Realistic Goals....

[tomerok 10]

Hi, that's my first post over here. so first things first... hello everybody, i appreciate any comment/response.

 

I'm currently setting up my goals for my day trading and would appreciate your feedback.

I paper traded daily on futures for the last six month, i used the time for educate myself..... mainly blogs, forums and books.

I opened up a live account with 10K and would really like to know if I'm shooting to high on my goals.

my first goal is 300$ a day meaning 6000$ a month until July 2012.

I plan on making trading my main and single profession so i can quit my day job.

I appreciate any comment , tip or other realistic goals that will light my journey.

 

Thank you.

 

Tomer.

[MightyMouse 12]

Hi, that's my first post over here. so first things first... hello everybody, i appreciate any comment/response.

 

I'm currently setting up my goals for my day trading and would appreciate your feedback.

I paper traded daily on futures for the last six month, i used the time for educate myself..... mainly blogs, forums and books.

I opened up a live account with 10K and would really like to know if I'm shooting to high on my goals.

my first goal is 300$ a day meaning 6000$ a month until July 2012.

I plan on making trading my main and single profession so i can quit my day job.

I appreciate any comment , tip or other realistic goals that will light my journey.

 

Thank you.

 

Tomer.

 

Is 10k all you have?

 

If you need 72k a year to meet your expenses, then you are going to need at least 72k for your first year to make sure you meet all your living expenses.

 

If you know how to take money from the market, then your good, bad, and even years should average out to a gain. that gain needs to be a minimum of 72k after trading expenses in order for you to survive going forward after your first year.

 

If that average gain that you achieve is 10% then you need a minimum of 800kish to trade and provide yourself an income of 6k a month (720k + 72k for the first year). an average of 10% will not give you any growth in this example.

 

If 10k is all you have, then waiting until you do have enough money might be your best option.

 

It looks doable on paper; however, when you put your money at risk, you are trading against individuals who need your money to survive. It's like stepping into a ring to fight a UFC championship fight against a seasoned fighter after you have been hitting a heavy bag for a few months.

[Tams 20]

Hi, that's my first post over here. so first things first... hello everybody, i appreciate any comment/response.

 

I'm currently setting up my goals for my day trading and would appreciate your feedback.

I paper traded daily on futures for the last six month, i used the time for educate myself..... mainly blogs, forums and books.

I opened up a live account with 10K and would really like to know if I'm shooting to high on my goals.

my first goal is 300$ a day meaning 6000$ a month until July 2012.

I plan on making trading my main and single profession so i can quit my day job.

I appreciate any comment , tip or other realistic goals that will light my journey.

 

Thank you.

 

Tomer.

 

before you go live, there are a few things you should be sure of...

 

1. do you have a consistent positive sim result? (daily, weekly, monthly?)

 

sim is not real,

sim profit does not guarantee real profit.

 

but if you can't make consistent sim profit,

there is no chance in hell that you can make consistent real profit.

(some might want to argue differently, that is fine with me.)

 

2. what is your MFE to MAE ratio on each trade?

 

3. what is your commission multiple?

take your net profit and divide it by the total commission paid.

Who makes more money? you or your broker?

 

4. what has been the max daily draw down in your sim trades?

 

if you don't know the answers... that means you have not been keeping a business record. ie. you are not treating trading as a business. ie. there is no chance in hell you will be a long term survivor.

 

if you know the answers, you are on the 1st step to be a trader.

 

 

... more later.

 

 

 

 

 

ps. get a realistic sim trader. Not all the simmer are made the same. ie the sim should buy on ask and sell on bid, etc.,

Edited September 18, 2011 by Tams

[steveh2009 10]

The ideal way to get started in this biz is to have your significant other be able to 100% fund your family's lifestyle while you take enough excess savings to trade with and that savings loss would have zero impact on your lifestyle. The money you'd really be losing this way is possibly the guaranted income you'd be making every year for having a full-time job in the real world (duh).

