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(can) small accounts make a living ?!

  • #101
  • Mar 3, 2009 7:14am Mar 3, 2009 7:14am
Quoting Jimmy Jones
I have cut my expenses to the minimum possible, and have an accurate idea of how much I need to make each month to cover the few remaining bills I have left. As far as a goal for trading gains each month, I have stopped doing that because it was effecting my trading decisions in a negative way.

So I guess for now my plan is to continue to work part time to get all debt paid off and add to my trading account while building up a trading history that will give me a better idea of what I can expect from myself in terms of gains over a 12 month period....
Jimmy,

Excellent approach.

Precisely what I would suggest - in fact, I ran my trading the exact same way and still do now.

It is very wise when staring to run any business not to count on future profits straight away. Of course you can make profit projections, but they must be based on something viable....we come to that later.

Thank you for your post.

H. Rearden
  • #102
  • Mar 3, 2009 7:25am Mar 3, 2009 7:25am
Quoting H. Rearden
I lost my day job and I want to try something different -and the markets promise a possibility.
Quoting H. Rearden
I am fascinated by the markets, that's why I want to become a trader.
these 2 quotes would describe my situation best.

I have been trading part time for over 3 years now.. but only since January I am doing it full time.

I do have a plan with expenses and targets for next 18 months.
  • #103
  • Mar 3, 2009 7:30am Mar 3, 2009 7:30am
Quoting H. Rearden
Radiant,
So, your wife is content with you trading the markets (or planning to)?
As long as I trade micro-accounts why would she be worried I'm not a gambler, I didn't blow an account completely even once -- once I see that what I do is not working (i.e. drawdown like 60%), I stop and take out the remaining money. And my wife knows that.

Quoting H. Rearden
Back to the plan: Will (or is) trading going to be your main or only income or have you got financial help from your other half?
I'm a freelancer but I'd like to quit -- maybe this gives you some idea. I work at home, but not very happy with existing career and looking to switch to something less time-consuming and hopefully more profitable. So I'm looking to gradually shrink my freelance workload and grow my trading income.

Quoting H. Rearden
Sorry to ask such personal questions - I am using you (for the discussion) as a guinea-pig if you don't mind.
No problem, I'm quite interested to hear what you have to say and thanks for starting this thread!
  • #104
  • Mar 3, 2009 7:30am Mar 3, 2009 7:30am
I cut my expenses to the bearbone.
Wife holds the ten until the end of the year
then I need to bring at least $1K/month
Plenty of saving to last a couple years.
So I have another 10 months to settle on
$300/week and financial freedom.
So I am going very slowly and enjoying myself.
Forex is a blast
The best strategy games I ever played!
Empty as water and soft as a facing wind mountain
  • #105
  • Mar 3, 2009 7:30am Mar 3, 2009 7:30am
Trading is something I'm practicing. I have other income. I've moved from paper to practice account. I'll likely be here until it's mechanical; a year at least, more if needed. Then I'll move to a small account. When the emotion wears off there I'll upgrade the size. I intend to develop a portfolio. Later I want to trade for others. See where it goes then.
  • #106
  • Mar 3, 2009 7:32am Mar 3, 2009 7:32am
I find this thread very interesting and would like to subscribe to it..Don't know of a way to do this except posting to it..hence this post...
  • #107
  • Mar 3, 2009 7:37am Mar 3, 2009 7:37am
Quoting piccolo
these 2 quotes would describe my situation best.

I have been trading part time for over 3 years now.. but only since January I am doing it full time.

I do have a plan with expenses and targets for next 18 months.
Piccolo hi,

I would say that is a down-to-earth attitude. How is the overall profitability?

H. Rearden
  • #108
  • Edited 7:52am Mar 3, 2009 7:51am | Edited 7:52am
Ok, guys and gals -

Radiantchild, IuSan, inflxshn, Eklavya and all others:

More sensible answers than initially expected from my side which is a great base to build on from here.

Let me also at this point reiterate the aim of this thread: to see if and how a business can be build by trading the financial markets from a retail point of view.

There are (as stated by some more experienced members in the run-up to this thread) massive differences in the approaches of how to grow accounts to immense levels and use accounts to generate regular income. By regular income I mean profits which you have to draw upon to cover you living cost.

