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Minimum Balance to Trade Full time?

  • #61
  • Nov 4, 2018 12:58am Nov 4, 2018 12:58am
Quoting hellsbells
{quote} 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
There are high risk, high leverage accounts and there are low risk, conservative accounts. First requires just a small amount of money. With compounding and high leverage, the capital can be grown exponentially. After some level reached, you secure some of the funds and keep gambling with the rest. Experienced people with the right mind do not do such thing with big money.
Low risk conservative account is based on steady growth with low profit and low drawdown. This is done with big money. Let's say if you start with 200k with 7-8% monthly return, in a year you will be worth over 300k and this can be done without too much risk. For a such account, of course, playing with 100$ or even $1000 has no much meaning.
As Above, So Below
  • #62
  • Nov 4, 2018 1:08am Nov 4, 2018 1:08am
Quoting tashkent
{quote} There are high risk, high leverage accounts and there are low risk, conservative accounts. First requires just a small amount of money. With compounding and high leverage, the capital can be grown exponentially. After some level reached, you secure some of the funds and keep gambling with the rest. Experienced people with the right mind do not do such thing with big money. Low risk conservative account is based on steady growth with low profit and low drawdown. This is done with big money. Let's say if you start with 200k with 5% monthly...
yes. for high leverage what I use to do is to put 1/10 of my amount available for trade and withdraw when it grow above 100%.
don't predict direction, but dance with flow of water
  • #63
  • Nov 4, 2018 1:09am Nov 4, 2018 1:09am
Start with $500-1000 and grow it to $50k-150k etc after that just trade on maintenance mode taking out all profits as your paycheck.

At that point you may quit your job and feel good about it.

How many can get to this level .
Dragon Rider
  • #64
  • Edited 1:08am Nov 4, 2018 1:10am | Edited 1:08am
Sorry me again.

There are some great answers here, considering your question was abstruse in the scheme of trading.

For me i know i can make $400-$1k / week on a $5k account trading .5 lot trades (up to 4 at a time) risking $30/trade and trading well.

I also know i can lose $5k in 30min trading 2lot size max 6 trades and being unable to think straight and watching my account shrink from $20k to $15k , and do it again the next day lol.

Losses happen in forex, your account size and trading size WILL affect your ability to trade well.

Dont open your first live account with $25k regardless of how amazing you are with demo.

Try $200 and build it. Your question does make me think you dont know what your trading capability is. Everyone is different

Good luck
  • #65
  • Edited 1:45am Nov 4, 2018 1:15am | Edited 1:45am
Quoting tashkent
{quote} There are high risk, high leverage accounts and there are low risk, conservative accounts. First requires just a small amount of money. With compounding and high leverage, the capital can be grown exponentially. After some level reached, you secure some of the funds and keep gambling with the rest. Experienced people with the right mind do not do such thing with big money. Low risk conservative account is based on steady growth with low profit and low drawdown. This is done with big money. Let's say if you start with 200k with 7-8% monthly...
If i had $200k id be happy with low risk. Absolutely risk and reward is unique for everyone. Every trader needs to find their niche based on funds , ability, and risk aversion. For me as a trader i know i cant be trusted with bigger amounts yet. My ability to trade well when my account doubled went down the toilet, but you have given me an aha moment. If i had traded 1lot size instead of 2lot size at $20k i wouldve come out of the situation a lot better by thinking clearer with only doubling my trade size rather than quadrupling it ( i started with .5lot size at $5k) . Im working towards increasing my comfort level with larger amounts, whilst paying myself and being comfortable. I do understand my risk can decrease as my account grows, thats a very good point and an obvious one.
  • #66
  • Nov 4, 2018 9:08am Nov 4, 2018 9:08am
1% from $1,000 = $10
1% from $10,000 = $100
1% from $100,000 = $1,000
1% from $1,000,000 = $10,000