 

Personally, there was no way I could have ever even considered trading for a living in your situation vs. the above. What I would have wound up doing was continue to be a swing type trader who doesn't have to monitor the markets as closely. In this era, things have become easier in a way with being able to hook up alerts in your smart phone so that Big Brother at work can't know or monitor you when you simply have to make an important swing trading decision during the middle of the work day. I mean, how cool is it to swing trade from your phone anyway and still have that guaranteed income arriving on schedule?

 

Maybe you're a special case and I was not to try it your way. But 8 years later, I have the luxury of 20/20 hindsight to tell you that, in my case, I wouldn't have made it. I never blew out a futures account or suffered a severe draw-down but I sure as heck treaded water for so long that I wouldn't have been able to feed, clothe and shelter myself long enough to see the other side.

 

[before the comments start rolling in, I'm not talking about some trading addict who is trading all the time from work. When I say swing, I mean like no more than 5 intraday decisions a week. This rules out futures. Go more for QQQ or SPY option trading where you get the same Section 1256 Contract 60/40 split mark-to-market tax treatment...one-liner on the tax form to boot!]

[gosu 10]

Hi, that's my first post over here. so first things first... hello everybody, i appreciate any comment/response.

 

I'm currently setting up my goals for my day trading and would appreciate your feedback.

I paper traded daily on futures for the last six month, i used the time for educate myself..... mainly blogs, forums and books.

I opened up a live account with 10K and would really like to know if I'm shooting to high on my goals.

my first goal is 300$ a day meaning 6000$ a month until July 2012.

I plan on making trading my main and single profession so i can quit my day job.

I appreciate any comment , tip or other realistic goals that will light my journey.

 

Thank you.

 

Tomer.

 

My advice is to focus on being rational at all times and avoiding irrationality. It is irrational to set goals for $x per day or month when you lack the knowledge, skill and experience to extract anything at all.

 

Thus far, what you have done to "educate" yourself is read the opinions of people who are further along than you in the acquisition of trading myths. You have no personal knowledge of anyone doing what you would like to do, so you are blind to what it takes to get there.

 

A rational goal would be to find a person who is already doing what you want to do and be able to learn first hand how it is done. Such a person will not be in the business of selling anything. He will also not be in the public eye so it is unlikely you will find such a person. As a rational alternative, you can come up with a learning plan to find out on your own what it takes. When learning on your own, however, it is imperative that you are able to detect when you are learning things incorrectly and get yourself back on the correct path.

 

Until you come up with either of the above, you should keep that $10,000 safely tucked away. However, I do realize my advice may not be "realistic."

[zdo 20]

tomerok

 

That’s not enough capital. Not enough staying power. Not enough sizing flexibility.

 

Also, did you just skip making a powerful,categorical statement about the strength and robustness of your edges? “I paper traded daily on futures for the last six month, i used the time for educate myself..... mainly blogs, forums and books.” didn’t jump off the page at me confirming you’re ready with edges

 

For the sake of brevity, did you also leave out comment on your ‘mental and virtues capital’ ?

 

All that said – and here is the worstest advice ever – Go for it!

 

Why are you even asking us?

… and no, I’m not being flippant. Other posters have noted that you really don’t know what you’re getting into… so that 10k may ultimately be the best way to really find out. Maybe loosely ‘keep’ that $300 a day goal, but realize that unless you are an experienced savant, averaging more than 0.5% a day day trading is really an exception. As a beginner you may be able to pull off runs of many days doing that, but that you and reality will also find ways to thwart yourself for days on end – until you learn ways to genuinely re-structure adversity… etc. But, re daily goal, from other angles, that $ per day figure might be the most self limiting decision you ever make... ie Realist goals.... NOT.

 

Gosu’s post was actually an excellent post, except for the first sentence “My advice is to focus on being rational at all times and avoiding irrationality”. In the real world, this is the equivalent of something like “My advice is to focus on keeping your heart beating at all times and avoiding breathing”

 

So, to demonstrate and ‘dance’ with the irrational some - contrary to what Gosu said, I would not advise seeking ongoing guidance from someone who has succeeded from a something similar starting place. If you happened to be lucky enough to find such a person, just because they did it, and they KNOW it can be done - does not raise the odds that they will believe you can do it and truly enable you. Most of those who have done it have also witnessed sharper, faster, more talented traders not be able to pull it off. As the other gets to know you, s/he will more likely find impressions to doubt that you can do it – even though social mores would press them to act as if they did believe in you... would most likely ultimately end up being a detriment instead of an asset… Again, why are you asking us?

