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How to make a living with trading?

Quoting PiranoTrader
Hi, I've been trading for few years now and being "consistantly profitable" is not the biggest problem I have. The problem I have is with low trading capital. Some friends advised me to open a small live pamm account and connect it with trade explorer, myfxbook, fxstat, ... to prove that I can trade. So I did that a few months ago. As I was told getting the funds for consistant traders shouldn't be a problem ("the money will find you if you are good" I was told, hehe). But apparently it is a problem (at least for me) because...
I've invested in several CTAs over the past 10 years & did pretty well picking decent traders. Crappy luck with brokers :-(
Briefly looking @ the 2 TEs is seems "most" of the time the trading is pretty decent but then there's a period(Nov. to Feb.) in the one TE where you held a trade for 12 weeks & lost $6,000. That trade started with a simple .06 entry & ended with 1 full lot trades with you being long & short @ the same time. I don't even want to know the full story or what you were trying to do. As an investor, those short periods of "lack of discipline" is all it takes for me to have no more interest in further review. I'm onto looking elsewhere. You might get small investors to look past those spots but anyone with a larger investment won't be interested. That's why a long-term track record is important. Anyone can have a short period of "good luck" to create a good TE. That one large loss is the reason your % return in the 1st TE isn't near as good as the 2nd TE even though the 1st TE has more trades over a longer period of time.

If you're truly confident that you can be "consistently profitable" as you say, then you should slowly increase your position size because with your account sizes you're not using any size close to getting in trouble, IF you use discipline. Yes, you will also have larger drawdowns but that shouldn't matter if you're profitable in the long-run.

Not trying to sound harsh. Just keep up the good trading but remove the "lack of discipline" moments.
To somewhat clarify, I personally think what CrucialPoint meant is this:

If you look at a bank, they have a trading department. The amount of profit coming from the trading "profit center" is not all that drives the bank or all assets that compose the bank's balance sheet/P&L. In fact, it is often a much smaller percentage of the total bank's revenue - say 10%. So basically: there ARE times where the bank traders will make much higher percentages than the amount that they will then hand to investors. So a particular unit in "trading division" could make say 100% and still the investors would only see some 12% advertised annually externally or something...

It is basically like if you are worth $1,000,000 and say you are trading 10% or 100,000. So if you make 100% (100,000) on your trading account, you really only made 10% or 100,000/1,000,000. So yeah, if you are setting your expectations to 10% annually or something, you might honestly be setting them too low if your trading account is a large percentage of your net worth - it might be the case if you are young and just starting out.

I think THIS is what he meant. And I fully agree. But I also believe that not many people have the tools/temperament to do this professionally. To succeed, it needs to be run like a business and I think maybe 1% of people looking at FX even treat it as such. The key seems to be to know your system REALLY well and be possibly willing to add capital during drawdowns. And also need to have a VERY good idea of the leverage you have and how leverage works and what it does with drawdowns, etc.

I ALSO agree with the people who say that if you want to be a boss, then just do it and grow into it organically over time. But yeah, I DO believe it is possible for those that know what they want and make it a business.
  • Post #103
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  • Edited Mar 19, 2017 4:15am Mar 18, 2017 2:56pm | Edited Mar 19, 2017 4:15am
Quoting CrucialPoint
. And Finally the magical +100% consistent yearly. For some reason you guys think of compounding 100% consecutively for so many years. That's why when you guys do the Math in your head results into billions and trillions which is not possible. Well, real life traders don't compound it because they simply can't. What happens is that$10M this year, next year $10M, the following year $10M, etc... Thus, 100% consistent yearly for the past so many years. And every trader who trade really big accounts knows it... It's only the traders who never traded...
Well he did address this to the people that compound a trillion dollars in their heads.
Dragon Rider
Quoting barloc
{quote} Well he did address this to the people that compound a trillion dollars in the heads.
I've heard that once you get over 20 lot, you will have issues with most of these FX brokers. They will be worried that you have too much risk. But depends on equity and stuff also. I've heard that even if well funded, you will get the broker telling you to reduce size. But yeah, it is really difficult to tell this with all the hearsay around here and not as many people actually at that stage of the game here.

