading one micro at a time.

Yes by the sounds of it you will blow it. And the next $2500 too. And probably the next $5000. Oops I mean $2500.

But seriously. By the sounds of those "services" and I use that term loosely (man I've been waiting forever to use that saying lol) they maybe teach you to use good money management BUT from what I can tell they have timed perfomance goals.

THOSE ARE TOTALLY INCOMPATIBLE GOALS!!!

Here take no risk but make at least $4000 a week. But don't worry... were OK because when you blow up we'll have extracted the profits but no losses and collected fees along the way.

So go get some more capital and TELL YOUR FRIENDS!!!

I am only PARTLY being facetious and would WELCOME anyone from these firms to weigh in.

Cheers from the trading underbelly.

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The funding firms have their place, but only for those who already know what they are doing.

But for the newbies, the funders have already been tried and found guilty. Their asinine incompatible goals of learning to trade responsibly and asking for 9% growth per day are mind boggling.

1) I do not invite any funder to respond on my journal. My journal is dedicated to the micros. The micros are the correct vehicle (after sim) to use to learn to trade, and to get started toward using the E-minis.

2) If the funders want to actually help new traders succeed, then they should devise some low-cost training programs that focus on proper risk-reward, OR publicly show the failure rate of their subscribers and say "Go practice and come back when ready." "The average trader spends $7,000 with us before ultimately giving up." "The average funded trader will blow his account within 2 months." I bet that would go over well, LOL

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  #113 (permalink)
 Sandpaddict 
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sstheo View Post
I don't have enough experience with the psychological component of compounding yet to say that you are wrong. You may be right! In fact, I have evidence from some friends that truly things do get harder and harder; they can't seem to increase in size beyond X contracts. This was a blow to my own confidence, "Maybe I will get stuck too?"

HOWEVER, could it indeed be possible that the extra capital that is pouring into the account as it grows truly offsets the psychological stress of larger position sizes and larger losses on a bad trades? That 1% is really just 1% and never changes? That the mind adapts over time to the bigger account and the bigger dollar swings, which the fractal nature of the markets stays the same? Because it is still all just that same percentages?

That is my hypothesis.

All traders are optimists. The market truly is stacked against us. And perhaps I am the most optimistic of them all. But wouldn't it be great if I could pull this off? $100k in 12 months? Growing steadily week by week (with a few down days at times)?

Stay tuned!

Yes that would be awesome!

And doable? YES.

Probable? Absolutely NOT!

I'm not in defiance of the possibility...

I'm in defiance of the TIMELINE.

Also I know VERY little systems that can pump out %2 CONSISTENTLY, if any.

The more common thing that happens is: Your doing good... you size up... your doing great... you add MORE contracts. All is Lambos and Bikinis for life...

Thats when the INEVITABLE drawdown occurs!!!

And now you are MAXED OUT contract wise and with so many contracts on withering profits and mounting losses occur very quickly!

The smarter thing is to buy more in an equity drawdown. Of course that the HARDEST time to do it.

Just MHO

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  #114 (permalink)
 Sandpaddict 
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sstheo View Post
The funding firms have their place, but only for those who already know what they are doing.

But for the newbies, the funders have already been tried and found guilty. Their asinine incompatible goals of learning to trade responsibly and asking for 9% growth per day are mind boggling.

9% per day! That just can't be right!?!!

sstheo View Post
1) I do not invite any funder to respond on my journal. My journal is dedicated to the micros. The micros are the correct vehicle (after sim) to use to learn to trade, and to get started toward using the E-minis.

Absolutely. My apologies. It's YOUR journal.

sstheo View Post
2) If the funders want to actually help new traders succeed, then they should devise some low-cost training programs that focus on proper risk-reward, OR publicly show the failure rate of their subscribers and say "Go practice and come back when ready." "The average trader spends $7,000 with us before ultimately giving up." "The average funded trader will blow his account within 2 months." I bet that would go over well, LOL

I my opinion if they REALLY WANTED TO HELP AND PROFIT they would let anyone aboard that they currently do. Keep them ALL on SIM until certain requirements were met. They would then help the ones they thought had potential and THEN offer a profit sharing deal based on be fact that they are supplying the capital and hence taking the risk. Obviously thats pretty general but why would they do that when they can profit as they know newbies are going to give alot of money to the market anyway.


