Retail Trading for a Living Milestone - "Feed my ego"/Thought sharing

[minwa]

I guess many here will be surprised how you seem to give up on a pretty successful and lucrative ES strategy. I for one will milk and trade and grow it as much as possible... you just never know how long your edge will hold and how much of it is transferable across markets.

But anyhow... good on you for meeting your year's target with 5 months to spare and so you can do something different.

All the best.

I am not too worried about edge not holding out..many years of studying I am convinced that price action will not change. Same model has been used to extract funds from the masses since the beginning of trading. People come and go, human behavior remains the same.

S&P is also in new highs, not my preferred location for trading. I like to trade inside ranges, with price on the left side to provide insights for upside targets. It is also a season of the year where volatility tends to come in.

 

[Roller_1]

I'll be trading price action, same underlying principle as what I'm doing in ES, of course with nuances tailored for the FX market. But mostly the same - price is liquidity seeking. Time of day patterns exists in all freely traded liquid markets, I have some idea just have to nail down specifics for the FX market. My mentors retired from mentoring, for now at least.
.

I was just reading some interviews in the book "The New Market Wizards" yesterday and one of the traders was talking about his FX trading in the 70s and 80s. Much of what he was saying sounds similar to your style Minwa about price and liquidity, this is a guy who is trading 3 billion dollar positions back then so its not pennies. So im sure your style will translate to FX nicely!

 

[cynic]

I was just reading some interviews in the book "The New Market Wizards" yesterday and one of the traders was talking about his FX trading in the 70s and 80s. Much of what he was saying sounds similar to your style Minwa about price and liquidity, this is a guy who is trading 3 billion dollar positions back then so its not pennies. So im sure your style will translate to FX nicely!

Technology has introduced some creative new challenges to the profitable trading of some of the less transparent markets.

Did you encounter references to "Last Look" or "the cartel" in your reading?

 

[Gringotts Bank]

Technology has introduced some creative new challenges to the profitable trading of some of the less transparent markets.

Did you encounter references to "Last Look" or "the cartel" in your reading?

Please explain.

 

[Roller_1]

Technology has introduced some creative new challenges to the profitable trading of some of the less transparent markets.

Did you encounter references to "Last Look" or "the cartel" in your reading?

mmm don't think, but there was mention of some front running from the banks.

Yes, please explain??

I have heard of many previously profitable traders from before this era (2005-now) who haven't been able to adjust for a variety of reasons and now don't trade

 

[cynic]

mmm don't think, but there was mention of some front running from the banks.

Yes, please explain??

I have heard of many previously profitable traders from before this era (2005-now) who haven't been able to adjust for a variety of reasons and now don't trade

A little bit more reading for your enjoyment:

http://www.wsj.com/articles/forexs-last-look-practice-gets-curbed-1432768404

http://www.bloomberg.com/news/articles/2016-04-22/ex-ubs-trader-in-cartel-said-to-help-u-s-in-currency-probe

Edit: additional article link

http://marketsmedia.com/last-look-to-remain-hot-topic-in-fx/

 

[Roller_1]

A little bit more reading for your enjoyment:

http://www.wsj.com/articles/forexs-last-look-practice-gets-curbed-1432768404

http://www.bloomberg.com/news/articles/2016-04-22/ex-ubs-trader-in-cartel-said-to-help-u-s-in-currency-probe

Edit: additional article link

http://marketsmedia.com/last-look-to-remain-hot-topic-in-fx/

I couldn't read the first link but the new market wizards book was written in 1992 before all this wiz bang chatroom stuff. haha

No doubt there is dodgy guys out there where ever there's big money to be made there are dodgy people

 

[cynic]

I couldn't read the first link but the new market wizards book was written in 1992 before all this wiz bang chatroom stuff. haha

No doubt there is dodgy guys out there where ever there's big money to be made there are dodgy people

Too true!

Apologies for that first link. It is possiblee to read the full article when it is accessed via a google search.

 

[Newt]

S&P is also in new highs, not my preferred location for trading. I like to trade inside ranges, with price on the left side to provide insights for upside targets. It is also a season of the year where volatility tends to come in.

Amen. Just knowing when NOT to trade is a skill that takes most people a long time to figure out.

 

[Wysiwyg]

Thanks..that tax too when it comes ! I always try console myself that the AUDUSD conversions will cover a big chunk of the tax..so what I am earning is close to net.

I can't see how that is true. When you convert from USD to AUD, that whole amount (minus trading expenses) is taxable. If your earnings in USD are 400k then converted to AUD is 532k. Tax on AUD 532k is

Based on the information you have provided in this tool, it is estimated that you will have to pay an amount of $227,967.00 tax.

of course trading expenses will reduce your taxable income but the tax bill will be taking a sizable chunk of your account balance.

$180,001 and over = $54,547 plus 45c for each $1 over $180,000

 

[McLovin]

I can't see how that is true. When you convert from USD to AUD, that whole amount (minus trading expenses) is taxable. If your earnings in USD are 400k then converted to AUD is 532k. Tax on AUD 532k is

They're taxable when earnt, not when converted back to AUD. Also any fx gain/loss will be taxable/deductible.

of course trading expenses will reduce your taxable income but the tax bill will be taking a sizable chunk of your account balance.

$180,001 and over = $54,547 plus 45c for each $1 over $180,000

If minwa keeps up his trading success as he has thus far he probably needs a better structure than trading as an individual.