I've also heard the barrier can be 100 lot... But not fully sure. I think this is a large reason why compounding your way to infinity like most people state/dream about is impossible. But it would seem that you would run into this problem with about $300,000 down so that would be a nice "problem" to have.

EDIT: well, with my simulations, I think the 100 lot on a 50:1 broker is at about 1,000,000 equity if you are using around 15:1 leverage but not 100% sure...
My personal account equity number to not have a full time or side job would be probably $100,000 minimum... and I'd also probably not recommend that most others try something like this with less than 150,000 to devote - 50k for two years of expenses (25k each year) and 100k for trading account. If you do not have that, I'd recommend finding a way to work and work on your system at the same time somehow or find a job or hours that allow for that.

But yeah, I might even push this higher personally because I really like my job and work with code/computing in a complimentary area in Finance in Chicago and I've been able to do both at once so far. =D

I think it helps you do this better and reduces your risk a lot if you can use cash from your job each week into your account to reduce drawdowns and leverage and stuff as trades progress... Like therapy. But that could be just me.
money management is the key to success if you have a good strategy try to make 3-5 trades per day with 2% risk, R:R = 1:2 and of course use compounding you can easily turn even small amount of money into a fortune if you know what to do


good luck
Trade or not to trade - that is the question...
Quoting srt
{quote} I've invested in several CTAs over the past 10 years & did pretty well picking decent traders. Crappy luck with brokers :-( Briefly looking @ the 2 TEs is seems "most" of the time the trading is pretty decent but then there's a period(Nov. to Feb.) in the one TE where you held a trade for 12 weeks & lost $6,000. That trade started with a simple .06 entry & ended with 1 full lot trades with you being long & short @ the same time. I don't even want to know the full story or what you were trying to do. As an investor, those short periods of...

You don't sound harsh at all. I totally understand your POV, and 100% agree with what you said.
I see a lot of members have been commenting on my trade explorer. That is not exactly the issue of this thread but let me explain both TEs just to clarify to the ones who are interested:

First TE I opened was PiranoTrader (29 weeks old). The strategy used is fully automated, because me and my friend (who is an expert in programming) made an EA out of my own strategy I used several years succesfully manual trading. All the parameters are well defined (they must be if you want to write a code) so it contains entry point, sl, tp, (hidden from broker) .... and also it contains a wery carefully calculated risk/money management depending on available equity. We put a lot of work in backtesting the strategy. We imported custom high quality history data (tick by tick - we bought it from a broker) into MT4 and backtested the strategy for 10yrs back (since 1.1.2007). So the strategy is designed to "survive" all the events that happened on the market in the last 10 years and make a nice profit along the way.
At this point let me answer to all the comments that will say: "Backtesting is not relevant because you cant predict the future based on the history... blah blah blah" - you know, the usual arguments. About that let me say that I am aware that you can't do that, but history is the only data you have about the market, so analyzing it is not useless work! But let's leave all the manual vs. automated, backtest or no backtest, leverage or no leverage, ... talk for later.
My point is, that by backtesting 10 years history helped us to create quite a robust EA. Money management is also adjusted to that period of backtesting.
The good thing is, that this live account used in PiranoTrader TE is behaving a lot like we expected from backtesting. It is designed to perform especially well when spikes occur. The bigger the better. For example: some called it "black swan" and went bancrupt but GBP "flash crash" in october was wery profitable with our strategy. And when more and more trading is done by automated systems I think a lot of flash crashes is the future of trading. When the markets are relatively calm it makes small but steady profits as you can see.
But at the beggining, when we connected our EA to live account (sept.16) we understandably encountered some begginers problems. And that occured with USD/JPY in november when because of purely technical problem (our server went down over night) we missed the exit point and in stead of nice profit we found our selves in trouble with few larger positions on that pair. We took quite a while to get out of the worst trouble and closing a substantial loss (like around 9k). We had to manually intervene. But because of great trading results before that event we still have app. 9% profit. So if you examine closely that TE you will see that all the other trades (except USD/JPY) were very succesful. But that is why some of you commented about a large draw down. It was only because of that trade. Otherwise the drawdown levels are OK.