 

Wishing you all the best.

 

zdo

[gosu 10]

* * *

Gosu’s post was actually an excellent post, except for the first sentence “My advice is to focus on being rational at all times and avoiding irrationality”. In the real world, this is the equivalent of something like “My advice is to focus on keeping your heart beating at all times and avoiding breathing”

 

* * *

 

Your analogy is nonsensical and doesn't resemble the point I was looking to get across.

 

See if you can refrain from taking what I say the wrong way. I know you might be harboring something from a prior tweak I gave you but you really are not that good to be evaluating my advice to someone who requests comments from others.

 

It is not my habit to give advice. I do not do it lightly and I do so only if I am confident I know where the person is coming from.

 

It may be difficult for you to do, but kindly refrain from commenting on my posts. Or if you can't control yourself, just put me on ignore altogether. Prefacing your snide remarks with a backhanded compliment is rather bush league.

[Gabe2004 10]

my first goal is 300$ a day meaning 6000$ a month until July 2012.

.....

Tomer.

 

Tomer

There is no way you can guaranty a fixed $ amount of profit per day. Not even per week.

As other people noted, Live trading is Totaly different than Sim.

 

With that said, why don't you trade ETF's in the beginning to reduce your risk and exposure?

I realize that you may need more capital to trade - 25K actually (The Pattern Day Trader Rule) but your risk may be 5-20 times smaller.

 

Good luck in any case.

 

Gabe

[Tradewinds 12]

What are your profits after fees in SIM trading? How many trades do you make? What are you trading?

[TheNegotiator 13]

Hi, that's my first post over here. so first things first... hello everybody, i appreciate any comment/response.

 

I'm currently setting up my goals for my day trading and would appreciate your feedback.

I paper traded daily on futures for the last six month, i used the time for educate myself..... mainly blogs, forums and books.

I opened up a live account with 10K and would really like to know if I'm shooting to high on my goals.

my first goal is 300$ a day meaning 6000$ a month until July 2012.

I plan on making trading my main and single profession so i can quit my day job.

I appreciate any comment , tip or other realistic goals that will light my journey.

 

Thank you.

 

Tomer.

 

Hi Tomer,

 

First of all, welcome to TL! People here have a great deal of knowledge which you can learn from, or like many other forums, will confuse the hell out of you as it's all coming from different people with different experiences and different objectives.

 

You seem intent on becoming a professional trader and that's fine even if the amount you are starting out with is not exactly great.

 

A really important point for when you consider how much effort and time it will take before you are profitable, is who you believe you are up against. You will be up against seasoned profitable traders, big funds, commercials, algo systems and of course a constant stream of fresh wannabes who think they'll be the next big thing. These participants are all in a big rat race who's sole purpose(despite what they might tell you) is to redistribute someone else's wealth into their own account.

 

These are hard realities and you must grasp them fully. Your $300 a day average target is all very well, but you have to account for this not happening and even you losing that much each day at times. Like Tams said though you really should be able to demonstrate to yourself consistent profitability on a good sim before you even consider going live. This way you will have a fighting chance in the market and perhaps will be able to focus more on your likely biggest enemy- you.

 

If you want to read up, take a look at the psychology section in our forums. If you think to yourself "yeah, yeah, but I'm different", my advice is take a really hard look at yourself and know that the problems people come across within themselves while trading, are there in all of us to some extent.

 

Apart from that, if you have taken everything into account, studied hard and set proper money management rules, have a great and proven strategy and you understand probabilities, I'd say that there is no reason why the goals you have mentioned are unrealistic. I'm not being sarcastic at all. Just really think hard whether you are truly ready to be a consistent and profitable trader.

[zdo 20]

Your analogy is nonsensical and doesn't resemble the point I was looking to get across.

 

See if you can refrain from taking what I say the wrong way. I know you might be harboring something from a prior tweak I gave you but you really are not that good to be evaluating my advice to someone who requests comments from others.