The Cook Islands is where it's at these days if you want ultimate asset protection.

A few overseas in a low/no tax jurisdiction would do wonderful things for compounding. BMWs are also cheaper.

 

[Wysiwyg]

They're taxable when earnt, not when converted back to AUD. Also any fx gain/loss will be taxable/deductible.

Yes but isn't that conversion to AUD made at the time of sale? When is the conversion made?

 

[McLovin]

Yes but isn't that conversion to AUD made at the time of sale? When is the conversion made?

Yes, sorry I misread what you were saying.

 

[Ves]

They're taxable when earnt, not when converted back to AUD. Also any fx gain/loss will be taxable/deductible.

Probably not relevant in this case (as we're talking some serious coin and also CGT assets), but don't forget:

https://www.ato.gov.au/business/For...50000balanceelection#The250000balanceelection

The $250,000 balance election is pretty useful. Say you've left money in your trading account after you've sold some assets and the only gains from that point on have come from foreign exchange movements whilst it sat idle.

Might be a few hoops to jump through. But worth a read.

 

[McLovin]

Probably not relevant in this case (as we're talking some serious coin and also CGT assets), but don't forget:

https://www.ato.gov.au/business/For...50000balanceelection#The250000balanceelection

The $250,000 balance election is pretty useful. Say you've left money in your trading account after you've sold some assets and the only gains from that point on have come from foreign exchange movements whilst it sat idle.

Might be a few hoops to jump through. But worth a read.

Interesting! I didn't know about that. Can you have it apply up to the first $250k, or is it that if your account is over $250k then the account is ineligible?

 

[Ves]

Interesting! I didn't know about that. Can you have it apply up to the first $250k, or is it that if your account is over $250k then the account is ineligible?

It sounds like it's the latter.

But it doesn't seem to say that you cannot make an election for an account you'd keep under $250k, and then have other accounts that are not stated on the election to keep any amounts above the threshold.

In all honesty, I've only ever used this for a client once. And that was clear cut, they just had a small foreign bank account that was set up originally to bank dividends from a small foreign share holding. Occasionally the amounts were transferred back to Australian bank accounts.

 

[Gringotts Bank]

I am not too worried about edge not holding out..many years of studying I am convinced that price action will not change. Same model has been used to extract funds from the masses since the beginning of trading. People come and go, human behavior remains the same.

S&P is also in new highs, not my preferred location for trading. I like to trade inside ranges, with price on the left side to provide insights for upside targets. It is also a season of the year where volatility tends to come in.

Any updates, minwa?

 

[minwa]

Any updates, minwa?

Haven't been in the ES front. Got the vol pop expected this time of year. Treasuries looking wild at the moment so still waiting for the dust to settle as things are still going on behind the smoke & mirrors of the election.



Just been busy studying the currency markets.

 

[minwa]

Inspired by Sam to do an update(it's also year end)..I know he's looking for 5-10 years but this is all I got. Hopefully inspire him or anyone else a bit back about trading. Here's 3 years since inception.



Monthly analysis so units are in months. ie. 28 positive months, 9 negative months. (can't ever seem to shake the bloody 75:25 ratio..an average month will mostly likely have around that 15:5 days ratio too..still chasing that golden Pareto 80:20)

Returns slowed down since July..much more work needed in improving FX.



Finally about to complete withdrawing initial deposits (which was varying, over time - not a single lump sum from inception..so note that it is a cumulative tally of in/out - I did not turn 1 into 392 lol) out, last 1.4k to go before everything in the account will be from pure profits. Bloody tax and living expenses eating into the compound. Got lucky on exchange rate - averaged in just a bit under parity and now at 0.75. Wasn't planned, nice to have it go my favor no need to hedge and extra bonus.

Happy new year.

 

[ThingyMajiggy]

Inspired by Sam to do an update(it's also year end)..I know he's looking for 5-10 years but this is all I got. Hopefully inspire him or anyone else a bit back about trading. Here's 3 years since inception.

View attachment 69104

Monthly analysis so units are in months. ie. 28 positive months, 9 negative months. (can't ever seem to shake the bloody 75:25 ratio..an average month will mostly likely have around that 15:5 days ratio too..still chasing that golden Pareto 80:20)

Returns slowed down since July..much more work needed in improving FX.

View attachment 69103

Finally about to complete withdrawing initial deposits (which was varying, over time - not a single lump sum from inception..so note that it is a cumulative tally of in/out - I did not turn 1 into 392 lol) out, last 1.4k to go before everything in the account will be from pure profits. Bloody tax and living expenses eating into the compound. Got lucky on exchange rate - averaged in just a bit under parity and now at 0.75. Wasn't planned, nice to have it go my favor no need to hedge and extra bonus.

Happy new year.

Your posts do inspire me, but there's just one thing(or two) that bugs me, you basically had the best possible help in trading imaginable as you were gifted 300k by family and friends was it? To start trading. Also you had a mentor that knew what he was doing, two incredible blessings in your trading career. Not that it's anything against you and you've clearly taken it all on board and done well from it I think(those are really confusing account stats, so what have you made, from beginning with the funding to now in profit terms, that 392k in 3 years?). But if there's ever going to be a dream start that will help someone "make" it, it's those 2 things. I'm 100% sure I could still be going in 3 years well and truly if someone lent me 300k to trade with.

But it is awesome to see and keep it up