Trading full time - what do you think will happen?

[Trembling Hand]

My immediate plan is this: I have $40 000 trading capital and I plan to follow one recommendation from The Chartist at a time using the full $40 000 or as much of the $40 000 as position sizing allows. I will select one trade I believe is most likely to be profitable.

This is a hair brain idea. :silly:

Ya need to start the plan again. This isn't going to get you anywhere. You can not bet your full kitty on one stock at a time.

 

[tech/a]

Doesn't it just take a couple of chart set ups and some balls and in no time your driving around in a Ferrari

Yeh--my Ferrari is a BA Falcon!

 

[Nick Radge]

My immediate plan is this: I have $40 000 trading capital and I plan to follow one recommendation from The Chartist at a time using the full $40 000 or as much of the $40 000 as position sizing allows. I will select one trade I believe is most likely to be profitable.

Jeez, I didn't see that. I'm afraid that's not the answer because I can gladly tell you that I have no idea which trade is going to be the next winner!

You will not be successful doing this. You'll join the 95% club very very quickly.

 

[professor_frink]

If i could make 50% on that $40 000 over a twelve month period (i.e. $20 000) that would enable me to take the next step down to work 3 days per week and concentrate on trading for an extra day of the week.

Most certainly it is a discretionary approach at this stage.

Don't worry about making 50%, be more concerned with defending the $40K you have.

I'd try and stay working as many days a week as I could if I was at your stage. You will trade so much better if you aren't relying on making an income off it. Unless you work 70-80 hours a week now, you should be able to find time to work on your trading at night, or on weekends, etc.

 

[metric]

the little bit ive learned in the few weeks ive traded...

1] decide what sort of trader you want to be.
2] dont lose money...its very difficult to make it back in the market.
3] if you do lose money you will find that you will put it back in through another source; savings, etc. which will quickly make trading into gambling, and you will lose money..so dont lose money.
4] if you sell and the price goes up, dont chase, wait.
5] dont lose money...

 

[nomore4s]

Funny that. To get to the top of trading as a profession takes the same effort as an elite sports person or musician or artist. Don't kill the dream. Doesn't it just take a couple of chart set ups and some balls and in no time your driving around in a Ferrari :car: :brille:

Vary valid point. To be successful at anything requires alot of time, effort and hardwork, it also requires a certain amount of talent & ability.

I will continue to learn and develop my own trading plan (however I'm not even sure if this is necessary if Nick Radge is doing it for me, will I develop a better trading plan than him? What is the point? I may as well follow his analyses and just modify the trades [position size etc.] to my own circumstances).
Jersey10.

The point would be to become a successful full time trader.

As good as Nick is, imo you can't be a full time trader purely living off Nicks trade recommendations from the chartist. You need to be able to find, plan & execute your own trades. No offence Nick.

You are at least heading down the right path by studyng hard and asking questions, everyone started somewhere, even the gurus.

Good luck with your goals.

 

[Porper]

My immediate plan is this: I have $40 000 trading capital and I plan to follow one recommendation from The Chartist at a time using the full $40 000 or as much of the $40 000 as position sizing allows.

I can't see the point in this.Why trade only one, presumably you are going to risk 2% or whatever the figure you decide on for all trades.What if you pick the duff ones?

Going by memory Nicks power set ups have a win rate of 40-45%, don't know what this equates to in potential no. of losses in a row, but I not too long ago had 14 losses in a row (not the Chartist picks) how will this effect you and your plan?

You may be better adjusting your position size and trading more, at least this way you will know quicker whether you have a positive expectancy or not.Picking one trade at a time you could trade with luck (good or bad) and still have no clue as to your expectancy.

I will continue to learn and develop my own trading plan (however I'm not even sure if this is necessary if Nick Radge is doing it for me, will I develop a better trading plan than him? What is the point?

You need to know what you want to do.

Either you join the Chartist to learn because you are interested and passionate or you want a tip sheet.I have already given my opinion that the Chartist wouldn't be good just purely as a tip sheet although I know people join just for this reason so this is only my personal opinion.

 

[Temjin]

Hey Jersey, the biggest "psychological drawback" for most traders is trying to "make" an income for living from trading. That will one day, make you very flustrated and force you to take risks that you normally wouldn't.

Understand the power of compounding.

My advise for you is to start learning with minimum position sizing first. Once you are comfortable with trading, then build up your capital and continue to compound it for at least 5 years. In the meantime, try to avoid taking ANY income out of it.

It's better to live off from a passive income than an active income. And yes, trading is an active income, even if it is fully automated.

 

[Sir Burr]

I would think trading stocks you simply will not be able to produce the returns to get any way near producing $ to live on.

Why are stocks unable to produce the returns to live on?

Is it because the volitility and volume is not available on stocks or because of the margin available with other instruments?

