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(can) small accounts make a living ?!

  • #481
  • Aug 28, 2009 8:07pm Aug 28, 2009 8:07pm
There are places in the world where you can sort of live like kings for $100 per month, not that you'd likely want to live there, quality of life would likely suck.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #482
  • Aug 28, 2009 8:10pm Aug 28, 2009 8:10pm
Quoting Turveyd
Mate still a newbie had her first really profitable week this week, +135% seriously ( high risk so expect losses or 135% isn't long term repeatable doesn't need to be, still a newbie ) but it's enough to cover her weeks wages especially as it's tax free in the UK with a spread betting account.

I pick up average $1300 per month which I just about get by on so call it 16K.

Okay I plan to increase my life style and would like 3x's that but it'll get there.
I am going to have to look into a UK account, if only for having the ability to hedge. Spread-betting - no taxes. That's awesome. The taxes that daytraders have to pay in the USA must not be ignored by anyone who is thinking of doing it for a living. The IRS will catch you, sooner or later, if you cheat - I know this from very painful experience.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #483
  • Aug 28, 2009 8:18pm Aug 28, 2009 8:18pm
Quoting Turveyd
There are places in the world where you can sort of live like kings for $100 per month, not that you'd likely want to live there, quality of life would likely suck.
Sure, there's a thread on FF - "Best Place in the World to Trade From" - read all about it. Pretty tempting, no? - move to some warm sunny land where the money you get pipping is a princely sum, rather than just something to get by on...

Well, that might be fine for young dudes. But I'm old. I have family & I'm dug in pretty much where I'm at. I could see maybe having a winter place in Costa Rica, though.....hmmm
"If The Fool persists in his Folly he will become wise." - William Blake
  • #484
  • Edited 8:57pm Aug 28, 2009 8:32pm | Edited 8:57pm
Quoting The Fool
I am going to have to look into a UK account, if only for having the ability to hedge. Spread-betting - no taxes. That's awesome. The taxes that daytraders have to pay in the USA must not be ignored by anyone who is thinking of doing it for a living. The IRS will catch you, sooner or later, if you cheat - I know this from very painful experience.
I am pretty sure you have to be a UK citizen /resident for tax purposes to be eligible for that.
  • #485
  • Aug 28, 2009 8:32pm Aug 28, 2009 8:32pm
Quoting The Fool
I am going to have to look into a UK account, if only for having the ability to hedge. Spread-betting - no taxes. That's awesome. The taxes that daytraders have to pay in the USA must not be ignored by anyone who is thinking of doing it for a living. The IRS will catch you, sooner or later, if you cheat - I know this from very painful experience.

Money laundering rules mean the brokers will be talking to the tax people to unsure it's all above board, sadly it's only a UK thing for UK traders Spread Betting is classed as a gambling site and therefore tax free.

I haven't got a spread betting account yet, but I'm okay till I make £8000 GBP area anyway.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #486
  • Aug 28, 2009 8:37pm Aug 28, 2009 8:37pm
Quoting The Fool
Sure, there's a thread on FF - "Best Place in the World to Trade From" - read all about it. Pretty tempting, no? - move to some warm sunny land where the money you get pipping is a princely sum, rather than just something to get by on...

Well, that might be fine for young dudes. But I'm old. I have family & I'm dug in pretty much where I'm at. I could see maybe having a winter place in Costa Rica, though.....hmmm

I always wanted to move to newzeland, 7years ago I would of without hesitation but mates have kids and wouldn't want to be that far away these days, life hey so pretty trapped to.

Been scouting out Spain, not that cheap but nice weather, skiing 3hour cheap flight to get home renting somewhere cheap there and flipping between the 2 is likely what I'd do.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #487
  • Aug 29, 2009 6:40pm Aug 29, 2009 6:40pm
Quoting The Fool

Rambling post, quick answer at the bottom:

If you can trade, you can make a living, sure. Account size is relative to who/where you are. I only know about the USA. I would say minimum starting account sizes for the following:

- Single frugal guy/girl, no kids: $25k
- Older single guy/girl, maybe a kid & a mortgage in tow: $50k
- Family Man/Woman, multiple kids, comfy lifestyle: $100k

Just mho, fwiw. Good Luck All.
After sleeping on the above, and considering that these numbers might be taken to heart by an "average" trader (whatever that is) who is contemplating trading spot forex as their only source of income, I would double all starting account $ amounts shown above.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #488
  • Aug 29, 2009 8:04pm Aug 29, 2009 8:04pm
Quoting The Fool
After sleeping on the above, and considering that these numbers might be taken to heart by an "average" trader (whatever that is) who is contemplating trading spot forex as their only source of income, I would double all starting account $ amounts shown above.

And yet I'm trying to make enough to live off with $500 area
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #489
  • Aug 29, 2009 8:11pm Aug 29, 2009 8:11pm
Quoting Turveyd
And yet I'm trying to make enough to live off with $500 area
Well I hope you can grow that T. Everybody is different. I have been homeless, living out of a VW Transporter for months at a time, and I paid college tuition and ate on about $500/month. That was before retail spot forex even existed. Now, I have about a $5k/month rock bottom break even target, on average. If things don't start picking up in the A&E market here soon, I will probably have to start living (in part) off forex earnings. And that is not a cheery thought.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #490
  • Edited Dec 14, 2009 4:58pm Dec 13, 2009 6:17pm | Edited Dec 14, 2009 4:58pm
H Rearden,
I've spent quite a bit of time in the last month or two going over your post history. I truly appreciate your thread here. I am in the process of developing a strategy based on your bottom up trading with the stochastic indicator over multiple tf.