Its about figures ... rest are the same.
  • #67
  • Nov 4, 2018 11:18am Nov 4, 2018 11:18am
Quoting hellsbells
Sorry me again. There are some great answers here, considering your question was abstruse in the scheme of trading. For me i know i can make $400-$1k / week on a $5k account trading .5 lot trades (up to 4 at a time) risking $30/trade and trading well. I also know i can lose $5k in 30min trading 2lot size max 6 trades and being unable to think straight and watching my account shrink from $20k to $15k , and do it again the next day lol. Losses happen in forex, your account size and trading size WILL affect your ability to trade well. Dont open your...
Hellsbells your posts are very eye-opening and motivating. Much appreciated and thank you for your insight.
  • #68
  • Edited 1:49pm Nov 4, 2018 1:28pm | Edited 1:49pm
Quoting hellsbells
{quote} but you have given me an aha moment. ....... . Im working towards increasing my comfort level with larger amounts, whilst paying myself and being comfortable. I do understand my risk can decrease as my account grows, thats a very good point and an obvious one.
aha indeed.....this is a critical realization any successful trader must arrive at. If you are uncomfortable with putting some x amount of trading equity at risk, then that x amount is too large. If you lost 25% or more of your equity in a week...your risk management was poor. If you have to put excessively large percentage of your equity at risk in order to realize your desired returns, then your equity is too small.

The answer to the riddle that few figure out: 1) Learn to trade with effective risk management. 2) Develop a realistic understanding of what your returns can be WITH EFFECTIVE AND CONSISTENT RISK MANAGEMENT. 3) Based on what you learned in 1) and 2), establish sufficient trading equity that allows you to derive your required returns from trading.

Most wannabe traders never get past 1). The fact is, if you can get past 1) and 2) then the OP's orignal question is answered in 3).

In reality, if you can trade a $1k account with good and consistent risk management, then you can trade a $1MM account the same way.

Most new traders are focused on what they can win. Wrong. What matters is what you risk to get whatever it is you win. If you are realizing 25% returns in a month but you are risking 25% or more of your equity to get there, eventually that risk will catch you and you will suffer large losses. Inevitably, large losses will compound in a poor risk management regime and you will lose most or all of your equity.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #69
  • Nov 4, 2018 2:33pm Nov 4, 2018 2:33pm
Just some thoughts....

***Know the truth about your trading numbers***
Examine your trading history P/L. How much do you make per trade? How many pips do you intend to risk? How much have you been making per trade on average?
Look at it in real dollar terms (or your currency of choice depending on where you live).
For me personally I need 4k in cash (after taxes) every month for my living expenses to be comfortable minimum.
Are you risking 10 pips to make 50 or more? Excellent! Are you risking 50 pips to make 10? Big mistake.
You want a 1/3 risk return ratio minimum to even consider a trade. I always assume I'm going to be wrong at least half of the time. If your win % is higher than 50% then great! But you need to know what your numbers are.
How big is your biggest winner? How big is your biggest loser? What happened on your biggest loser? Did you trade with a plan and execute it? Or, did you have a loss that you had a hard time cutting and it got away from you? Or was the large loss unavoidable? (Fast market, weekend gap, went out to lunch, etc)
Also, are you trading different strategies concurrently? If so you need to separate the data to get a better estimate of what to expect from each strategy.

Once you've had a chance to review your numbers then the real work begins. Then you have to constantly keep track every day and use that data to improve your trading. Your goal should be to maximize your average winners and minimize your average losers. This can only be done through the process of taking hundreds and thousands of trades and keeping track of and utilizing your data.

Once your know on average what you expect to make on your winners after accounting for your losers you can calculate how much you need in your account and how much to risk per trade to sustain your preferred income. If you're risking more than 2-5% of your entire account on any one trade you're increasing your chance of blowing up. It's not worth it.