The time you will need to invest is another factor, but from my experience it takes more effort in terms of daily screen time to make a monthly/quarterly living then managing an investment of the same size for the purpose of long-term growth.

H. Rearden
  • #109
  • Mar 3, 2009 8:07am Mar 3, 2009 8:07am
Hello Hank Rearden

I’m 20 year old economics student, have no expenses, no obligations.
I am trading my small live account for half a year now and manage to come out BE or with slight loss every month. When I lose my gains it’s mostly because of my wrong mindset (sometimes fear or greed). I believe I’ll be good in five years.

Ronin
the worst horse can be the best one
  • #110
  • Mar 3, 2009 8:13am Mar 3, 2009 8:13am
On a different note:

I have my son running a demo account simultaneously to my own trading with a hypothetical amount that I deem sufficient for a good start.

He places the same trades I do on my personal account according to my instructions (which are obviously different in size). I will at a later point in the thread explain the way I approach the market. We have started that in February to accumulate some data already.

Let me hand over the torch to anyone who might have some specific questions regarding the points already brought up so far.

H. Rearden
  • #111
  • Mar 3, 2009 8:20am Mar 3, 2009 8:20am
Quoting Ronin
Hello Hank Rearden

I’m 20 year old economics student, have no expenses, no obligations.
I am trading my small live account for half a year now and manage to come out BE or with slight loss every month. When I lose my gains it’s mostly because of my wrong mindset (sometimes fear or greed). I believe I’ll be good in five years.

Ronin
Hi Ronin,

Tha fact that you know my first name makes me assume that you are a keen reader (of a certain Philosopher).

As for your progress, hang in there - I will cover issues like the mindset and related psychology at a later stage.

H. Rearden
  • #112
  • Mar 3, 2009 8:43am Mar 3, 2009 8:43am
Quoting H. Rearden
Piccolo hi,

I would say that is a down-to-earth attitude. How is the overall profitability?

H. Rearden
Profitability is great.

With great profitability comes overconfidence and with overconfidence come losses due to overexposure.

I have doubled my money and the profits are consistent.. 1-2% per day. I had only one loosing day and that was because of the reason stated above.

That said, I still do not have enough cap to drain from it for living costs.

Still working on some psychological aspects.. like not jumping the gun and not betting the farm.
  • #113
  • Mar 3, 2009 9:11am Mar 3, 2009 9:11am
Hi Rearden,

Thank you for starting this wonderful thread!!

I have been in live trading for around 6 months, before this I did some demo trade for around 3 months. While demo trading, I tried very hard to search for the so called "holy grail", but after i started live trading, I feel that to be a good trader, psychology plays a very heavy role in this!!

I started with a USD1500 account, "luckily" managed to grow it to USD10000 within the first 3 months, but...when it comes back to reality, i find it very hard to place a trade, and totally leave my planned trade work itself out...i tend to alter lot size, move my profit target, and a lot of stupid things that doesn't follow my trading plan...

I keep making the same mistake again and again...although I made some money out of trading...but i have no confidence at all in my trading plan...

That is why I'm searching in FF Forum, to look for some help, I think i need to re-calibrate myself towards the right direction, and i'm really glad to be on this thread!!

I want to trade for a living!! That is what i always wanted to be...but there are many things I need to learn before reaching this ultimate target!!

Thanks again Rearden for this thread!!
  • #114
  • Edited 9:31am Mar 3, 2009 9:30am | Edited 9:31am
Bearking,

You are most welcome. Parts of your trading plan must have been well-suited for your personlaity, otherwise you would have not made any money at all. There is no need for a dent in your confidence - as you said correctly: a large part (if not the largest) is psychological and your discipline depends on it.

I know from my own experience how it feels to lose trust and confidence and as a result being afraid to pull the trigger. The good part is that this fear comes from somewhere inside you and it also means that you are not gambling. If you were gambling, you would most likely shoot blind until you run out of amunition.

More on that later.