 

It is not my habit to give advice. I do not do it lightly and I do so only if I am confident I know where the person is coming from.

 

It may be difficult for you to do, but kindly refrain from commenting on my posts. Or if you can't control yourself, just put me on ignore altogether. Prefacing your snide remarks with a backhanded compliment is rather bush league.

 

Gosu, ok let’s take it out in the “bush” then

To attempt to exclude the irrational is “nonsensical“ and to advise someone to do it is past “bush”. To attempt to exclude the irrational is irrational…

… the rest of the post is excellent.

I didn’t make a fake compliment. It wasn’t a real compliment either. It was a note to OP to be wary of that first sentence but not to throw out the good parts because of the opening sentence.

re ‘tweak’ Wasn’t questioning your credibility either. In your very first posts on TL you talked about bullshitting just for the fun of it if you wanted to, but subsequent posts have more than belied that early attitude… so why would I put ignore on good posts?

… the ‘feeling challenged’ is all yours… I’m only going after that first sentence - period.

[gosu 10]

Gosu, ok let’s take it out in the “bush” then

To attempt to exclude the irrational is “nonsensical“ and to advise someone to do it is past “bush”. To attempt to exclude the irrational is irrational…

… the rest of the post is excellent.

I didn’t make a fake compliment. It wasn’t a real compliment either. It was a note to OP to be wary of that first sentence but not to throw out the good parts because of the opening sentence.

re ‘tweak’ Wasn’t questioning your credibility either. In your very first posts on TL you talked about bullshitting just for the fun of it if you wanted to, but subsequent posts have more than belied that early attitude… so why would I put ignore on good posts?

… the ‘feeling challenged’ is all yours… I’m only going after that first sentence - period.

 

Don't kid yourself. There's nothing you can post that I would take as a "challenge" to anything. I just wanted to make explicit my objection to your referencing my post to the OP.

 

For some reason unknown to me, you like to chirp in with your take on what I'm saying when I am replying to someone else. If it helped to convey my point, I would not object. But it does not, so I suggested to you from the start to disregard my posts. Nothing personal; I just think you are incapable of understanding my view of trading.

 

In any case, I do see the relation between your advocacy of engaging in irrational behavior to learn how to trade with your advocacy of being in the market while not knowing what's going on. I do not recommend to anyone either approach.

[electroniclocal 10]

The question, I think, was whether your goal of $300 a day is realistic.

 

You have been SIM trading for 6 months so you should have a lot of statistics to rely on. These are theoretical. of course, but they should give you an indication if you treated the SIM seriously.

 

If you haven't extracted the stats then I would suggest that you do. Look at win rate, drawdown, average trade in $, largest loss, largest win and so on. Break the data down so you have an average day, an average week and an average month.

 

Now you have some decent information to make an assessment.

 

The transition from SIM to live will have an impact on these stats due to both a psychological impact as well as an actual tradability impact.

 

Just two comments,

 

I second the view that having a separate income stream to live off is a great help in becoming CP

 

Trade the smallest size your methodology will allow. $10k is very tight, even for a small contract such as the YM. I would at least triple the maximum drawdown you experienced in SIM to decide whether the capital is enough.

 

Good trading

 

EL

[joshdance 10]

The #1 question is, how did you do on sim? Not that it's the same as real money, but if you did well in sim for 6 months, then you at least have consistency going.

 

If you can be consistently profitable almost every day, and most every week, then the amount of capital is not that important--if you trade well, which is why I'm curious as to your sim results. If you were profitable every week, or almost every week, then go for it.

[joshdance 10]

If you need 72k a year to meet your expenses, then you are going to need at least 72k for your first year to make sure you meet all your living expenses.

 

If that average gain that you achieve is 10% then you need a minimum of 800kish to trade and provide yourself an income of 6k a month (720k + 72k for the first year). an average of 10% will not give you any growth in this example.

 

I'd say if a trader can't make more than 10% per year, then it would be best just to buy an index fund in an IRA and be done with it! 10% per year, an average stock market return, doesn't seem like trading to me.

 

The question is, regardless of capital, CAN YOU TRADE? If you can, a large base capital will help you grow. If you can't, it will only prolong the inevitable failure.

