# Day trading dreams



## SamLau (1 August 2009)

Hi again all.

My plan is to quit my cruddy job @ 40 and day trade for a liviing.

I have 8 years to save up enough money to start. In the meantime Im trying to learn as much as possible.  I could possibly save 20K a year.

Are there any experienced day traders out there who could tell me how much capital i will need to become a successful trader.  Im not looking to make big dollars but enough to live confortably

Thanks again


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## MRC & Co (1 August 2009)

Worry first about learning how to take money out of the markets.  

That will probably take all of those 8 years if your doing it while working a full-time job.


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## Sunder (1 August 2009)

The first question to answer is how much you can reliably return from trading. 

If you can't answer that question based at least on disciplined paper trades, preferably real trades... Then I don't think you should quit your day job just yet.


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## tasmanian (1 August 2009)

In 8 years you will obvisouly  learn alot more and your attitude and ideas will change.

Maybe you will just day trade or you can still hold positions for trends etc allowing you to hold stocks for weeks/months and not having to sit in front of a computer all day every day time will tell.

The main question is how much do you need to live on 1st.$1000 a week?$2000?

Alot of people will probaly disagree with this but If your any good and can trade cfds I personally believe you could make $1000+ a week starting with a $10,000 cfd account.Then again you could lose the $10,000 in a week if you dont know what your doing.

Like the last poster said it will peobaly take you those 8yrs to learn how to CONSISTENTLY take money out of the markets.

good luck


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## SamLau (2 August 2009)

tasmanian said:


> In 8 years you will obvisouly  learn alot more and your attitude and ideas will change.
> 
> Maybe you will just day trade or you can still hold positions for trends etc allowing you to hold stocks for weeks/months and not having to sit in front of a computer all day every day time will tell.
> 
> ...




I currently earn $750 a week after taxes.  I would like to earn $1000-$2000 a week doing this.  What do u reckon? $200,000 is enough?


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## tasmanian (2 August 2009)

You would really  have to talk to someone who just lives off their trading income.I still work but not full time.Still for the money but i still like working occasionally.Someitmes 5/6 months or until Im sick of it.

I am activley watching the market all the time and sometimes Im heavily invested and sometimes not.Ive had years when Ive made alot more on the markets than at work and sometimes Ive made more working.Hopefully one day I consistently make more from the markets.

This financial year Ive made more off the markets so far but only early days.Just over $5000 so far trading cfds and we have just completed the 1st month.But this could be still $5000 or less in 6 months but I would be more than happy to keep the $5000 a month ave up.

Like I said I honestly feel it would be possible to start with $10,000 and make $1000+ a week trading cfds but alot easier said than done.It is incredibly hard to be profitable month after month.anyone whos traded for 5yrs+ will tell you about the ups and downs you encounter from the market.It would be one of the most emotional jobs you could have.incredible highs and coming back to earth with a huge thud lows.But theres no way I wouldnt want to be involved in it

If you didnt want to trade cfds you probaly would need $200,000 to make a decent wage.But if you learn to trade properly and understand cfds then thats the way to go in my opinion but you definetely need a couple of years experience before tackling cfds imo.BE WARNED.

theres no reason you cant do it if you put in the time and effort and thats alot of time and effort.either you have the passion for it or you dont imo.

cheers have to run


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## vincent191 (2 August 2009)

Why is the people selling you shares called a broker ??


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## Aussiest (2 August 2009)

SamLau said:


> I currently earn $750 a week after taxes.  I would like to earn $1000-$2000 a week doing this.  What do u reckon? $200,000 is enough?




I don't see why 200k wouldn't be enough to make a modest living, but you may have to reduce your 1-2k expectation. As other posters have suggested, it takes experience (and an X factor?!) to consistently take profits from the market.

Having said that, you have created an 8 year plan, which i think is great. If i were you, i would spend at those 8 years learning the market and trading conservatively if you like..

If you want 1-2k out of the market each week (am assuming pre-tax), that means you'll need a minimum 25-30% return on your capital, each year. You'd probably want to grow your capital by at last 10% per year also, which would bring your desired annual return up by ~10%.

Most important thing is cutting your losses short and letting your winners run.