But that kind of trouble is also the best opportunity to learn form your mistakes. So we first made sure that server trouble will not occur again. And also we made some additional improvements of our EA and we made it safer and better.
And with this new and improved EA we opened another TE: PiranoTraderPAMM (18 weeks ago). And as you can see the results are quite OK. We're 54% in profit (that averages app. 11% /month) after 368 trades, 1800+ pips gained, 67% winning rate, ... So at least for now we can say that strategy is behaving pretty much as we expected. Also you can notice the bigger jumps in balance occur when market makes some bigger spikes (like 30. dec. 2016).

I know a lot of you have different strategies and different views about trading. So probably there will be a lot of critics to that approach, but I'm always prepared to listen a constructive argument or advice.
So much for now. If you need some further explanations you're welcome to ask.
good thread.. having traded for a living for short spouts, hard topic.. now have a casual job to ease pressure, trading style has changed from day to primarily swing/ position trader.. aim is just to "stay" consistent and keep building, hopefully the rest will follow
Quoting PiranoTrader
.....But building a budget and paying the bills at the same time with low capital is hard. Any advice is very appreciated. Happy trading guys.
You have commit yourself to cover your personal expenses by trading forex....this is not right and will make you desperate all the way long.
Anyway this is also my same issue when I started trading forex years ago. After one year trade then I realised I have make a big mistake and the consequence is my trading account never grow and sometime I have to withdraw my principle to cover expenses. I feel stupid and mentally down.

How did I overcome this problem? I make few points as below:
1. I change my trading approach from intraday to scalping. This way I can make a quick profits with less DD. Scalping also give me a lot of trading opportunities every single day. This trading account I never withdraw and will compound my profits.
2. Invest some money for quick daily cash. This is my second business to cover all my daily and monthly expenses. I only need $2000 to cover my bills, groceries, car installment and children schooling expenses. This small retail business I hand over to my wife and she enjoy doing this without much effort. The good news is my car installment I can pay for full settlement in one year with this retail business.

After two years, my trading account grow up to the moon (compounding profits) and its time for me to relax and start a long term trade which more than enough to cover all expenses and make some saving. I also can afford to take few workers to help my wife to run retail business everyday....and now I already have two stable business (retail forex trading + retail product sales) which I think it is a symbol of wealth for me and my family....even far from being a millionaire.

The most important thing is I will never work for anybody being a slave to seek uncertain income and risk when committing other people.

I share my experience to ponder if it really can help you. Be practical and never hope for other people's money to make you rich....unless you have 'power' to make your investors massively rich.....