 

To the OP, I agree as well that you should be doing something else for money when you begin. If you lose your money, at least you have something coming in, even if it's not a lot.

[fxjaykay 10]

Tomerok,

 

just stating the obvious, but still: the fact that you ask and thus doesn't know, tells me that you're not quite ready. And in reality, there are only two reliable sources of information to that which you ask for - the market and yourself, Neither I nor anybody else on this forum can know better.

 

So go ask the market and yourself instead. How? Prepare. Go live but smaller (I am presuming that your 10k is what you have got to put in there), which might mean trading something else than futures. If you can make it work small, then make the transition to what you had in mind. By then you should have a well founded idea of what you are capable of reaping in on an average daily basis, and also what can go wrong at times.

 

Let me repeat one point - start small. If you can't make it work small, you won't make it with a larger account either. Now, 10k is a rather small account, but you can go for forex for instance, that will give you the possibility of placing real trades with realistic order handling and outcome, but still put only a smaller part of your capital on the line.

 

/j

[MightyMouse 12]

I'd say if a trader can't make more than 10% per year, then it would be best just to buy an index fund in an IRA and be done with it! 10% per year, an average stock market return, doesn't seem like trading to me.

 

The question is, regardless of capital, CAN YOU TRADE? If you can, a large base capital will help you grow. If you can't, it will only prolong the inevitable failure.

 

To the OP, I agree as well that you should be doing something else for money when you begin. If you lose your money, at least you have something coming in, even if it's not a lot.

 

I agree wholeheartedly. Earning only 10% on average would suck for most aspiring traders, making it seem like it isn't worth it.

[Tams 20]

Tomerok,

 

just stating the obvious, but still: the fact that you ask and thus doesn't know, tells me that you're not quite ready. And in reality, there are only two reliable sources of information to that which you ask for - the market and yourself, Neither I nor anybody else on this forum can know better.

 

So go ask the market and yourself instead. How? Prepare. Go live but smaller (I am presuming that your 10k is what you have got to put in there), which might mean trading something else than futures. If you can make it work small, then make the transition to what you had in mind. By then you should have a well founded idea of what you are capable of reaping in on an average daily basis, and also what can go wrong at times.

 

Let me repeat one point - start small. If you can't make it work small, you won't make it with a larger account either. Now, 10k is a rather small account, but you can go for forex for instance, that will give you the possibility of placing real trades with realistic order handling and outcome, but still put only a smaller part of your capital on the line.

 

/j

 

"go live and small" will only prolong the inevitable if you don't know what you are doing.

 

"start small" without understanding discipline will turn small into large (both profit and loss).

[Qiman 10]

Questions of this type are always interesting, and I am frequently amazed by some of the paradigms traders can have.

 

Simulated trading can be helpful, but trading is mostly about emotions, and when real money is on the line it is a very different dynamic for most people. Fear tends to take over.

 

As far as what is realistic, it really depends on how much you have mastered yourself and your emotions, and it also requires a reasonably intelligent strategy, including risking only a small slice of your capital on any one trade.

 

As far as real world examples go, back in the mid-90s I was mostly swing and occasionally day trading stocks, mostly things like Ensco International, Diamond Offshore, and other such oil service stocks, also some tech stocks here and there. With only 18, 000 USD in capital, and with a 2 to 1 margin account, I was averaging around 2K a month net profit, with minimal drawdowns. I was patiently waiting for only the best opportunities, not hypertrading.

 

When I hear figures like 10 or 20 percent a year, I say, why even bother!

[amatulic 10]

I'm currently setting up my goals for my day trading and would appreciate your feedback.

I paper traded daily on futures for the last six month

Paper traded? As in, drawing trades on a chart? Or are you doing it in real time simulation?

 

Charting trades and real-time sim are completely different things. If you can achieve your goal in simulation, that's a good first step. Personally I think it's too high. See if you can make consistently half that on a weekly basis ($150/day average) before you dip into trading real money.