Your statement (3/2009) seems to show a few cases where you went over your 4% risk/day rule (as well as your 2%/trade). But I understand that after years of experience with the strategy, you can have confidence in certain setups (based on s/r, round numbers, fibs?, etc) and allow yourself some leniency (especially if you have exceeded your monthly or maybe even daily goal).

I will try to develop a strategy for myself, where I can keep very tight money management controls. Stops will be placed at time of entry to avoid the emotions that come with a trade in drawdown. Only after years of trading the strategy will I feel comfortable being more discretionary.

Just wanted to express my thoughts. Hope you continue to check in once in a while, as your wisdom is highly valued. Looking forward to reading Atlas Shrugged in 2010 too!

Josh
  • #491
  • Edited 6:58am Mar 29, 2010 6:39am | Edited 6:58am
Quoting H. Rearden
...indiv. position size (per pip value): 0.05% of constant acc. base capital (one unit per trade)...
can anybody please help me, i cant sort it out.
i dont understand what this means?

for example the account size is $10.000:
what is a unit per trade?
what is 0.05% of constant acc. base capital?

regards
RT
  • #492
  • Mar 29, 2010 7:07am Mar 29, 2010 7:07am
Quoting RussiaTrader
can anybody please help me, i cant sort it out.
i dont understand what this means?

for example the account size is $10.000:
what is a unit per trade?
what is 0.05% of constant acc. base capital?

regards
account base capital = your starting capital (e.g. $10000)

unit per trade = if scaling into a position is chosen, one (whole) trade can be split into several units

pip value = the amount of money won or lost per 1 pip price movement

constant = non-compounded position sizing, i.e. your position size is determined by your pip value (depending on broker leverage) of:

base capital X 0.05 divided by 100 [or 5 units with a pip value of 0.01% for example]

Important note: 0.05% pip value is aggressive and stops should be used in accordance with overall daily/weekly/monthly risk parameters !
  • #493
  • Mar 29, 2010 8:16am Mar 29, 2010 8:16am
Quoting H. Rearden
account base capital = your starting capital (e.g. $10000)

unit per trade = if scaling into a position is chosen, one (whole) trade can be split into several units

pip value = the amount of money won or lost per 1 pip price movement

constant = non-compounded position sizing, i.e. your position size is determined by your pip value (depending on broker leverage) of:

base capital X 0.05 divided by 100 [or 5 units with a pip value of 0.01% for example]

Important note:...
wow, i thought u dont reply anymore! thx for the fast explanation, now this point is clear to me, thx!
  • #494
  • Mar 31, 2010 11:55pm Mar 31, 2010 11:55pm
Quoting H. Rearden
account base capital = your starting capital (e.g. $10000)

unit per trade = if scaling into a position is chosen, one (whole) trade can be split into several units

pip value = the amount of money won or lost per 1 pip price movement

constant = non-compounded position sizing, i.e. your position size is determined by your pip value (depending on broker leverage) of:

base capital X 0.05 divided by 100 [or 5 units with a pip value of 0.01% for example]

Important note:...
i would suggest to make it more easy to understand to say the leverage is 5 instead of pip value 0.05%

for example if you got usd 10.000 on your account, the max. single position is usd 50.000 you can buy.

regards
  • #495
  • Apr 12, 2010 9:48am Apr 12, 2010 9:48am
i like the approach and sometimes during the day i use and combine it already with my style.


another question comes up, which i didnt find in the older posts:

have you thought about a time stop?

for example: after 1 hour the trade is not positiv -> sell
  • #496
  • Apr 12, 2010 10:37pm Apr 12, 2010 10:37pm
NO
Minimum account size to make a humble living would be around 50K i would estimate.

smaller than that you could make a living for a while....but during the drawdown phase of your strats you will either starve or blow up your account !
  • #497
  • Apr 13, 2010 2:45am Apr 13, 2010 2:45am
Quoting Rise
NO
Minimum account size to make a humble living would be around 50K i would estimate.

smaller than that you could make a living for a while....but during the drawdown phase of your strats you will either starve or blow up your account !
read the thread, then you need not to estimate.
  • #498
  • Apr 13, 2010 2:54am Apr 13, 2010 2:54am
Quoting FrankenPip

It takes time to build up your account just like your muscles.
A small account will make a small living. Better to start by not having to draw from the account to live.
  • #499
  • Apr 13, 2010 3:22am Apr 13, 2010 3:22am
Quoting RussiaTrader
i like the approach and sometimes during the day i use and combine it already with my style.


another question comes up, which i didnt find in the older posts:

have you thought about a time stop?

for example: after 1 hour the trade is not positiv -> sell
No -

Too restrictive. That does not mean that on occasions I might close the position if it has not gone anywhere.

H. Rearden
  • #500
  • Apr 13, 2010 4:37am Apr 13, 2010 4:37am
Quoting Rise
NO
Minimum account size to make a humble living would be around 50K i would estimate.

smaller than that you could make a living for a while....but during the drawdown phase of your strats you will either starve or blow up your account !
I agree if you earn 5% profit monthly of $50,000 you will earn $2500 monthly. Plus there will be months when the trading results are negative. So a $50,000 account will earn average $1500 or $2000 per month. So you will need a substantial account size to make a living of forex.
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