 

[Trembling Hand]

Why are stocks unable to produce the returns to live on?

Is it because the volitility and volume is not available on stocks or because of the margin available with other instruments?

I'm talking about a $40,000 dollar account trading EOD stuff like Jersey has stated.

 

[julius]

Making MORE time to look at charts when your new is an absolute trap... one of the first things I was told when I started was "don't spend too much time looking at the charts, it will send you nuts"

Of course I paid no attention at the time and probably spent atleast 5-6 hours a day trawling through charts for months looking for one thing or another...sounds like you'll end up doing much the same thing and I can say from experience it really gets you nowhere. You might end up with a bit of paralysis by analysis if your lucky.

The Chartist subscription service is a damn good place to start...watch the analysis each night, take a look at the charts yourself, put your orders in (all of them, not 1 as you suggested), read a few chapters of whatever your reading. 60 mins tops. Too easy.

 

[Trembling Hand]

Making MORE time to look at charts when your new is an absolute trap...

That is not a bad bit of info.

The way to make it work is to make it like play rather than a job. You don't get superior skills making yourself do something. You need to start it as a hobby and let yourself fall into it. Sitting down in front of the screen every Monday morning knowing you have to take $1000 this week is not going to be fun.

 

[njc.corp]

I am 29. I live in Brisbane. This is my story so far. I am looking for feedback / opinions of what you think may happen based on my plan to become a full time trader.

I have always been interested in the sharemarket and property investing. I purchased my first shares when i was 18 or 19 via managed funds and also purchased Telstra 2 shares which i still have. I bought my first property in 2005 and my second in 2007. Over the last 3 or 4 years i have become particularly interested in share trading and moreso in the last 4 months in trading full-time (some would say obsessed). I have done a share trading course 2 or 3 years ago which taught me about trends, stop losses, position sizing, brokers, chart patterns, support & resistance, moving averages, etc. I have read a lot on this forum, am currently reading Reminiscences of a Stock Operator and plan to read Trade Your Way To Financial Freedom and Nick Radge's book next (or the at least the first 50 pages everyone is going on about). I have recently become a monthly subscriber to The Chartist and also learn a lot there from the nightly analyses. I have changed from working 5 days per week to 4 days per week and plan to reduce my working hours more as I progress with my trading ability. The extra day I have I spend studying trading as much as I can.

My immediate plan is this: I have $40 000 trading capital and I plan to follow one recommendation from The Chartist at a time using the full $40 000 or as much of the $40 000 as position sizing allows. I will select one trade I believe is most likely to be profitable. I will continue to learn and develop my own trading plan (however I'm not even sure if this is necessary if Nick Radge is doing it for me, will I develop a better trading plan than him? What is the point? I may as well follow his analyses and just modify the trades [position size etc.] to my own circumstances). My next educational move would be to do The Chartist course and possibly some other trading courses throught the ATAA or the like. I am also considering doing a private consultation with Nick Radge as well. I have thought about doing a Masters of Business in Finance as I am interested in this area. However I am not sure if my efforts to become a full time trader would be better utilised on the aforementioned educational avenues.

My goal in the short term (the next 2 - 3 months) is to generate income from trading that will allow me to reduce my work hours more so I can devote more of my time to developing my trading.

My medium term goal (1 - 3 years) is to be trading full time and be able to pay myself a salary from that.

My long term goal is to be Nick Radge (lol).


I would like to get some feedback as to what you think will happen as a result of my plan to trade full-time.

Am I being too optimistic? Are there things I should be doing as part of my education I am not?

Thanks for reading. Would appreciate any feedback.


Jersey10.

Jersey- good luck to u -hope u do well-

u have the right idea-u want to make money- and from what u have $40,000 is more then enough to cause big profit-and don't forget huge downfall when it goes wrong-

u must stick with the basics and listen to the basic's

Coming from me- a owner and operator of a business-the basic's of anything is the winning edge-

My story-i started my business while working my normal job-it took 2-3 years to get going and make a wage-thats when i lefted my normal job i had for 5 years-but but---it did not go to well for my partner because he left his job as soon as we open up the doors for our business-he forgot that the money we were making was not for a wage it was for investments that the shop needed-

the reason i said 2-3 years is that my business sector was slow-so keep that in mind-things dont always go to plan-

i ended buying him up and investing more into the business from my old job wage's-(the power of the orginal income---)

the business has done better and better every year has i live by the basic's-it also opens up other area's to invest in-

so my story is-theirs no worries and stress in waiting if the basic's are their-

$40,000 is a lot of money-so in 1 postive u must use that money or some of it to get ahead-

not many people have $40,000 and i am sure u don't want to loose it-

The ? is do u want to invest the whole amount -if it were me i would invest 20 k-so that way u can learn from the mistakes-mistakes will happen-everyone is not perfect-thats fact and we all know it-

who here has won on every trade they have done????

i am just starting to trade and want to trade full time-but i know i must treat it like my business-this will take more time for me i say 3-5 years because this is a new ball game-but the my basic's are still the same-i won't change it-

Nick--

 

[jersey10]

Hi,

I'm going to go out on a limb here and suggest that you need to forget about trading for quite a while Jersey.

