If you're just starting out: reiterating a point

[boofis]

underfunded is one of the leading reasons traders get beaten up then beat themselves up......

*Note: this is not a system I trade, have traded or plan to trade. This is purely hypothetical to demonstrate the impact commissions have.

Period: start of 2010 - end of 2011
Profitable system
Initial capital: $5,000
Commission: Commsec rates
152 trades taken. 16 winners, 136 losers. (account ran out of money so no more trades could be taken)
Ending capital: -7.70

Same system but with $0 paid in commission.
Initial capital: $5,000
261 trades taken. 118 winners, 143 losers.
Ending capital: $9564.57

Same system again, but with an account size of 100k
Initial capital: $100,000
Commission: Arbitrary $50
272 trades taken. 102 winners, 170 losers.
Ending capital: $109226.49

 

[TMC93]

So you don't have to aim for stupid % returns just to cover cost and survive.

Because $1000 will be incurring huge amounts of costs.

Yes there is. Knowing before you do that you will be profitable and under what situations you will not be.

Let me start again as you obviously didn't understand the meaning of the sentence. As a beginner, there is no substitute (that i'm aware of) that replicates the same emotion as putting your own, real, hard earned money on the stock market. It may be different if you think you can foresee every situation that you will be profitable and vice versa but honestly i doubt a beginner could even start to comprehend that.

How has that worked out for you?

Great, thanks for asking.

 

[TMC93]

again, add in costs and this is not true

Again, If you read the post, no sum of money is too small to invest as long as you meet the broker minimum requirements. Last time i checked i could put $500 on shares as long as i had enough to cover the brokerage.

 

[tech/a]

Agree with T/H and Joules

Larger capital base easier to trade.
Mind you very large capital bases in my view become harder to trade.
Eg Managed Funds.

But also agree with TMC
There is nothing like the learning curve of using your own funds.

If $1000 is all you have on this planet then you'll learn more than if $1000 is .01% of your net worth.

But finally if you have no idea of your expectancy then your very likely gambling.
Oh and expectancy isn't predicting a 10% rise in an instrument.

 

[Trembling Hand]

Let me start again as you obviously didn't understand the meaning of the sentence. As a beginner, there is no substitute (that i'm aware of) that replicates the same emotion as putting your own, real, hard earned money on the stock market. It may be different if you think you can foresee every situation that you will be profitable and vice versa but honestly i doubt a beginner could even start to comprehend that.

Well on that one will have to disagree. I've seen here time and time again how retailers train in hope and collect "experiences" as they go. It doesn't have to be that way.

From your comment about "foresee every situation" it would seem you don't understand expectancy?

 

[TMC93]

From your comment about "foresee every situation" it would seem you don't understand expectancy?

Actually i found that expectancy is rather important when it comes to developing a system so that you can compare risk multiples generated by profits and losses as a ratio to the price paid.

 

[Trembling Hand]

Actually i found that expectancy is rather important when it comes to developing a system

Soooo.... starting blind with $1000 fits into that how?

 

[TMC93]

Soooo.... starting blind with $1000 fits into that how?

A) I never said anything about starting blind, would rather put all my money on black at the casino. B) This thread was started for people "starting out".

 

[Garpal Gumnut]

Agree with T/H and Joules

Larger capital base easier to trade.
Mind you very large capital bases in my view become harder to trade.
Eg Managed Funds.

But also agree with TMC
There is nothing like the learning curve of using your own funds.

If $1000 is all you have on this planet then you'll learn more than if $1000 is .01% of your net worth.

But finally if you have no idea of your expectancy then your very likely gambling.
Oh and expectancy isn't predicting a 10% rise in an instrument.

+1

gg

 

[Sir Osisofliver]

Because $1000 will be incurring huge amounts of costs.



Let me start again as you obviously didn't understand the meaning of the sentence. As a beginner, there is no substitute (that i'm aware of) that replicates the same emotion as putting your own, real, hard earned money on the stock market. It may be different if you think you can foresee every situation that you will be profitable and vice versa but honestly i doubt a beginner could even start to comprehend that.

TMC - the above comment says a lot about your psychology, not your methodology. The comment "you don't learn unless there's real money on the table" is one I've heard before. It's uttered by people who are high kinesthetics. I hate to say it (because I mostly fall into this category) but the people who are high auditory (which is code for @nal retentive) will learn from backtesting without money on the table.