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## Aussiest (2 August 2009)

vincent191 said:


> Why is the people selling you shares called a broker ??




Because they send you broke.


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## ajjack (2 August 2009)

Asking for 1-2K per week?  Consistently and for a newbie?
Might be asking just a bit too much.

Whatever else, do not give up your day job!


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## SamLau (2 August 2009)

ajjack said:


> Asking for 1-2K per week?  Consistently and for a newbie?
> Might be asking just a bit too much.
> 
> Whatever else, do not give up your day job!




I think i'll stay away from leveraged products like CFDs.    I Currently hold positions over weeks/months because of my job commitments.  I plan to use my 4 weeks annual leave each year to trial run how to intra-day trade fulltime.


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## professor_frink (2 August 2009)

SamLau said:


> I think i'll stay away from leveraged products like CFDs.    I Currently hold positions over weeks/months because of my job commitments.  I plan to use my 4 weeks annual leave each year to trial run how to intra-day trade fulltime.




why don't you set yourself up with a datafeed and some software that will allow you to record the day's action for you to trade on a sim later on?

That way you can learn at your own pace at a time that's convenient to you. No need to waste your holidays to try and get some screen time.


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## Mr J (2 August 2009)

professor_frink said:


> why don't you set yourself up with a datafeed and some software that will allow you to record the day's action for you to trade on a sim later on?




Great suggestion. You can also look at trading FX and Euro markets at night.


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## SamLau (2 August 2009)

professor_frink said:


> why don't you set yourself up with a datafeed and some software that will allow you to record the day's action for you to trade on a sim later on?
> 
> That way you can learn at your own pace at a time that's convenient to you. No need to waste your holidays to try and get some screen time.




Thats a great idea 
Can you recommend my some software which have the feature?

much appreciated.


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## Trembling Hand (2 August 2009)

SamLau said:


> Thats a great idea
> Can you recommend my some software which have the feature?
> 
> much appreciated.




Ninja Trader.

Cannot beat it for intraday realistic sim practise.

Just on the capital thing I reckon you are completely absolutely F'in nuts if you think you can go full time on $10,000 tasmanian. Even if you are very skilled you would be lucky to survive with an added 0 on that sum.


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## Timmy (2 August 2009)

Trembling Hand said:


> if you think you can go full time on $10,000 tasmanian.




What's the AUD equivalent?


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## jono1887 (2 August 2009)

what matters isnt how much you have to start with... its whether or not you can generate a regular income or gains from any capital. Whats the point of starting with 1M if your returns are -5% :


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## Trembling Hand (2 August 2009)

jono1887 said:


> what matters isnt how much you have to start with...



 Thats not ture.



jono1887 said:


> ... its whether or not you can generate a regular income or gains from any capital. Whats the point of starting with 1M if your returns are -5% :




I think what an experienced trader considers "regular income" is a million miles away from what a wage slave considers "regular income". Thus the reason why Nick Radge recommends 3 X wage before giving up the day job.


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## tech/a (2 August 2009)

*TAX*

Never seen this discussed.

*I'm surprised that full time traders *don't talk at length about this scourge!

If they're making as much as some claim (appear) to be they would realise its something that cannot be ignored for any day trader! I don't trade full time but my Tax bill from trading really really "P"s me off!

You want to make $100K then you'll need to make $200K
You'll need to be twice as good as you think you'll need to be.


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## Trembling Hand (2 August 2009)

tech/a said:


> *TAX*
> 
> Never seen this discussed.
> 
> ...




I have many a time tech. its a major drag on performance and position size.

Thats 1 of the two reasons I always recommend trading prop. Where unprofitable traders keep asking but if you are so profitable why would you need to 

See here point 9 as to why,

https://www.aussiestockforums.com/forums/showpost.php?p=401340&postcount=75

EDIT; then you could also see why a profitable daytrader would need to raise OPM to get over this account drag for true wealth


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## wayneL (2 August 2009)

tech/a said:


> *TAX*
> 
> Never seen this discussed.
> 
> ...



Notwithstanding TH's points, any business/profession has to pay tax. What's the difference?

