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Minimum Balance to Trade Full time?

  • #41
  • Nov 2, 2018 7:40pm Nov 2, 2018 7:40pm
Quoting Rennaissance
{quote} I can identify with the story. Terrible mistake, terrible. Quit your Job only when your balance is enough to live without trading and 2, that balance is from trading. It's very sad to see someone working hard and accumulating wealth just to throw it out on something he doesn't understand.
No, I understood it. The way I look at it is that you work hard to for example compete in Olympics. You find yourself of the caliber to do so. Then you get in and find out competing in the Olympic venue is different then in your city's venue with all your support system around. How else would you find out how different things would be other than throwing yourself in? You can listen to stories of how others did it or didn't do it but that just stokes you up to do it more. I don't think it was a mistake. I wish I was as skilled as I am now but I wouldn't be if I hadn't taken that step to begin with. All part of the journey.
  • #42
  • Edited Nov 3, 2018 12:20am Nov 2, 2018 8:26pm | Edited Nov 3, 2018 12:20am
Quoting alphaomega
Minimum Balance to Trade Full time? 500K-$1M This will enable you to earn at least 1K per day on average with very low risk and low stress. If you think that you can make a living with 50K - you are delusional! With 50K you will have to take big risk on regular basis in order to make enough money just to survive (forget about capital growth). 2-3 bad months in a row and you are out of business..... back on your day job.
Agree. I think I heard or read it somewhere so sharing the gist of it here.... related to retirement but also to trading imo

In order to retire and live on interest WITHOUT touching principal, you need a balance of 300 times your monthly expenses. With 300 times, you will only need to earn 4% / year on interest (with negligible risk to capital) to cover your living expenses. Anything about 4% grows the pot even bigger. Think about how peaceful your retirement would be if this is possible. I ran this model with a colleague of mine and he used the same model as his primary investment strategy using 8% for past 2 decades and he said, it is very much doable with just 8% annual returns. The same guy also went 90% cash last year anticipating a correction and then dumped a million just weeks before the recent correction and lost big so go figure :-

I would never quit until I have a proven strategy for TWO Consecutive Years of % return to accommodate living expenses for the entire year. Monthly or weekly or daily targets are just insane with 3 mouths to feed and large bills to pay and have a decent life style.
Staying in my lane...
  • #43
  • Nov 3, 2018 12:40am Nov 3, 2018 12:40am
Minimum Balance to trade full time has no right or wrong answer. My advise is not to immediately consider quitting a job, but first develop a passion for trading and do not assume you will be successful immediately.

In this business there are generally more losers than winners. It does not matter the amount of Capital initially invested and the statistics show that new traders form the majority of losers.

Invest a little amount and start slowly. Some brokers accept as little as two hundred and fifty dollars to commence trading, you may start with that, then divide that amount by 20, that should be the maximum amount per trade. After twenty trades, assess your strategy whether it is profitable or not. Obviously at the initial stage you can only trade in micro lots. If your strategy is profitable, keep trading, otherwise change the strategy and repeat the process until you are comfortable and the strategy is profitable.

If you are still in this business after about 100 trades, then you may want to move on to trading bigger, but regardless of the amount made, never become complacent or overconfident.

Trade to stay in the business for as long as you can, but please do not quit your job yet
  • #44
  • Nov 3, 2018 12:51am Nov 3, 2018 12:51am
Quoting hilmy83
{quote} so basically it's not the balance that matters here, it's what your average daily earning is that matters. if you have 20k and you earn 1k vs 100k balance earning the same amount, to me both scenarios will work out. again, like you said, it depends on the strategy.
That's a very good point, Hilmy.

@Dasilvja
Your balance is only one of three ingredients needed to make things work; the other two being your strategy and consistency. You don't have to limit yourself to one strategy either. What I do is run a slow earner on a higher balance account for approx. 10% a month to have a base covering my monthly costs and then some, and a couple of higher risk lower balance accounts to play with, using aggressive strategies. Whatever I make of those is a cherry on top. Such diversification of approaches is good to keep one's stress levels down, imo. Not to mention that little fun factor.
Be flexible in your thinking.

Still, I'd say 30k (GBP (in the UK)) is the minimum starting point.
mind over matter
  • #45
  • Nov 3, 2018 2:47am Nov 3, 2018 2:47am
you may want to look at this https://www.forexfactory.com/autrade...ab.list-page.5 , anything is possible if you know what you are doing.
  • #46
  • Nov 3, 2018 10:26am Nov 3, 2018 10:26am
A few things I would be concerned with while looking at the TE you posted a link to, and I'm sure other TE experts could identify other bad statistics.