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  #115 (permalink)
JulioC
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  #116 (permalink)
 sstheo 
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Sandpaddict View Post
9% per day! That just can't be right!?!!

I my opinion if they REALLY WANTED TO HELP AND PROFIT they would let anyone aboard that they currently do. Keep them ALL on SIM until certain requirements were met. They would then help the ones they thought had potential and THEN offer a profit sharing deal based on be fact that they are supplying the capital and hence taking the risk. Obviously thats pretty general but why would they do that when they can profit as they know newbies are going to give alot of money to the market anyway.


9% per day!!!

Most companies have a similar structure. Let's use the 15 contract account from one of them as an example:

To be fair, there is no obligation to complete the requirements in one month, but the suggestion is there that it is possible. If you don't make it, you are "permitted" to remain subscribed for $350/mo. Who wants to pay another $350??? So they try to finish in 20 trading days, and take on more risk than they should for long-lasting growth.

So assuming 20 trading days, and a $9000 profit target, that gives you $450 per day. Easy.

But here is the slight of hand. Here is the deception for those who don't take the time to do the math. (Strong accusation but true). The account is NOT a $150,000 account, as they advertise. It is a $5,000 account!

Why?

Because that is the max drawdown on the whole account! And to add insult to injury, it trails up as you make profits. If you cross below the trailing drawdown, you fail.

What is $450 per day divided by $5,000 max drawdown? 9% profits per day (on average).

Can 9% per day average be reached? Yes. Sustained? No.

If done over 40 trading days (2 months), then the combine player has to earn 4.5% per day. Doable? Absolutely! Sustainable? No.

-------
Evals Reimagined

I like your idea on a revised combine!!! If people don't read my journal and just go micros but insist instead on playing the funding game, FINE.

(1) Make it reasonably priced. The companies should drop the stupid huge fees and charge something small like $50 per month. There is only ONE initial account size, "Small." This way they get 10X as many people playing the game and might really HELP traders instead of just give them drugs.

(2) Keep them on sim at the start. They do this already. But see who floats to the top and run with those people.

(3) The goal is consistency. The goal is CONSISTENT careful growth, not 30% one day and -30% the next.

(4) Teach about risk. The max drawdown should be 10% per day max. On a $5000 max DD, that should be a DAILY drawdown of $500 tops! Right now these firms are saying that 80% or 99% drawdown is okay in ONE DAY. And then they wonder why people blow up their live accounts after they have trained them to take 80% risk in one day? They are not stupid. So clearly they want their "clients" to fail.

(5) Train them. Give them one short video training per day. Give them a real chat room to hang out in, but don't have it be a free for all. And DON'T call out trades. People need to learn for themselves!!!!

(6) Give them real micros. Tell them if they are consistent, they will turn the account to live, and give them real micros to play with. Seriously. Give them a $500 account and see what they do with REAL money, not just "Imaginary Evaluation Effluent."

(7) Give them more funds. As someone consistently makes 1/2% per day, or 1% per day, or 2% per week (whatever), give them more funds. Partner with them. Make the drawdown rules pretty strict. Give them time. Make the profit sharing 90% out the gate.

This could be done. Someone could do this.

I already wrote about the folly of hoping for A while rewarding B. It is time for the goal and the incentives to be aligned. At that point, people will surprise you!

The funding companies claim to make the bulk of their money from profit sharing. It think it is a lie. Things are clearly set up to keep people hooked and coming back as long as possible. "Trade with 15 contracts! Have a $150,000 account. Become wealthy beyond your wildest dreams." Yeah right.

Again, no matter how good the funders get, they will never be able to provide something better than a disciplined trader with their own micro account scaling up slowly.

I know guys who have done VERY well on the combines, gotten a live accounts, and done great for many months. Then they decided to cash out and do their own account without the 20% payment. Why did they cash out? 20% profit sharing! Why not just start small on your own and bypass the funding companies all together? IF you are so good, then just scale up on your own. You can do it.

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 sstheo 
Holladay, Utah, USA
 
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JulioC View Post
How long have you been using AMP?

About 10 years I think.

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 Sandpaddict 
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sstheo View Post
9% per day!!!

Most companies have a similar structure. Let's use the 15 contract account from one of them as an example:

To be fair, there is no obligation to complete the requirements in one month, but the suggestion is there that it is possible. If you don't make it, you are "permitted" to remain subscribed for $350/mo. Who wants to pay another $350??? So they try to finish in 20 trading days, and take on more risk than they should for long-lasting growth.

