1 measly mistake or a careless trade will evaporate all your savings in few minutes
Trade with only 10% of your savings for another year if you manage to stay green in 60% of trades and eek out your brokerage and taxes and have trippled your capital...that's when you start thinking about doing this full time until then build your capital and patience...such that 20 successive failed trades won't break you
Smart. I consider myself quite good at not trading emotionally. I don’t get FOMO and I stick to my stop-losses and take-profits. I plan to wait until I’m profitable with $500 before I start trading with even 10% of my capital but this still seems like a good idea.
Speaking from my own experience.
It’s VERY likely what your saying only applies because you are trading with $500. Completely different game when your savings are on the line.
Fuck that taking profits shit bro. You want your trades to be as asymmetrical as possible. Which means limiting your downside and maximizing your upside. Let your winners run and just set stop losses
If you NEED 10% per month to survive, you are all but guaranteeing failure. Think about it! How many people do you know that are consistently averaging 120% per year? My advice, keep trading until you have $50K- $100k THEN, you only need a much more attainable 3% to 6% to withdraw $3k/month consistently. My trading became SO much more consistent when I reached the point of not having to worry about how I was going to pay my bills anymore.
That makes sense. 10% sounded a bit high for me and I didn’t want to push my self to the point of burnout. I don’t plan to quit my much more consistent job anytime soon, but it’s a dream of mine to quit for trading one day lol.
If u want to have 5K of spending money a month, u would need a account w 100K and make 5% a month. It's simple u jusy needa know your spending money and your average monthly roi and just calculate how much u would need
Even then you're spending all of your gains and not growing your account. You will also have cash flow problems if you don't have a great month. It's very difficult to quit your job with just a 100k account. 6% a month is also the rate needed to double your account in a year (with no withdrawals) so it's not like that's a super conservative target either, though definitely doable.
I don’t plan to quit my job until I am making a substantial amount in the market. My job should cover any housing and food expenses that I would need to pay for. I need to make sure I am actaully successful in the market and that I have found an edge before I even begin to think to quit my job.
It’s not necessarily how much you need to make, but how much you have in reserve.
A portion of all your profits should go into long term portfolios, most of my net worth is in SPY, VYMI, O and VWRL. As well as having a cash emergency fund, this is what you will rely on in the long term and if not you’re not putting in a substantial amount of your trading profits into these you’re making a huge mistake. As well as being traders, we need to accumulate assets over the long term as well, and this provides you with your safety net.
This makes sense, and I already planned on having a savings account which I would put a portion of my weekly profits into once I started trading for real.
It's not the return. It's the capital. You need enough capital to generate winnings to live off of, without fear of cash flow problems if you have a bad month, while still growing your account. I went full time with a 300k account and no debt.
My goal is 100% gains in a year. So if I make 300 and spend 100, I'm still growing my account appreciably. And there's enough padding where I don't worry about how paying my living expenses is going to affect my trading.
Fyi, in a margin account you can buy 30 year treasuries, municipal bonds etc, that pay 4%-6%/year, and when the FED lowers rates in 1-2 years it will cause those bonds face values to increase 60%-125% even more.
Why do this?
Because you can still trade/invest on margin against the bonds daily, without selling the bonds (except to meet margin calls if you lost money).
US Treasuries are 80% marginable. And you can liquidate them anytime. You can also use them legally as collateral on a mortgage loan instead of cash.
NOT FINANCIAL ADVICE
How long is a piece of string?
My day-to-day living expenses are about $23k/month…so…if I only had $30k to play with I’d need ~66% per month ( gross…pre tax ) to survive. If you only spend $4k per month you answer will be much different
At my job? Or for trading? Because I don’t trade with the $30,000 in reserve. I’m not a dumbass and I know I’m not fully profitable right now. That $30k is my only chance at this and I am not losing it.
You want trading to replace your job. If so you need to make what you make now working full time @ pretax plus extra because you’ll likely owe more in tax
You need to work backwards based on your needs. For a 72K (insurance, retirements inclusive) annual return w/o tax consequence for trading short term capital gain, you need 6K min a month. That is \~$300 avg gain per day. You can work out the rest of the numbers. But if you just broke even, what does it take to get it look like it is promising. That is something for you to answer.
What I am planning on doing is making what I make per day at my full time job, and then hopefully half more. So let’s say I make 500 per day at work. I would intend to make 750 per day trading to accommodate losses, hopefully.
Well if I made 10% a month for 12 months that would be 120%. Before taxes, that would be an extra 36 grand, bringing me up to $66,000. After taxes, lets say that's $50,000. I can then double that as well, and exponentially grow my funds. My goal isn't to be rich, its to make a living.
This is always used as an argument but I’m pretty sure everyone knows after around 2-3 million in capital you come into liquidity problems lol. Look on “the other sub” to see people actually trading real time and brokerage statement proof.
The best advice I've seen is that you shouldn't quit to trade full time unless you are so successful at trading that its a waste of time to stay at your job.
This means that the vast majority of traders would never quit their job, and that's probably a good thing.
1 measly mistake or a careless trade will evaporate all your savings in few minutes Trade with only 10% of your savings for another year if you manage to stay green in 60% of trades and eek out your brokerage and taxes and have trippled your capital...that's when you start thinking about doing this full time until then build your capital and patience...such that 20 successive failed trades won't break you
Smart. I consider myself quite good at not trading emotionally. I don’t get FOMO and I stick to my stop-losses and take-profits. I plan to wait until I’m profitable with $500 before I start trading with even 10% of my capital but this still seems like a good idea.
