What is your grubstake?

If you've ever read PitBull, you will notice he often talks about his "grubstake." The grubstake is the amount needed to trade and live, whereas the trading volume is not dependent on actual living. Personally I think it's very difficult for someone to trade full time if there is so much emotion attached to the trading such as living expenses, family obligations and so forth.

Is anyone trading full time and if so, what is your grubstake? What do you feel you need in your bank account/trading account to comfortably make enough money to live, and also go through draw downs without ruining your standard of living?

To kill the emotions you will need about >400K, true story.

Thanks for the input. I believe he needed 100K, and that was "back in the day." Without referencing the book, exact dates and the exact number, after inflation etc. that number would be much higher today.

It's interesting to note that money managers, CTAs etc. make money trading, sure, but they need millions in order to do this. Then there is the transaction fee model versus the performance only fee model, which is another discussion. Just imagine not being able to eat or pay your kids tuition if you had a down month? Total fantasy dream being pumped out there. Think about it this way, there is a reason wall street is high frequency (cough* commissions cough*). I think at the end of the day, the reality is, most people are trying out trading "for fun" rather than as a pure business.

add one to my list of trading with calm emotions:

1. invest more money
2. use smaller lots
3. the more mechanization, the better
4. keep it simple

I don't do any of these, was hoping 'a better edge' made it.

Automated trading is pretty key, or at least an element of it. Since I started testing I am pretty convinced there are very good systems out there, some underground with lack of good marketing, others completely secret (obviously).

I found one of the excerpts from Pitbull. Page 600.

You can work on 5% trading profit per month if doing it stress free... so $100,000 grubstake would earn $5,000 a month, certainly not enough after tax.

So you'd need to up the risk or up the grubstake.

At $200,000 a monthly profit of $10,000 is realistic if trading stress free... withdrawing say $7,000 and leaving $3,000 to compound is fair if this is your only income.

After tax you'd have about $4,000 - $4,500 to live on.

Of course if you are comfortable with more risk, you need less grubstake.

Obviously its different for everyone. For me knowing i have enough cash sitting in a non trading, high interest account to last me atleast 2 years of my current standard of living does the trick. Although when i started out i didnt have this luxury and i found trading much more stressfull. When i started out i was working part time at a normal job for security.