So assuming 20 trading days, and a $9000 profit target, that gives you $450 per day. Easy.

But here is the slight of hand. Here is the deception for those who don't take the time to do the math. (Strong accusation but true). The account is NOT a $150,000 account, as they advertise. It is a $5,000 account!

Why?

Because that is the max drawdown on the whole account! And to add insult to injury, it trails up as you make profits. If you cross below the trailing drawdown, you fail.

What is $450 per day divided by $5,000 max drawdown? 9% profits per day (on average).

Can 9% per day average be reached? Yes. Sustained? No.

If done over 40 trading days (2 months), then the combine player has to earn 4.5% per day. Doable? Absolutely! Sustainable? No.

-------
Evals Reimagined

I like your idea on a revised combine!!! If people don't read my journal and just go micros but insist on playing the funding game, FINE.

Make it reasonably priced. The companies should drop the stupid huge fees and charge something small like $50 per month. There is only ONE initial account size, "Small." This way they get 10X as many people playing the game and might really HELP traders instead of just give them drugs.

Keep them on sim at the start. See who floats to the top! The goal is consistency. The goal is CONSISTENCY.

Train them. Give them one short video training per day. Give them a real chat room to hang out in, but don't have it be a free for all. And DON'T call out trades. People need to learn for themselves!!!!

Give them real micros. Tell them if they are consistent, they will turn the account to live, and give them real micros to play with. The goal is consistency.

Give them more funds. As someone consistently makes 1/2% per day, or 1% per day, or 2% per week (whatever), give them more funds. Partner with them. Make the drawdown rules pretty strict. Give them time. Make the profit sharing 90% out the gate.

This could be done. Someone could do this.

Couldn't have said it better. Cleary as YOU DID. Lol

Thank you.

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4ptzTradr
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I agree. Trading Futures is NOT an easy road. It's a 100% mental business which requires an insane amount of DISCILPINE. It's NOT you against the market, it's ultimately you against yourself. Even after 8 years of trading every day, I'm still pronged to moving a stop position and arguing with the market. You can build wealth fast Trading Futures. My best week I had a $10K account and made $28K profit in one week trading the NQ. Woke up the next day with a $38K account! Think about it, $28K in 1 week, that's more than most people make in their their 9 to 4 job in a year! Then the next 3 trading days Mr. NQ took it ALL back and some of my original $10k. This was my epiphany....I had no clue what I was doing. This Trading was not going to be that easy and I had to really start the hard work, my type A personality. I knew if I wanted to make it I was going to have to work harder.

If I could give one piece of advice. Please, don't stay in a trade when its draining your account every second while you rationalize this lunacy instead of clicking out. How long should you stay...no longer than you can hold your breathe. This is the number ONE reason for failure in Trading. You will most assuredly fail every time if you do not learn this rule of taking a loss quickly, very quickly. Never, ever, give back more than 50% of your daily profit. You are a defensive lineman, a guard, a watchman over you capital. You must draw red lines to protect your account. No one is going to do this for you. If you fail to apply this, the Market will take your capital, all of it. Regardless of your opinion, the market is a random beast, at times moving completely disconnected to current economic situation. Ninety percent of trading is done by ALGO's. They are programed to surf up and down the charts detecting LONG and SHORT build up positions and then push that direction until they are forced out, rinse repeat. Protect you capital!

I started using the MICROS to mitigate my risk and illuminate the fear of taking an entry. I always was perplexed at how I always did so much better with the SIM Account and then did poorly with the LIVE account, then I noticed that on the SIM Account I was fearless and took trades on my intuitive side, I acted quickly without fear and my results was always good. When I switched to the LIVE I noticed my hesitancy to trade and I would miss big moves. By trading with the MICROS I was able to have the same fearless attitude with REAL Money because the initial loss was so small it didn't affect my decision. This was a big deal for me. Put on 1 micro, if you see the trade is sound then add 5 or 10 more.