To quote Paul Tudor Jones:
"I LOOK FOR OPPORTUNITIES WITH TREMENDOUSLY SKEWED REWARD-RISK OPPORTUNITIES. THERE’S NO REASON TO TAKE SUBSTANTIAL AMOUNTS OF FINANCIAL RISK EVER, BECAUSE YOU SHOULD ALWAYS BE ABLE TO FIND SOMETHING WHERE YOU CAN SKEW THE REWARD RISK RELATIONSHIP SO GREATLY IN YOUR FAVOR THAT YOU CAN TAKE A VARIETY OF SMALL INVESTMENTS WITH GREAT REWARD RISK OPPORTUNITIES THAT SHOULD GIVE YOU MINIMUM DRAWDOWN PAIN AND MAXIMUM UPSIDE OPPORTUNITIES”

Once you understand your edge and the numbers behind it then it just becomes a game of building your account and trying to exploit that edge as much as possible (also called turnover) to maximize your gains. The effects of compounding are astounding.

Hope this helps!!!!
  • #70
  • Nov 4, 2018 2:53pm Nov 4, 2018 2:53pm
I'm not implying that I make 4k after taxes, thats what I make. This year I'll fall into the 22% tax bracket.
  • #71
  • Nov 4, 2018 2:59pm Nov 4, 2018 2:59pm
"For me personally I need 4k in cash (after taxes) every month for my living expenses to be comfortable minimum."

Thats not explicit?
  • #72
  • Nov 4, 2018 2:59pm Nov 4, 2018 2:59pm
Anyways not the point of my post but thanks for pointing that out. Really helpful.
  • #73
  • Nov 4, 2018 3:02pm Nov 4, 2018 3:02pm
Go ahead and point to your hearts content

Doesn't change the fact that you need to know your numbers.

If anyone would like help analyzing their numbers please post I'm happy to help.
  • #74
  • Nov 4, 2018 3:24pm Nov 4, 2018 3:24pm
Quoting Dasilvja
I was just wondering if any experienced full-time traders are able to do that with a small account. Do I need $50,000 before I can trade full time? I know one should demo trade until they have a consistently profitable trading plan. Assuming one has done all that, what is the smallest account size someone could have while earning enough, exclusively from trading, to earn a living.
It all depends on the country you live- dollar exchange rate.
Make all mistakes in demo and rain in pips in live account
9jatrader All Time Return: -66.1%
  • #75
  • Nov 4, 2018 3:27pm Nov 4, 2018 3:27pm
Just a little more over disclosure on my failings...

When my account hit $20k and i started trading 2lot per trade

1- i thought i was queen bee and my trading plan went out the window . Normally i wait for confirmation then make 2 trades, and quickly pyramid in with.2 more. Instead I placed 4 trades straight up too early and found my assumption of bullish breakout was in fact shooting star (for eg) , then discovering i was wrong promptly closed at loss and made dumb opposite trade in range bound market only to lose again . In short my trading execution was that of an idiot.