If you want to earn $100k as a plumber or running earthmoving equipment or giving dodgy financial advice, you have to make $200k as well.


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## tech/a (2 August 2009)

I understand your arguement.
But I keep coming back to how many millions do you need/want.
Seriously if you cant privately trade enough size to live like a king and have to seek outside financing???---just dont get it.

Walk into a bank borrow at 7% make 20%/60%--no brainer.
Even the interest is tax deductable.
Indexes and Futs are massively leveraged.

Banks wont give a rats if you drawdown 23% if you keep up your payments but your idea dies at 20% with investors. Plus a heap of agro from the guy who's lost $400k on his $2 mill investment.

But hey everyone has an agenda.


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## Trembling Hand (2 August 2009)

tech/a said:


> just dont get it.
> 
> But hey everyone has an agenda.




Yes they do. You just have to look at the "5 trading rules thread"


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## Aussiest (2 August 2009)

Trembling Hand said:


> I think what an experienced trader considers "regular income" is a million miles away from what a wage slave considers "regular income". Thus the reason why Nick Radge recommends 3 X wage before giving up the day job.




What do you mean here T/H? Do you mean Nick says to be able to earn 3 x your normal wage before giving up job? Eg, if i earned 60k, i would be aiming at 180k per year from trading?

Why wouldn't 2 x wage suffice? I don't see how trading expenses could equate to 1 x wage per year...

Internet connection: $600 p/yr
Computer maintenance, upgrades etc. $1000 p/yr (estimated)
Utilities: $1000 p/yr
Data & Software: $2000 p/yr
Trading fees (okay, here's the killer): $20-25k p/yr
Interest on margin loan: ? (if you use it)

If you stay within the 30-40% tax bracket, you could do it on 2 x wage per year.

Still a BIG ask though..


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## Trembling Hand (2 August 2009)

Aussiest said:


> What do you mean here T/H? Do you mean Nick says to be able to earn 3 x your normal wage before giving up job? Eg, if i earned 60k, i would be aiming at 180k per year from trading?
> 
> Why wouldn't 2 x wage suffice? I don't see how trading expenses could equate to 1 x wage per year...




2 x wage is just not good enough. Earnings are lumby, edges disappear over night. Markets lock up and stop for months at a time. Not uncommon to earn nothing for a month. Add to that the drag on capital and position size each time you do the groceries, pay the rent, pay your tax etc.

Only someone who hasn't been in biz would confuse revenue with profit.


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## Aussiest (2 August 2009)

Trembling Hand said:


> 2 x wage is just not good enough. Earnings are lumby, edges disappear over night. Markets lock up and stop for months at a time. Not uncommon to earn nothing for a month. Add to that the drag on capital and position size each time you do the groceries, pay the rent, pay your tax etc.
> 
> Only someone who hasn't been in biz would confuse revenue with profit.




I sort of see what you are saying, that extra wage for downtimes etc. I'm not confusing revenue with profit, however, i forgot about downtime.


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## nunthewiser (2 August 2009)

Trembling Hand said:


> Yes they do. You just have to look at the "5 trading rules thread"





can you elaborate here ?

is a sincere question as i have my own thoughts on the matter


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## Trembling Hand (2 August 2009)

Aussiest said:


> I sort of see what you are saying, that extra wage for downtimes etc. I'm not confusing revenue with profit, however, i forgot about downtime.




Aussiest here is a perfect example. Last calendar year I had a year that I will never repeat on the SPI. The average points per contract I pulled I will never ever repeat, ever!!

Truly the best of times, Since March this year on the SPI my edge has all but disappeared. Its completely locked up and I'm not alone. I know many of the locals that have been at it for a long time have had to move to other markets. 

You spend 3 months hoping your edge returns then realize that its gone - move to other markets, reduce size, readjust. Build up again. This is a something that stays constant - change.

Fight that on 2 x wage and you are doomed.


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## ajjack (2 August 2009)

Exactly my point TH.

Its the consistancy , of the trading thats the problem

Day trading is not like the salary job.  There is no paid 
holidays and sick leave etc.
To consistently make 2K /wk, year after year is a damn BIG ask!

Meanwhile, the expenses just keep coming.