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 sstheo 
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4ptzTradr View Post
I agree. Trading Futures is NOT an easy road. It's a 100% mental business which requires an insane amount of DISCILPINE. It's NOT you against the market, it's ultimately you against yourself. Even after 8 years of trading every day, I'm still pronged to moving a stop position and arguing with the market. You can build wealth fast Trading Futures. My best week I had a $10K account and made $28K profit in one week trading the NQ. Woke up the next day with a $38K account! Think about it, $28K in 1 week, that's more than most people make in their their 9 to 4 job in a year! Then the next 3 trading days Mr. NQ took it ALL back and some of my original $10k. This was my epiphany....I had no clue what I was doing. This Trading was not going to be that easy and I had to really start the hard work, my type A personality. I knew if I wanted to make it I was going to have to work harder.

If I could give one piece of advice. Please, don't stay in a trade when its draining your account every second while you rationalize this lunacy instead of clicking out. How long should you stay...no longer than you can hold your breathe. This is the number ONE reason for failure in Trading. You will most assuredly fail every time if you do not learn this rule of taking a loss quickly, very quickly. Never, ever, give back more than 50% of your daily profit. You are a defensive lineman, a guard, a watchman over you capital. You must draw red lines to protect your account. No one is going to do this for you. If you fail to apply this, the Market will take your capital, all of it. Regardless of your opinion, the market is a random beast, at times moving completely disconnected to current economic situation. Ninety percent of trading is done by ALGO's. They are programed to surf up and down the charts detecting LONG and SHORT build up positions and then push that direction until they are forced out, rinse repeat. Protect you capital!

I started using the MICROS to mitigate my risk and illuminate the fear of taking an entry. I always was perplexed at how I always did so much better with the SIM Account and then did poorly with the LIVE account, then I noticed that on the SIM Account I was fearless and took trades on my intuitive side, I acted quickly without fear and my results was always good. When I switched to the LIVE I noticed my hesitancy to trade and I would miss big moves. By trading with the MICROS I was able to have the same fearless attitude with REAL Money because the initial loss was so small it didn't affect my decision. This was a big deal for me. Put on 1 micro, if you see the trade is sound then add 5 or 10 more.

THANKS so much for your contribution. You just crystalized 12 pages of my journal in 3 paragraphs! "By trading with the micros I was able to have a fearless attitude with real money...."

So sorry to hear about your crazy win and then loss. Certainly we all have similar roller coaster rides.

Most importantly, I wholeheartedly endorse your idea of getting out immediately when a trade is going against you. How fast is "immediately?" No longer than you can hold your breath! I love it! Capital preservation above all else. If you are in a losing trade, you are probably holding your breath anyway. Once you take your next breath, then click exit.

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 sstheo 
Holladay, Utah, USA
 
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I just got this from a friend of mine who passed his evaluation this week with one of the funding companies.

The "forfeit" language gives ample proof that funding companies value a trader significantly more when they are in the combine stage.

But to make your head spin even more, he said they also have a cap on payouts equal to the account size you sign up for. So if you sign up for a "$150k" account, you are capped at lifetime payouts of $150k.

Do they make most of their profits from "partnering" with live traders?

You tell me.

Incredible.

I recognize that the funders may have a few Grand Master Traders that trade for them with huge accounts, but if that is working out so well for them, why not groom even more of them? Wouldn't you want a huge army of them trading for you? Why use words like "forfeit" and "capped"?

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 sstheo 
Holladay, Utah, USA
 
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The Ultimate Trading Plan
For all Traders
From Beginners to Blowout Recoverees


As mentioned in the last post, I am guessing that the funders make much more money on their combines than they do from partnering with traders for the long term. Most combines fail, and most funded live accounts fail. But this doesn't mean that a few amazing traders don't survive and thrive.

But the odds are stacked against the the less-disciplined newbie trader who needs more TIME in front of the screen with some good setups and iron-clad discipline. The average combine inductee pays over $7,000 and never earns a dime in real profits.

-----------

Therefore....

As I have been saying for 6 weeks now, Micros are the way to go. Follow the plan below, and you will never feel the need to play with the funding companies and get stuck in their hamster wheels. Instead, you can keep 100% of your funds and move forward to consistent gradual profits (and even become a Grand Master Trader if you want, or even a Trading God!).


Stage 1. Paper Trading

1) Sim Trade. Use one MES or one MYM micro contract. Be disciplined. I know it's hard, but pretend the Simbucks are real. Honor your position sizing, targets and stops.

2) Profit Target. Stop when you get profits of 2% for the day (not the 9% the evals errantly require).

