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Full Time Traders - How To Handle a $50K USD Account

  • #1
  • First Post: Nov 16, 2016 11:30pm Nov 16, 2016 11:30pm
Hi All,

Need you advise, if you ant to become full time trader with a capital 50K US$ after you already have a solid trading system what generate around 5% per month. The income will your monthly expenses and the extra income will re-invest your capital. I think trading look like a investment it has risk around there, you can lose all 50K US$ if you lose your discipline, patient, confident and become greed.

My plan: ( my trading system is middle & long term so I have time to place order)

Open 5 account 10K US$ with 5 reputable brokers ( eg: Oanda, FXpro, FXCM ...etc) we want to manage risk management for broker since I am from ASEAN country
To fund via debit/credit card and get back income to pay monthly expenses ( hope income generate as per plan). I do not have much choice to fund our account. Actually need back up 10K US$ for monthly expenses. Normally we lose around 5% (fund and withdrawn) for exchange rate from USD to my country currency. I doesnt know better way to reduce losing of exchange rate.
If I have profit more than 50K US$ , can I continue withdrawal from credit card or I need do bank wire.

I am welcome advise how to manage the fund (50K US$) in term of risk management ( brokers) and how to deposit/ withdrawal sufficient way.

Thanks in advance your advise
  • #2
  • Nov 17, 2016 4:51am Nov 17, 2016 4:51am
Quoting sonata95
Hi All, Need you advise, if you ant to become full time trader with a capital 50K US$ after you already have a solid trading system what generate around 5% per month. The income will your monthly expenses and the extra income will re-invest your capital. I think trading look like a investment it has risk around there, you can lose all 50K US$ if you lose your discipline, patient, confident and become greed. My plan: ( my trading system is middle & long term so I have time to place order) Open 5 account 10K US$ with 5 reputable brokers ( eg: Oanda,...
$50k is quite little to trade full time but it of course depends on your desired lifestyle. It's best to have a solid track record to back your solid trading system. It's not a good idea to trade full time without having some solid track record to back your trading system.

If you've had a solid track record and it shows that it generates 5% per month, slice that half and you got 2.5%, to trade full time, we expect the best to happen but we must also be prepared for the worse. There are too much variables that can impact in our trading. When in profits, withdraw half the profits and let the rest to compound so that your income will increase and not eaten away by inflation.

If you're not into having a nice record, try using leverage to the most efficient way possible. For example, you may have your $25k deposit into your trading account and the other $25k keep in a bank and make some interest out of it. Since with leverage, you'll not going to need a huge account balance to trade and the other $25k is safer to be with your local banks.

Besides, you need an emergency fund saved. One year worth of your expenses should be your minimum and try keeping your monthly expenses stable. We can't control and do not know how much we are going to earn in the coming months and if we do not have a budget, it can be troublesome when bad things happen.

Just my 2cents though. Good trading and all the best!
  • #3
  • Nov 17, 2016 5:50am Nov 17, 2016 5:50am
I'd personally keep a day job, automate the strategy in EA or other code, and trade on the side of the job as an aggressive form of "investment." One plus for this: usually news releases that affect this happen before most work days start.

I'd give it a go with $500 to start - yeah, only 500. Since I know I can build it up from there, there would be no need to use all $50k. The big thing is: Make the system prove itself out to you in this way - that you can start small and just grow it to a large enough account from there. If you have a good system and methods, this should not be an issue and in the future you could then do this full time I suppose. Just add this "check and balance" that ensures that your system actually is good enough for you to be full time into the mix.

Ah also, make sure that you keep the total leverage to 10:1 or less probably.. and try to keep a % of account fund in money market or something dedicated only to backing up your FX account that is 300% the value of your trading account. So you could run the trading account with the limited $500 in it at higher leverage, around 30:1, and still be at an overall low leverage when all is taken into account. Just my quick opinion here though. As my system proves itself out over time, I'd add $200 a month - $50 to the FX trading account and $150 to the side safety account.

I'd bet if you do not do this, you wipe out the account pretty quickly. Hopefully you have how you think/do/react established already and good luck!
  • #4
  • Nov 17, 2016 6:54am Nov 17, 2016 6:54am
Quoting Luther
{quote} You first need to understand what being a full time trader means. You can't employ investment strategies (medium/long term techniques). You need to actively trade. Most professional day traders are working a small area for high gain at peak times. There isn't much point being full time if you push the button once a day. You might as well be working full time at something else and put your trade in before work.
Agreed with this. Not that it matters that much, but the most profitable systems I use have this profile for "Trade direction SHORT/LONG":
Min in trade: 3 days
Average: 10 days
Max: 25 days
*I add to the overall trade as an opportunity presents. Usually about 10 total orders as a good price shows itself.