[MightyMouse 12]

 

As far as real world examples go, back in the mid-90s I was mostly swing and occasionally day trading stocks, mostly things like Ensco International, Diamond Offshore, and other such oil service stocks, also some tech stocks here and there. With only 18, 000 USD in capital, and with a 2 to 1 margin account, I was averaging around 2K a month net profit, with minimal drawdowns. I was patiently waiting for only the best opportunities, not hypertrading.

[/quote

 

 

Are you still able to achieve these results or is this a good old days story?

[joshdance 10]

Let's say a trader has a 100K account. If they can't make more than $1200 a month, then they suck, just plain and simple. Hell, I can make that much in a month trading 1 contract, which I only need $3K (CL) to trade. I'm sure good ES traders (for example) can make that much a month trading 1 contract, with a margin of only $500 to trade.

 

My point is that one is not better off having a large account than a small account, if they can't trade worth a damn. They'll just lose more money, though it will take longer. Being capitalized protects one from drawdown, but good traders don't really have huge drawdown relative to account size from what I've seen. A good trader may have drawdown, but their risk will be such that it will not significantly affect their account balance. It's when risk is out of control that account size becomes a problem.

[MightyMouse 12]

Let's say a trader has a 100K account. If they can't make more than $1200 a month, then they suck, just plain and simple. Hell, I can make that much in a month trading 1 contract, which I only need $3K (CL) to trade. I'm sure good ES traders (for example) can make that much a month trading 1 contract, with a margin of only $500 to trade.

 

My point is that one is not better off having a large account than a small account, if they can't trade worth a damn. They'll just lose more money, though it will take longer. Being capitalized protects one from drawdown, but good traders don't really have huge drawdown relative to account size from what I've seen. A good trader may have drawdown, but their risk will be such that it will not significantly affect their account balance. It's when risk is out of control that account size becomes a problem.

 

Yes, they suck amongst the best in the same way that the 1000th ranked tennis player sucks compared to the top 100 or top 10. But, someone earning 1200 a month on average on a 100k account is doing a whole lot better than almost all traders.

[Dutchie 10]

Trading doesn't really work that way. I once learned from a trading veteran that a fisherman going out to sea every day doesn't always come home with fish. It is the same with the markets. If you're a good trader you can only take what the market is willing to give.

 

Next to that, don't fall in the trap of "Overtrading" meaning you always need to be in the market. Sometimes the best decision you can make is to stay on the sideline and wait for a better opportunity (meaning: better odds). 2 trades a day should be enough, 3 at most in case one of those two is a loser.

 

Don't trade until the first 1½ hours have passed to get a better view of the markets.

 

Cheers,

 

Peter a.k.a. Dutchie

[joshdance 10]

Trading doesn't really work that way. I once learned from a trading veteran that a fisherman going out to sea every day doesn't always come home with fish. It is the same with the markets. If you're a good trader you can only take what the market is willing to give.

 

Next to that, don't fall in the trap of "Overtrading" meaning you always need to be in the market. Sometimes the best decision you can make is to stay on the sideline and wait for a better opportunity (meaning: better odds). 2 trades a day should be enough, 3 at most in case one of those two is a loser.

 

Don't trade until the first 1½ hours have passed to get a better view of the markets.

 

This all varies depending on the trader, and his style of trading. Many traders ONLY trade the first couple of hours, for example. For day trading--and by that I mean some trades will last 2 minutes, others 30 minutes, few will last more than an hour or so--most markets are "willing to give" almost every day, say, 90-95% of days there are great opportunities. It doesn't mean all of those days will be profitable, and I think a measure should be taken on a weekly basis versus a daily basis, but what I'm saying is that many traders actually do make money every day -- I see them on my broker's board, and I have made money on 11 out of 14 trading days this month, and I'm not even trading that well this month. I'd imagine that traders much better than I am are making money literally 95% of trading days.

 

Setting guidelines like 2 or 3 trades are enough, is based on your experience, and is not "right" or "wrong," just what you believe. Traders who are holding for a larger move may only take 2 trades, but others may take quite a few more, and other traders may only take 1 per week. Personally I average about 8-12 trades per day. If I take more, it's usually not a good sign, and if I take less, it usually means that I did not take full advantage of my opportunities as I saw them.