Peace of mind.
Game of Probabilities.
Quoting hak444
@CrucialPoint.... Ok, your 2nd post has some valid points. Your 1st one was all over the place that's why i didn't read it first. But now after looking into the details i agree to certain points you made. I don't know where this 10% per year is coming from but if that's some one's goal is to just achieve 10% per year then i agree its nothing . What i don't understand is why you have to be a part of some financial institution to make big money? (plz elaborate this) On the other hand i have seen people who have been part of these firms but now trade...
I'm thinking the 10% idea came from the top firms like JP Morgan and such. They have billions, and so they have the large numbers rule adding up. Once you have that much money, to make more than 10% would be impossible because you have the majority of the market share, your just taking money from poor saps who have a dream, like the current bull run happening in the US. But if you have less than 100k and your aiming for 10% that is waaay too low, I may not be a follow by example lol, but I feel like when you have a smaller account, you're more liquid, and able to pull off more than 10%. Thats my 2 cents, hopefully it will be a reality by my year's end.. happy pipping guys!
Quoting skillz16
My personal account equity number to not have a full time or side job would be probably $100,000 minimum... and I'd also probably not recommend that most others try something like this with less than 150,000 to devote - 50k for two years of expenses (25k each year) and 100k for trading account. If you do not have that, I'd recommend finding a way to work and work on your system at the same time somehow or find a job or hours that allow for that. But yeah, I might even push this higher personally because I really like my job and work with code/computing...
If you're truly confident that you can be "consistently profitable" as you say, then you should slowly increase your position size because with your account sizes you're not using any size close to getting in trouble, IF you use discipline.
Quoting PiranoTrader
Hi, I've been trading for few years now and being "consistantly profitable" is not the biggest problem I have. The problem I have is with low trading capital. Some friends advised me to open a small live pamm account and connect it with trade explorer, myfxbook, fxstat, ... to prove that I can trade. So I did that a few months ago. As I was told getting the funds for consistant traders shouldn't be a problem ("the money will find you if you are good" I was told, hehe). But apparently it is a problem (at least for me) because I don't even know what...
You are not consistently profitable.
The problem is not your low capital.
You have not proven anything.
I have heard it over and over again "my goal is not to be a millionaire overnight but to make a living"....how humble of you.
Your TE performance is nothing special. I have seen better.

Anything else I am missing?
You came here for the truth and let me unveil it for you
How to make a living with trading?

According to statistics you cannot make a living from trading. The failure rate in this industry is way too high.
Making a living from trading as individual trader by trading your own capital (consistently, year after year) automatically puts you in the top 0.1%.
So practically speaking, trading for a living is pretty much a pipe dream. Unless........

Look,
The main problem is not the lack or opportunity, but the lack consistency in this business. Too much uncertainty.
Unlike most other businesses, with fx trading you don't have access to reliable cash flow.
In trading the profits come in waves, and usually you have losing periods in between.

If your business cannot provide you almost guaranteed weekly or at least monthly paycheck sufficient to maintain at least average living standard, this means that your business is unsustainable in the long run.

All successful businesses generate monthly income for their owners, investors and employees.
With trading you are more likely to generate almost nothing (or loss) during most periods. (Based on statistics)

This means that in order for the whole "trading for a living" plan to work, your capital must be large enough, so even one profitable month can cover your living expenses for one year. (I think you can do the math here).

Of course there are other solutions, but not many people can afford them.
The ideal scenario is to have stable passive income from another source. (like property rent, or stock/business dividends) and to use trading for wealth generation. Meaning, trading with low risk, slow and steady growth. (a few percent per month).

Another (good) solution it to create monthly subscription service. For example investors can copy your trades and pay you flat fee ( $50 - 100 per month). Some people may say it's a bad deal compared to the institutional standard performance of 20% from the profits. But I disagree! The small flat monthly fee is much better deal for small traders(managers). Because for small traders it's very unlikely to attract large investor capital and in case you don't know, performance fees are effective only if you manage many millions. (Again based on statistics).

Also legally speaking, to manage OPM you have to be licensed as financial advisor. In some countries there is also minimum capital requirements.... Basically you have to start investment/hedge fund.
While with subscription business model you can advertise your services as "educational material" or even as entertainment/hobby, so the regulation do not concern you.
Technically this way you do not manage money for others. Other traders just come to you and copy your trades with their personal trading accounts......for learning purposes.....
Quoting albypaul
Hello All My Name Is Albert Poulis and i just wanted to say hi. To be HONEST i mean that with respect to all .You can make a great living with Forex and if you make your own Indicators and EA's even better i tend to stay a way from the EA's for my own reasons.Here is my trading strategy that i have been using for a while now and i have been told that i am an idiot and all the cherry toppings on top but you know what i have made money from this and i call it 5 line RSI. 6 RSI LimeGreen. 8 RSI Lime. 10 RSI DodgerBlue also Flat line(trend). 12 RSI...
The actual account is a 1000:1 leverage ENC Demo account of $200 to show you that yes you can make money even from a small deposit of $200. You just have to be patient.
To all that wish to use this indicator here is a video on how to use it
Inserted Video
Quoting alphaomega
Another (good) solution it to create monthly subscription service. For example investors can copy your trades and pay you flat fee ( $50 - 100 per month). Some people may say it's a bad deal compared to the institutional standard performance of 20% from the profits. But I disagree! The small flat monthly fee is much better deal for small traders(managers). Because for small traders it's very unlikely to attract large investor capital and in case you don't know, performance fees are effective only if you manage many millions. (Again based on statistics)....
Yes, that's another popular business. See how a small trader selling his service to small retails can make decent living.
Inserted Video