I'm a professional programmer. I found that the quicker I tried to do everything, and the more by hand with manual overrides I tried to do, the more I lost. I personally don't think there is much of a way to "day trade" that would be more profitable than developing multi-day systems that just ride the overall trend direction. I DO use the 1 minute to scale into trades, while using the DAILY to set direction.

I personally think that most day traders are just burning themselves but to each his own and I suppose and maybe I just don't get how to do it yet myself...
  • #5
  • Nov 17, 2016 7:21am Nov 17, 2016 7:21am
Thanks a lot of your input. I do not want to quit my day job but I have to move another country, so I want to become a full time trader. My system is lowest leverage and with low leverage will help my mental more confident, discipline and patient. I believe my system generate 5% income per month, I know 5% for account 50K US$ is just enough for living in USA, Canada or Australia but I cant fund more this money. I would like to ask in term of mitigate the risk of broker and deposit and withdrawal. I totally agree that trading like a business investment you can lose all like you business does not have customer and your business will be bankruptcy.

I am very welcome the input from full time trader how you manage your broker risk and how you do with your deposit and withdrawal if you dot not living in the country where you can easily transfer the money out of your country.
  • #6
  • Nov 17, 2016 8:14am Nov 17, 2016 8:14am
Quoting sonata95
Thanks a lot of your input. I do not want to quit my day job but I have to move another country, so I want to become a full time trader. My system is lowest leverage and with low leverage will help my mental more confident, discipline and patient. I believe my system generate 5% income per month, I know 5% for account 50K US$ is just enough for living in USA, Canada or Australia but I cant fund more this money. I would like to ask in term of mitigate the risk of broker and deposit and withdrawal. I totally agree that trading like a business investment...
If you were to make 5% return per mth from 50k,
you won't be able to live in Australia as it is so expensive to live here in Australia,
it used to be very cheap about 30 years ago but not now.
USA & Canada is about on the same boat but just a bit cheaper than Australia.

Plus all your trading will be tax very high in a foreign country.
I'm paying 28.5% on all my trading income under a company name which i setup for trading only
cos i used to pay 37% tax for all my trading income under my own name.

Hopefully sometime next year i will be moving to either Thailand or Malaysia
and will be paying very little tax which is about 15% or less which is much much better than what i'm paying now.

As you said that you are from an Asian country, why the hell do you even want to move to a foreign country
when everyone from a foreign country is trying to move to Asian like Thailand, Malaysia or Vietnam.
  • #7
  • Nov 17, 2016 6:15pm Nov 17, 2016 6:15pm
Quoting online12793
{quote} If you were to make 5% return per mth from 50k, you won't be able to live in Australia as it is so expensive to live here in Australia, it used to be very cheap about 30 years ago but not now. USA & Canada is about on the same boat but just a bit cheaper than Australia. Plus all your trading will be tax very high in a foreign country. I'm paying 28.5% on all my trading income under a company name which i setup for trading only cos i used to pay 37% tax for all my trading income under my own name. Hopefully sometime next year i will be moving...
Australia pay a lot of tax for trading.
Better we move to UK where tax free for spread betting. My country is not officially allow to do trading forex but we can open offshore account and fund via credit card or paypal and trading there. The country control money transfer out to oversea but not control money transfer in to the country. There if we receive money from oversea almost tax free. Therefore, if I move to oversea but I still keep my account with my current country and to be pay less tax and will be fund and withdraw from credit card.
  • #8
  • Nov 17, 2016 6:56pm Nov 17, 2016 6:56pm
This is very simple don't trade forex take your money and trade the futures market its a level playing field the brokers only involvement is the access into the market and that's it. the cost is 4 to 5 dollars per contract and money is truly segregated
  • #9
  • Last Post: Nov 17, 2016 10:16pm Nov 17, 2016 10:16pm
Quoting Divergence
This is very simple don't trade forex take your money and trade the futures market its a level playing field the brokers only involvement is the access into the market and that's it. the cost is 4 to 5 dollars per contract and money is truly segregated
Which broker do you recommend? I think trading future market do not allow funding via credit/ debit card.
My question if you want to invest 50K US$ you will open one account with a broker or you will mitigate the risk to open several accounts with a few brokers
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