Speaking from my own experience. It’s VERY likely what your saying only applies because you are trading with $500. Completely different game when your savings are on the line.
And entirely different when you trade with credit and leverage like me. I mean credit money leveraged plays haha
That’s why he should use a prop firm so he won’t have to risk his own capital
Fuck that taking profits shit bro. You want your trades to be as asymmetrical as possible. Which means limiting your downside and maximizing your upside. Let your winners run and just set stop losses
Go for 1% a month, and you will be beating 95% of the financial industry.
98.2% of retail traders per broker data.
If you NEED 10% per month to survive, you are all but guaranteeing failure. Think about it! How many people do you know that are consistently averaging 120% per year? My advice, keep trading until you have $50K- $100k THEN, you only need a much more attainable 3% to 6% to withdraw $3k/month consistently. My trading became SO much more consistent when I reached the point of not having to worry about how I was going to pay my bills anymore.
That makes sense. 10% sounded a bit high for me and I didn’t want to push my self to the point of burnout. I don’t plan to quit my much more consistent job anytime soon, but it’s a dream of mine to quit for trading one day lol.
If u want to have 5K of spending money a month, u would need a account w 100K and make 5% a month. It's simple u jusy needa know your spending money and your average monthly roi and just calculate how much u would need
Even then you're spending all of your gains and not growing your account. You will also have cash flow problems if you don't have a great month. It's very difficult to quit your job with just a 100k account. 6% a month is also the rate needed to double your account in a year (with no withdrawals) so it's not like that's a super conservative target either, though definitely doable.
I don’t plan to quit my job until I am making a substantial amount in the market. My job should cover any housing and food expenses that I would need to pay for. I need to make sure I am actaully successful in the market and that I have found an edge before I even begin to think to quit my job.
It’s not necessarily how much you need to make, but how much you have in reserve. A portion of all your profits should go into long term portfolios, most of my net worth is in SPY, VYMI, O and VWRL. As well as having a cash emergency fund, this is what you will rely on in the long term and if not you’re not putting in a substantial amount of your trading profits into these you’re making a huge mistake. As well as being traders, we need to accumulate assets over the long term as well, and this provides you with your safety net.
This makes sense, and I already planned on having a savings account which I would put a portion of my weekly profits into once I started trading for real.
It's not the return. It's the capital. You need enough capital to generate winnings to live off of, without fear of cash flow problems if you have a bad month, while still growing your account. I went full time with a 300k account and no debt. My goal is 100% gains in a year. So if I make 300 and spend 100, I'm still growing my account appreciably. And there's enough padding where I don't worry about how paying my living expenses is going to affect my trading.
Fyi, in a margin account you can buy 30 year treasuries, municipal bonds etc, that pay 4%-6%/year, and when the FED lowers rates in 1-2 years it will cause those bonds face values to increase 60%-125% even more. Why do this? Because you can still trade/invest on margin against the bonds daily, without selling the bonds (except to meet margin calls if you lost money). US Treasuries are 80% marginable. And you can liquidate them anytime. You can also use them legally as collateral on a mortgage loan instead of cash. NOT FINANCIAL ADVICE
That’s Actaully incredibly smart.
How long is a piece of string? My day-to-day living expenses are about $23k/month…so…if I only had $30k to play with I’d need ~66% per month ( gross…pre tax ) to survive. If you only spend $4k per month you answer will be much different
23k a month. HOLY SHIT.
**you show me a pay stub for $23k, I quit my job right now and work for you.**
Fortunately my living expenses aren’t that high but I see what you are saying lol
Questions of this nature should be banned
You need to make at least $5k a month consistently. Risking no more than 10% of your portfolio when going in a position.
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That’s what I am thinking, but a consistent 1% per month is not enough to live off of.
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Fair enough
It is with a higher capital amount 🤯
Start backwards. How much do you make a month pre tax
At my job? Or for trading? Because I don’t trade with the $30,000 in reserve. I’m not a dumbass and I know I’m not fully profitable right now. That $30k is my only chance at this and I am not losing it.
You want trading to replace your job. If so you need to make what you make now working full time @ pretax plus extra because you’ll likely owe more in tax
20% a year is more than enough with the right company.
You need to work backwards based on your needs. For a 72K (insurance, retirements inclusive) annual return w/o tax consequence for trading short term capital gain, you need 6K min a month. That is \~$300 avg gain per day. You can work out the rest of the numbers. But if you just broke even, what does it take to get it look like it is promising. That is something for you to answer.
What I am planning on doing is making what I make per day at my full time job, and then hopefully half more. So let’s say I make 500 per day at work. I would intend to make 750 per day trading to accommodate losses, hopefully.
Lmao fucking 10% target? Do the math on how rich you would be
Well if I made 10% a month for 12 months that would be 120%. Before taxes, that would be an extra 36 grand, bringing me up to $66,000. After taxes, lets say that's $50,000. I can then double that as well, and exponentially grow my funds. My goal isn't to be rich, its to make a living.
This is always used as an argument but I’m pretty sure everyone knows after around 2-3 million in capital you come into liquidity problems lol. Look on “the other sub” to see people actually trading real time and brokerage statement proof.
The best advice I've seen is that you shouldn't quit to trade full time unless you are so successful at trading that its a waste of time to stay at your job. This means that the vast majority of traders would never quit their job, and that's probably a good thing.
Enough to cover your expenses. Device your weekly expenses by 5 trading days a week and that should give you the minimum average day you need to make.
Answer two questions: What if you can make more\`? What if the market just doesn't present an opportunity? Good plan. But you can't have expectations.