For one thing, anytime I've worked with a strategy where the equity curve looked perfectly straight or essentially perfect looking, it was a flawed strategy. Also the last update was 39 weeks ago, so did it blow up? The drawdown was way too high, it's likely it blew up.
  • #47
  • Nov 3, 2018 2:49pm Nov 3, 2018 2:49pm
Quoting spotrate
A few things I would be concerned with while looking at the TE you posted a link to, and I'm sure other TE experts could identify other bad statistics. For one thing, anytime I've worked with a strategy where the equity curve looked perfectly straight or essentially perfect looking, it was a flawed strategy. Also the last update was 39 weeks ago, so did it blow up? The drawdown was way too high, it's likely it blew up.
Have you ever achieved 1890.5% profit return?
Also if you look closely at the withdrawals he took out way more than was deposited so "it blew up" comments are just "lol".(assuming its a real TE)
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Dragon Rider
  • #48
  • Nov 3, 2018 2:55pm Nov 3, 2018 2:55pm
It's not about the dollar value of the profit. We all know it takes money to make money. So the larger the account size, the larger the dollar value of the profit. But again, anybody could make giant profits in a short time given a large account as is the case here with 100K+.

The question is whether or not it's consistent. Given that the last update was 39 weeks ago, hmm. That last 37K probably blew up into bits.

If you ask what I think of the strategy, I think it's a grenade.
  • #49
  • Nov 3, 2018 3:09pm Nov 3, 2018 3:09pm
Quoting Dasilvja
So everyone that trades full-time has at least $50,000 in their trading account? All the people in these forums, they're either part-time or they have $50,000? Wow. I didn't realize you needed that much to be a currency trader. Isn't only $25,000 to start trading stocks? I thought people started with forex because you didn't need such a large amount of capital to get going. Kind of a rude awakening.
You can trade 0.01 lots with $2,000 balance never risking more than 0.5% on a trade. You can't live off the profits, but odds are it will take many years to make consistent profits. It's a funny question and I get it a lot. People ask me how to make quick money off trading with little investment. I wonder if they ask their Doctor how they can make quick money off medicine with very little investment? Oh well, that's just my own humble opinion. - G
  • #50
  • Nov 3, 2018 3:24pm Nov 3, 2018 3:24pm
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on a postive roll...
  • #51
  • Edited 9:35pm Nov 3, 2018 3:26pm | Edited 9:35pm
Quoting Graviton
{quote} You can trade 0.01 lots with $2,000 balance never risking more than 0.5% on a trade. You can't live off the profits, but odds are it will take many years to make consistent profits. It's a funny question and I get it a lot. People ask me how to make quick money off trading with little investment. I wonder if they ask their Doctor how they can make quick money off medicine with very little investment? Oh well, that's just my own humble opinion. - G
The logic behind your example - trade 0.01 lots with $2,000 balance never risking more than 0.5% on a trade- and expecting it to grow into large profits is evident in the Bell Curve formation. Actually S curve because the other half doesn't apply here. Image from: https://tradingsim.com/blog/day-trad...u-really-make/

The idea is not to invest that 2K and trade that .01 forever. You trade today to survive so you can trade tomorrow, day after and forever. When your max DD is covered by the profits you make, you increase lots/risk and when that is covered, you do more n more. Yes, it will be slow at first as evidenced by the Bell curve but if you stick with it, you are following all sorts of universal laws that over and over manifest themselves in that Bell curve formation.

People who want to make quick money are trying to beat the formation and indeed it is possible to do it by increasing the slope angle but you'd have to still abide by rules that govern the overall slope. Anything else is an attempt to take short cuts. Not saying it can't be done but there are dangers in doing so that bring on set backs putting the one attempting it at the beginning of the curb.
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  • #52
  • Edited 6:02pm Nov 3, 2018 5:48pm | Edited 6:02pm
Quoting OutThere
I've quit my job to trade full time twice. The pressure to make money becomes enormous. Slow days are killers because you aren't making money and you don't know how long that slow market is going to last. Meanwhile the bills aren't slowing down. The really active days are a seesaw on your nerves because although you might be up, you are under pressure to go higher to make up for slow days and meanwhile, you don't want to be greedy and blow the account. It's like living on the edge. It is in fact living on the edge. No job, no job security, no steady...

Some really excellent points made here.

No illusions, it is tough to try to make a consistent, smooth living from trading because it tends not to work that way, it tends to be much more lumpy how the returns come. It is also way too easy to underestimate many of the psychological pressures that incessantly gnaw away at you. I really feel what has been said here because I also lived it. If I had my time again I would not take the 100% all in, burn the bridges, commitment to earning my living from trading straight away that I did. I got there in the end but I know I didn't take the most sensible or comfortable path to doing so.