3) Per Trade loss. Limit your per-trade loss to 2% of your sim account

4) Max Daily loss. Stop for the day if you reach 10% max.

In two weeks (10 trading days), you should have added 10% to 20% to your sim account. Only when you can paper trade for two weeks and honestly add 10% to your account are you permitted to advance to the next stage... Again, you must be able to honestly trade for 10 days and follow the rules above before you trade live, no matter how small.


Stage 2. One Micro


1) Live Trading. Put $500 max in a live account with AMP or some other discount brokerage. Trade with one micro. I recommend the MES (S&P) or the MYM (DJI) as they are less volatile than the MNQ (Nasdaq) or the M2K (Russell). Do your best to have great entries.

2) Profit Target. Try to earn 2% on your account each day. This is just $10 (2% of $500). When you reach this 2% mark, then STOP for the day. You are developing discipline.

3) Per-trade Loss. Limit your per-trade loss to 2% of the account ($500 x 2% = $10). $10 is 8 ticks on the MES and 20 ticks on the MYM. You are developing a pattern of getting out quickly if a trade is going against you.

4) Max Daily Loss. Limit your daily loss to 10% of your account ($50). How long can you last if you hit your max loss each day on a $500 account? 10 days.

Earn an average of 2% per day for 10 full days without breaking the 2% loss per trade rule or the 10% max loss per day rule. Add $100 to that $500 account and take it to $600 in two weeks. Congratulations, you just made 20%+ in two weeks. You just performed better than most hedge funds do in a full year. Only when you can make an average of 2% per day with one micro for 10 trading days without dropping below the 10% daily loss can you go to the next step.


Stage 3. Micro Scaling.

1) Live Trading with two or more micro contracts. If you have more funds to add to your account, do so now, up to $10k max, OR just continue to trade with the $600 you now have. Start again with one micro, but you are finally permitted to trade with more than one micro as you EARN the right to trade bigger through good trading.

2) Profit Target. Set a profit goal of 1% or 2% of your balance per day. Later on, the % goals will be less relevant because you will take what the market gives each day, but for now, you are developing discipline. STOP when the target is reached.

3) Per Trade Loss. Your per-trade max loss is still 2% of your full account. Especially as the account grows, be sure to take your 2% MAX stop loss per trade. This will be the absolute hardest part of trading for you. If you can master this, then you will go far.

4) Max Daily loss. Your daily max loss is still 5% to 10% of your account or $50, whichever is bigger. Be sure to stop trading when you reach a daily loss of 5% to 10% (you decide). Once you are at minus 5% or minus 10% on the day, your emotions may kick in and you may decide you just have to recover all the losses for the day. Fight the urge. Close it down. Come back tomorrow with fresh eyes. You can do it.

5) Scale up! Add a micro for each $500 you earn. Once your account gets to $1000, you are permitted to trade with 2 micros. At $1500 profit, you can trade with 3 micros, etc.

Things are starting to get exciting now.

Stage 4. Let the Good Times Roll.

1) Continue trading live and scaling, but reduce risk. Once you get to $5k in your account, increase the margin per micro to $1000, and trade with a max of 5 micros per trade. Now double the margin (less risk). Add one micro for each extra $1000 gained.

2) Profit Target. Try to get to 1% to 2% per day average.

3) Per Trade Loss. Strictly honor the 2% max loss per trade.

4) Max Daily Loss. Keep your max DD per day at 10%, or even dial it down to 5%.

5) Scale up! Continue trading, but once you get to $10k in your account, increase the margin per micro to $2000, and trade with a max of 5 micros per trade. For each $2000 added, increase by one micro. You are reducing your risk again as well.

6) Scale up again! Continue trading to $20k. You can now trade 10 micros or one E-mini.

Congratulations! You have graduated! You determine your next steps, but I recommend a max of one Emini per $10k in your account. Continue to build your account with the DISCIPLINE it took you to get here.

Reflect on these numbers:

Starting with $1000:
  • At an average of 1% per day, $1000 becomes $11k in one year and $117k in two years.
  • At an average of 2% per day, $1000 becomes $116 in one year and $13 million in two years.

Starting with $7000: (The amount you would probably have spent on a combine)
  • At an average of 1% per day, $7000 becomes $76k in one year and $830k in two years
  • At an average of 2% per day, $7000 becomes $811k in one year and $94 million in two years.

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