2- If for eg when trading .5lot i was looking for $100 profit, that should've translated to looking for $400 profit for each 2lot trade. Instead i was happily taking $250 profits for 2lot trade so my return for risk was wrong. Those numbers arent exact of course but you get my drift. I need to increase my return expectation when i trade larger lot sizes.
I have no idea how anyone can smoothly exponentially grow their account. Good luck to you if you can
  • #76
  • Nov 4, 2018 3:33pm Nov 4, 2018 3:33pm
Quoting lddd
There is no yes or no answer. First you need to know what a „living“ costs you. For some people depending on their location and lifestyle maybe a 500 USD monthly is a living for some people maybe a 50000 is not even a living. So assuming that you are a very good trader and can constantly achieve a 20% return per year on a 50k funded account this would somewhere equal to a 830 USD monthly (before tax). Now does this sound sexy to you? Also keep in mind that there is no guarantee you will always reach your goals. You will also suffer from losing periods...
You hit the point- just similar to what I just shared.
Make all mistakes in demo and rain in pips in live account
9jatrader All Time Return: -66.1%
  • #77
  • Nov 4, 2018 3:42pm Nov 4, 2018 3:42pm
Quoting hellsbells
Just a little more over disclosure on my failings... When my account hit $20k and i started trading 2lot per trade 1- i thought i was queen bee and my trading plan went out the window . Normally i wait for confirmation then make 2 trades, and quickly pyramid in with.2 more. Instead I placed 4 trades straight up too early and found my assumption of bullish breakout was in fact shooting star (for eg) , then discovering i was wrong promptly closed at loss and made dumb opposite trade in range bound market only to lose again . In short my trading execution...
Losers happen often. The key is to make sure you enter with a plan. If it doesn't work get out. Did you have conviction on the trade? Is it something you've seen before hundreds of times? Always remember there is a big difference between good trades and bad trades regardless of whether you make money or not. Take out the guesswork. The important thing is you recognized it and now you're thinking about it. Every millionaire trader learns the most from their losses. Play to your strengths. What plays are you doing well? Which ones aren't working? If you're just guessing you know how thats gonna end up.
  • #78
  • Nov 4, 2018 3:48pm Nov 4, 2018 3:48pm
The amount needed in the investment account will vary from person to person depending on their situation. What won't vary is the need for a significant reserve fund. You should have at least 18-24 months of your current pay in your bank account before even considering going full time. If you want to feel pressure, put yourself into a situation where you MUST be profitable for the month or you don't have enough to live on.

You need this cushion of reserve funds to ride through bad times. They will happen, it is inevitable. Nothing worse than being down at the end of a month and knowing you need to have a major winning day to be able to pay the bills this month. Most people will make the worst decisions under those conditions and then what? Tell your family you have to move out because you cannot afford to live there anymore?

The ideal situation in this case is to use profits from trading to build this reserve account. Doing it this way will give you the confidence needed to go full time. And don't give me this crap about needing to trade a particular time of day to be able to make money. For over 5 years I got up at 2 am local time to be able to trade the European session before going off to work, then returned home to trade some of the Asian session before going to bed. If you want it bad enough you will do whatever it takes. There is nothing more satisfying than handing in your resignation and when they ask you where you are going you tell them "home".

So, stop thinking about how much you need in your investment account to go full time. 1 million dollars won't do you any good if you have a losing month and are living month to month.
  • #79
  • Nov 4, 2018 4:13pm Nov 4, 2018 4:13pm
Quoting Dasilvja
I was just wondering if any experienced full-time traders are able to do that with a small account. Do I need $50,000 before I can trade full time? I know one should demo trade until they have a consistently profitable trading plan. Assuming one has done all that, what is the smallest account size someone could have while earning enough, exclusively from trading, to earn a living.
That minimum number applies differently to everyone and there are many things to consider. I would say 250k at least. You want to have 50k on the side, to make sure you don't need to withdraw to cover the cost of living for some time, and to have a mental buffer that you don't end up under the bridge if it doesn't work out. That will allow you to trade on 200k account and build it (if you know what you are doing) to a much larger scale with the power of compounding. It will also allow you to trade with no / very small leverage and to risk no more than 1% of your account per idea / trade and still deliver decent nominal returns.

You need at least ~ 30k a year just to survive (assuming you are alone with no family) if you live in a metropolitan area somewhere in the west. If you quit your job and start trading "full-time" with 50k you are almost destined to fail because your yearly breakeven rate of return would be 60% (i.e. 30k profit) and that would put an insane emotional pressure on you. You would need to risk more and trade with high leverage on top of that, massively stressing out anytime you have a rough period.
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  • #80
  • Nov 5, 2018 2:41am Nov 5, 2018 2:41am
Quoting 9jatrader
{quote} It all depends on the country you live- dollar exchange rate.
Agreed to what you say. I'm from India and to live a luxurious life in the most expensive Indian city (Mumbai) 5-6K monthly is good enough. If you are able to generate 5% monthly from your system, I say a $100K investment should be good enough
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