By the way, he quit his service for retails now. He had a deep DD lasted for about a year in EU, and he was critized a lot.

How much can they make monthly? There is a clue. In MQL market (Metatrader service from Metatquotes), the top player has 1000 follwers. As montly subscription fee is $30, he makes 30K before 20% broker charge (yes, nearly a ripoff). Myfxbook or Zulutrade could be similar.
Simplicity is the ultimate sophistication - Leonardo da Vinci
Quoting alphaomega
How to make a living with trading? According to statistics you cannot make a living from trading. The failure rate in this industry is way too high. Making a living from trading as individual trader by trading your own capital (consistently, year after year) automatically puts you in the top 0.1%. So practically speaking, trading for a living is pretty much a pipe dream. Unless........ Look, The main problem is not the lack or opportunity, but the lack consistency in this business. Too much uncertainty. Unlike most other...

The "Statistics" your refer to I assume are the number of successful traders there are as compared to successful ones ? IE the vast majority of retail traders loose.

With respect your "statistics" are meaningless in the assessment of an individuals potential to become a consistently profitable trader.

99% of traders lose! So what? 99% of new businesses fail, does that mean that there are no successful new business? Look at all the failed Dot Com businesses, a handful made it, and the fact the rest failed had no affect whatsoever on their success.

Most traders lose money, what affect does that have on my individual set of skills? You see my point?
I live entirely from the growth of my personal trading account
Quoting piple
{quote} There are way too many negative reviews about your suggested site. It is reputed to be a sort of scam. I wouldn't go near it.
n/m
Learn, a forex trader must, unlearn and relearn he will.
Quoting heispark
{quote} Yes, that's another popular business. See how a small trader selling his service to small retails can make decent living. https://youtu.be/lSKT6o3gpo0 By the way, he quit his service for retails now. He had a deep DD lasted for about a year in EU, and he was critized a lot. How much can they make monthly? There is a clue. In MQL market (Metatrader service from Metatquotes), the top player has 1000 follwers. As montly subscription fee is $30, he makes 30K before 20% broker charge (yes, nearly a ripoff). Myfxbook or Zulutrade could...
The TOp GUY on MQL has 2873 followers. His signals suck. Your right, huge drawdowns. 30 bucks a month though............lmao

In the past month, his subscribers have gone up 2.5 times from 1100 to the current 2873 . I have never subscribed to him, but I follow that market on mql. I do follow New York City Capital. Cant complain about him.

Here "Calms" link:


https://www.mql5.com/en/signals/129797
Learn, a forex trader must, unlearn and relearn he will.
Quoting COGSx86
{quote} TopStep is not a scam. They are a group of traders. Danny Riley has a youtube channel and I have him on facebook. Great guy, likes to help other traders. I have never used their service, but they arent a scam.
One must pay to be assessed... Seems a little fishy to me
I live entirely from the growth of my personal trading account
To make a decent living from trading you decent capital, but then if you had such huge capital there are soooo many better options to invest in, why would you invest in forex? Ok for making some extra income or pocket money but a living? Only a bad investor would try and make a living just from forex.
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