No guys ... stay in your salary job.


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## Trembling Hand (2 August 2009)

http://traderfeed.blogspot.com/2009/08/challenging-economics-of-trading-for.html

If anyone cares


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## trainspotter (2 August 2009)

wayneL said:


> Notwithstanding TH's points, any business/profession has to pay tax. What's the difference?
> 
> If you want to earn $100k as a plumber or running earthmoving equipment or giving dodgy financial advice, you have to make $200k as well.




Get a better accountant, setup a company behind a unit or family trust (or is it the other way round?) I dunno ... get some serious tax advice from a CPA and be prepared to pay for it. If you are making the money you should be paying tax. Not real keen on giving my hard earned away to the existing Govt at the moment. Like Kerry Packer said "I can tell you you're not spending it that well that we should be donating extra !" to the ATO.


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## Mr J (2 August 2009)

> You want to make $100K then you'll need to make $200K
> You'll need to be twice as good as you think you'll need to be.




We would pocket about $130k, without any deductions, of which there are many for a trader. 



Trembling Hand said:


> Yes they do. You just have to look at the "5 trading rules thread"




What's my agenda in it TH? I'm pretty sure I'm in the discussion for the interest of discussion.


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## airpoe (2 August 2009)

I think most would like to not work & trade for a living.

You should aim to have $300,000 capital & working part-time (20 hrs).

So you would at least get $400 a week for working, that would pay for your daily expenses. The 300k can be used to trade shares but also kept in an online savings accounts that will pay say 5% (now its 4% but last yr was 8%) interest when markets are in freefall & trading is not a option

you don't have to wait 8 years to build up your capital to start to trade. Start buying asx200 companies, use $1000 to $5000 to buy companies you like.

Its better to start small & see how you go, there is not a better way to learn!!

I was a novice when I started trading in Feb 09 & lost 10k in 1 month, but luckily markets have been good since then & I have made back my 10k, then plus over $60k using my base of $165k. I'm hoping this is my one in a life time opportunity to make big bucks which is one in a life time opportunity.

i'm aiming to work part time in 5 years time when i'm 32, saved up $400k; use it to buy an apartment in the Sydney CBD & rent it out & to trade regularly but to have a max of 80k in the market. And enjoy watching the Swans @ the scg


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## Mr J (3 August 2009)

> You should aim to have $300,000 capital & working part-time (20 hrs).




A comfortable figure completely depends on his personal circumstances. What are his expenses? Does he have a family to support? What kind of return can he generate? What kind of fluctuation in capital is he willing to put up with? Can his strategies adapt to different market conditions or different markets? He may only need a fraction of $300k, or he may need many times that. 



> I was a novice when I started trading in Feb 09 & lost 10k in 1 month, but luckily markets have been good since then & I have made back my 10k, then plus over $60k using my base of $165k. I'm hoping this is my one in a life time opportunity to make big bucks which is one in a life time opportunity.




They sound like the results of someone that bought sometime in Feb and has held since. Have you actually been trading, or did you buy and get lucky?



> i'm aiming to work part time in 5 years time when i'm 32, saved up $400k




Does that include what you have now, and will you spend any of your trading profit. I.e. do you plan to do better than 225k->400k in 5 years?



> but to have a max of 80k in the market.




So you make longterm trades?


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## airpoe (3 August 2009)

Mr J said:


> A comfortable figure completely depends on his personal circumstances. What are his expenses? Does he have a family to support? What kind of return can he generate? What kind of fluctuation in capital is he willing to put up with? Can his strategies adapt to different market conditions or different markets? He may only need a fraction of $300k, or he may need many times that.



this is for me



Mr J said:


> They sound like the results of someone that bought sometime in Feb and has held since. Have you actually been trading, or did you buy and get lucky?



I have made over 60 trades since feb, but lately have made minimal trades since the market is surging!! trading is also about luck



Mr J said:


> Does that include what you have now, and will you spend any of your trading profit. I.e. do you plan to do better than 225k->400k in 5 years?



still have 100k savings, would only expect 10% per year profit which includes dividends



Mr J said:


> So you make longterm trades?



both long & short term


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