Keep the steady income from the job and use trading as a vehicle to bring in some extra earnings on the side. Only when the profits from trading are consistent, high enough, and almost automatic should you consider relying on trading completely. It will save you a lot of stress and heartache, even if you do succeed - and, sadly, most don't.
  • #53
  • Nov 3, 2018 5:51pm Nov 3, 2018 5:51pm
Quoting hilmy83
{quote} here's a good outline for what your balance should be imo. In fact, it's my own yardstick whenever it is i decide to go "full time" trading, although, i feel like having a part time job never hurts take your average win days in $ amount (or whatever currency you trade with). Max of no more than 3 winning days MUST pay for ALL EXPENSES (mortgage/rent, food, insurance, etc.). if you can't pay all your expenses within 3 winning days, don't go trading full time. Average american makes about 50k/year. that's about 4k/month. now you always want...
Pretty good advice, nicely said
  • #54
  • Nov 3, 2018 11:55pm Nov 3, 2018 11:55pm
I've been trading 3.5 years. I took 1 year leave without pay from my 20 year career as a paramedic to try trading full time 4 months ago. Prior to taking leave i had been trading well in that i had taken my $8k account from near zero back up to $8k in 4 months. I also have income from my home as i moved in with my partner, so i thought well as long as i dont screw things up the income from my house can pay my bills and i can work on trading.
In my very first month off work i nearly doubled my account to $20k, then blew $10k in one week, $5k the next week, then pretty much did the same again a few weeks later. I had money saved from an investment property sale so i still had money in the tank, but believe i hit rock bottom a few weeks ago having gone from profit to decent loss in 3 months. For the last few weeks i have been back trading a $5k account, and making $200-$400 2-3 days a week, and <$100 losses 2 days/ week , but back in profit. Yes 200-400/day massive return, in Australia we have 500:1 leverage . I am very happy at this stage being humbled by my losses, and a small profit combined with my house income is enough to keep me afloat while i continue to grow and get experience.
I would agree completely that the pressure of relying on forex as ONLY income is massive, and that the prospect of making a big profit and turning into a trading dickhead and losing it all is also very real. Trading at a level that feels comfortable and keeps you keen and happy is the secret, and theres an enormous amount of lessons to be had before reaching that stage.
I recommend Mark Douglas books eg "trading in the zone" essential reading. I have also been reading about emotional intelligence , about "flood" ( being so stressed u make poor decisions) and "flow" ( being in a calm state and making smart decisions). I thought being a trader would be mechanical, but the lessons i have had to have about emotional intelligence and personal growth in the last few months have been far far bigger than anything i have learnt trading.
I am stubborn and hopeful and have every intent to make it as a day trader . I will achieve this by continuing to learn, accept my mistakes, be kind to myself, and push on, with a smaller trading account and by taking profits and paying myself weekly rather than letting my account grow, and accept that at any time i can be completely wrong with my trades, and be at peace with that. I also still have my job to go back to in 8 months if it doesnt work out.
Kind regards h
  • #55
  • Nov 4, 2018 12:07am Nov 4, 2018 12:07am
Quoting Oldtraderman
{quote} Of course you can ignore compounding, it depends entirely on individual capital resources and lifestyle wishes. As a practical example, I have earned my living exclusively from trading for almost a decade now and I have never used compounding. I have my starting capital sum on Jan 1st each year to trade with and withdraw all net profits each month to fund my life. Net account size, position size and risk assumed do not change through the year. Now, of course, this requires that I have a sufficient account size for my needs to start off with...
Excellent post. I feel like this is where I'm at. I tried to let my account grow exponentially and lost all control. I want control. I think having a steady account balance and paying profits, and working smarter for better returns for that balance is a big positive plan !! It takes greed out of the equation, to instead have good balance and moderation.
Happy to hear your story cheers
  • #56
  • Edited 12:30am Nov 4, 2018 12:09am | Edited 12:30am
First, if you are actually a successful trader you would have statistics to back up your claim so you would know your real capabilities. Second, if you are smart enough to be successful trading Forex, then you should be smart enough to make a budget and know your numbers. If you don't know your numbers, then you are not ready to trade full-time. You should have a business plan detailing your trading system, your lot calculations, your trading pairs, your trading hours, and your projected earnings at the very least. Since I have not seen yours, it is impossible to advise you, but again, if you are smart enough to profit, you should be smart enough to build your business. Good Luck.
You cannot be extraordinary by being normal
  • #57
  • Nov 4, 2018 12:17am Nov 4, 2018 12:17am
Quoting OutThere
I've quit my job to trade full time twice. The pressure to make money becomes enormous. Slow days are killers because you aren't making money and you don't know how long that slow market is going to last. Meanwhile the bills aren't slowing down. The really active days are a seesaw on your nerves because although you might be up, you are under pressure to go higher to make up for slow days and meanwhile, you don't want to be greedy and blow the account. It's like living on the edge. It is in fact living on the edge. No job, no job security, no steady...
I absolutely can relate to this, and have thought of getting a shirt printed with " not rich yet" because people do ask lol.
  • #58
  • Nov 4, 2018 12:22am Nov 4, 2018 12:22am
I would say first bank money for 2 years living expenses or at least living expenses for a year before becoming a full time trader.
I also suggest to have the capital of 20 to 10 times of your monthly expenses.
newzTrader
  • #59
  • Nov 4, 2018 12:28am Nov 4, 2018 12:28am
Quoting hellsbells
{quote} I think having a steady account balance and paying profits, and working smarter for better returns for that balance is a big positive plan !!
This sounds like a plan. I was listening to a trading podcast the other day and the trader withdraws profits at the end of each month and restarts each month with his base amount ($30K in his case). So he doesn't eat his gains by much when he has a losing month.
  • #60
  • Nov 4, 2018 12:54am Nov 4, 2018 12:54am
the only advise that i can give never deposit huge amount in that market.... at least not before build real record for more than one year and master your strategy very well and can know how much you will lose in worst period --- don't repeat my mistake and just deposit large amount ... you will lose it all...
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