Cheers

Sir O

 

[Joules MM1]

Again, If you read the post, no sum of money is too small to invest as long as you meet the broker minimum requirements. Last time i checked i could put $500 on shares as long as i had enough to cover the brokerage.

i get that a lot of these conversations are about being right.......

people new to the profession of trading bring a lot of excess personal baggage and go about creating a new version of that baggage just for trading

take that psyche to the person on the other side of your trade and they'll gladly let you be right while they take your money

put your thinking into common garden-variety things; as a spectator you can see the tour de france on a bike and not see much of the race itself or france , or, you can hire a campervan and get there in style.....the rout doesnt change, the competitors dont change the scenery doesnt change and even tho you might think the cost would be less with a bike vesrsus a campervan, well, think about it.....being underfunded is like being stuck at the back end of the race and once the competitors swing out of view youre forever sweating for nothing...on a hill, with a flat and no car!

cost versus task.....

think of your capital like your basic fitness, larger capital allows you to take more hits based on the same stake size, you can rebound, take the next opportunity, whereas, with a smaller stake your options are limited to.....well, being right......

btw, some of us here speak straight to the point because, obviously, diplomatic dancing around the subject is ineffective.......the person on the other side of my trade is a non-diplomatic type of character

 

[TMC93]

TMC - the above comment says a lot about your psychology, not your methodology. The comment "you don't learn unless there's real money on the table" is one I've heard before. It's uttered by people who are high kinesthetics. I hate to say it (because I mostly fall into this category) but the people who are high auditory (which is code for @nal retentive) will learn from backtesting without money on the table.

Cheers

Sir O

I didn't say people don't learn unless there's real money on the table, i was simply implying that while some people like yourself may learn a lot from the more theory side, some people can only take so much before actually trying it in practice.

And yes as much as i would like to be auditory learner i suppose i am a kinesthetic learner.

 

[TMC93]

btw, some of us here speak straight to the point because, obviously, diplomatic dancing around the subject is ineffective.

put your thinking into common garden-variety things; as a spectator you can see the tour de france on a bike and not see much of the race itself or france , or, you can hire a campervan and get there in style.....the rout doesnt change, the competitors dont change the scenery doesnt change and even tho you might think the cost would be less with a bike vesrsus a campervan, well, think about it.....being underfunded is like being stuck at the back end of the race and once the competitors swing out of view youre forever sweating for nothing...on a hill, with a flat and no car!

 

[Joules MM1]

okydokes

how about, you start a new thread, mebe a blog-style, select a $ figure, inc costs for the funding and per trade, post a bunch of trades, warts and all........mebe you could start by restricting yourself to 4 lots of $500 and see how you go.....

you sound tuff enough to the challenge

 

[TMC93]

okydokes

how about, you start a new thread, mebe a blog-style, select a $ figure, inc costs for the funding and per trade, post a bunch of trades, warts and all........mebe you could start by restricting yourself to 4 lots of $500 and see how you go.....

you sound tuff enough to the challenge

If you honestly think i would go to that extent to prove that i am right (which is irrelevant because there is no right or wrong in this case, merely a difference of preference/opinion), then you sir are a hypocrite.

 

[Joules MM1]

If you honestly think i would go to that extent to prove that i am right (which is irrelevant because there is no right or wrong in this case, merely a difference of preference/opinion), then you sir are a hypocrite.

lulz, ok...i get where you're at.....thanks

 

[boofis]

If you honestly think i would go to that extent to prove that i am right....

Not to prove you are right, but, as the saying goes "to put your money where your mouth is"

My money is firmly with systems trading, using a statistical edge and a large enough capital base to be able to take hits and survive.

Guys like TH, Joules, Tech and others have demonstrated in other threads on this forum that they can use smaller amounts of $ and achieve profit, but there's no way in hell a beginner could come close to doing what they do in terms of trading skill/style/implementation.

 

[tech/a]

It's more about turning a consistent profit.
Anyone can have a winning trade-- we all hear about those
But never here about. String of losses or those so far gone
You put them in the bottom draw and never ever tell the missus!

Seriously very few trade here for a life influencing return.

I think the aim should be at least a second wage.
Your not going to get that with $1000
Even $50000 and your unlikely.
This of course would be the aim of anyone investing in their SMSF or living off it.

So for the vast majority trading is a bit like a win at the pokies or the track.
It will be sometime before they are in a position to influence their lives through their trading.
Best spend the time getting it right.

 

[TMC93]

Guys like TH, Joules, Tech and others have demonstrated in other threads on this forum that they can use smaller amounts of $ and achieve profit, but there's no way in hell a beginner could come close to doing what they do in terms of trading skill/style/implementation.

I fully agree, a beginner could not consistently come close to either Tech or TH.