H. Rearden
  • #115
  • Mar 3, 2009 9:39am Mar 3, 2009 9:39am
Hi H. Rearden,

After reading the thread seems I will be the only one sitting with a 3k$ blown account in sideways reading this thread

Currently taking some vacation off forex and looking for something suitable to my character and skills. Hope to hear some usefull advice from you.
  • #116
  • Mar 3, 2009 10:05am Mar 3, 2009 10:05am
Quoting Ulterior
Hi H. Rearden,

After reading the thread seems I will be the only one sitting with a 3k$ blown account in sideways reading this thread

Currently taking some vacation off forex and looking for something suitable to my character and skills. Hope to hear some usefull advice from you.
Ulterior,

Stay tuned - you never know what you might find out. I have blown far bigger money in trading. Question is whether it kills you mentally as well as economically or whether you simply need to make some adjustments within yourself.

H. Rearden
  • #117
  • Mar 3, 2009 10:35am Mar 3, 2009 10:35am
Ok folks,

Last post for today. It's about control.

When I started out in trading, I bought the latest equipment in computer technology and kept upgarding - it was vastly more expensive than it is today. Four screens plus 2 laptops when broadband costs were still in the £100 per month. Same for real-time data feeds and the latest chart packages.

Did it give me ultimately more control over where the market would move next? No, it did not. Nowadays, I trade from a laptop - thats all I need to see the market doing what it does - and let it. I control my reactions to whatever it might do. I control the exposure, the risk, the individual position size. In fact, that in my opinion is a lot of control in the traders hands.

In the case where the market does what it does and it doesn't align with your trade belief/idea, you are in control to stop it and adjust - why giving your control away to the market by not reacting (and staring at the screen while the account balance keeps shrinking)? You find yourself driving in the wrong direction on the highway, you react by finding the next best exit and turn or stop to check directions - you don't just drive on until you run out of gas - or do you?

Never lose sight of the things you CAN control - ever. Know that you CAN'T control the market price itself - but you can react objectively - do it!

Have a great evening.

H. Rearden
  • #118
  • Mar 3, 2009 10:48am Mar 3, 2009 10:48am
Hi Mr Rearden, I don't really have much in the way of useful contribution to make to the thread, but I will be watching with great interest, I'm really glad that you are taking the time and trouble to start and continue the thread. I'm pretty new to trading, first started last year, lost about £200 re-funded the account, almost blew that, and then when the account was back down to about £50 I changed my approach and grew that to just short of £700 basically trading (spread betting) at 50p per pip for about 3 months. Based on that success the account is now funded with £20,000 which in theory alows me to trade with much higher stakes whilst maintaining a risk of no more than 2% I found that the bigest problem with moving from 50p pp to sometimes £10 per pip was a psycological one, you might call it 'fear of loss' seing the market move against me and watching money disappear quickly. the lowest that the acount has been was about £19200 & highest just over £21000. This weekend I looked what I considered to be the 4 main reasons I (and I would think many others) get into trading, and I came up with Capital Preservation, Capital Growth, Regular Income, & Get Rich. Only then did I come up with a trading plan which suits me personally, and it's amazing the difference that has made to me mentally. Since putting this plan together, I have had two relaxed days of trading, hit my daily targets, and found time to read your thread. So if there is anything at all I could say that might help others, it would be 'Have a clear understanding of what you want from trading, plan realisically how you can achieve it, and stick to that plan' Oh, and if as has been mentioned earlier, you have a dream, Don't let ANYONE steal it. The world was built by dreamers. Sorry for taking up all this space, hope what I have written isn' too much rubbish, and thanks to all the useful contributors on here.
If it is to be - it's up to me
  • #119
  • Mar 3, 2009 11:40am Mar 3, 2009 11:40am
Great post, Pipintime -

A lot of truth in what you touched upon.

Keep'em coming people, I'll be back for more tomorrow.

H. Rearden
  • #120
  • Mar 3, 2009 12:25pm Mar 3, 2009 12:25pm
Rearden ,

I see lot of wisdom in few words from you...

About your living from small account... I guess it comes to your

 

  1. Mindset
  2. Risk taking capability.

Well some one said here... you can make big money even in small volatility... point i guess i am learning is can i even make small money in Big Volatility...

its a Ant job but it still can be done...

V

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