Reason being that you hold Telstra2 that you bought, what 9 years ago, and are still sitting on a 40% loss.

In my way of thinking, if you cannot accept a past loss and move on, you are not ready for trading. The classic from losing traders is that the keep their losers because they pay good dividends.

If you think you are ready for trading, why are you still holding this loser??? Are you married to the position???

bye

brty

Thanks to everyone for all the feedback it is very helpful and educational.

brty,
Obviously I bought T2 thinking they would increase in value. I only bought the minimum amount at the time which i think was 150 shares because that is all i could afford. The reason i haven't sold them has nothing to do with not being able to accept a loss.

Conversely, i believe one of my great strengths will be my discipline and ability to adhere to a particular system. For example, if i trade using a system where i expect 5 out of 10 winning trades and through the use of stop losses am able to minimise big losses then for every 10 trades i might expect to see 5 small losses, 2 or 3 small wins, 2 or 3 big wins.
If i know i am using a system that is expected to do what i have described above i would have absolutely no issue with exiting a trade that has hit a stop loss.

Jersey10

 

[jersey10]

50% profit is achievable... as is a 50% loss. Since only one stock is traded at a time the possible outcomes over a year will vary considerably depending on stock selection. One or two big winners could make the difference, as could one or 2 big disasters.

The problem is most people begin counting the winners before they even start and tend to downplay the just as strong possibility of losses. So you visualise yourself sitting on $60,000 at the end of one year, but think about only having $20,000 left as well.

If you make 100% on your first trade will you put the whole $80,000 on the next trade? If you lose $15,000 on your first trade will you replenish your trading capital and do the next trade at $40,000? Or will you go forward with only $25,000? I can throw heads 5 times in a row quite easily - 5 losses in a row is very achievable.

Personally I would be much more comfortable with 4 to 5 positions - then you have the opportunity of going with the winning trades and cutting the losers.

You could easily be fooled into thinking that you have some innate skill when it comes to trading but really you were just lucky.

Good luck

stevo

If using stop losses effectively isn't a 50% loss very unlikely? Wouldn't using stop losses make the likelihood of 'big disasters' much much lower than 'big winners'?

 

[jersey10]

This is a hair brain idea. :silly:

Ya need to start the plan again. This isn't going to get you anywhere. You can not bet your full kitty on one stock at a time.

this has got me thinking, i have just tried to do some calculations of what would happen if i took 1 trade at a time using full $40 000 or if i took 4 trades at a time using $10 000 per trade. Can you explain to me succinctly why it is better to take the 4 X $10000 trades as opposed to the 1 $40 000 trade. Do you know any threads where this has been discussed previously? I think the problem taking just one trade using all trading capital is if you get all of your losers first up your account gets drawn down to the extent that it is hard to make the money back. Is this correct?

 

[Trembling Hand]

If using stop losses effectively isn't a 50% loss very unlikely? Wouldn't using stop losses make the likelihood of 'big disasters' much much lower than 'big winners'?

No. Your method sucks. Let's say you where holding Bramble two days ago. You would be down 10%-15% on one trade before any costs. Three more normal losses of 5% and you are down 30% in 4 trades.

Your method Sucks. How are you going to stick to money management rules trading "all in" on one stock. please post about an example of your last paper trade with your targets & Stops. You will get better advice than the general suggestions and hypothetical "can dos".

i believe one of my great strengths will be my discipline and ability to adhere to a particular system.

This, I believe, is not the most important part of trading. It will not stop you from losing money. It will only stop a fast blow up. If you have no edge or a market not suited to that edge you will still blow up.

 

[Trembling Hand]

this has got me thinking, i have just tried to do some calculations of what would happen if i took 1 trade at a time using full $40 000 or if i took 4 trades at a time using $10 000 per trade. Can you explain to me succinctly why it is better to take the 4 X $10000 trades as opposed to the 1 $40 000 trade. Do you know any threads where this has been discussed previously? I think the problem taking just one trade using all trading capital is if you get all of your losers first up your account gets drawn down to the extent that it is hard to make the money back. Is this correct?

What is your maximum loss per trade? You will see that you can't trade 1 stock at a time.

Try looking at this
https://www.aussiestockforums.com/forums/showthread.php?t=10621

 

[jersey10]

I can't see the point in this.Why trade only one, presumably you are going to risk 2% or whatever the figure you decide on for all trades.What if you pick the duff ones?

Going by memory Nicks power set ups have a win rate of 40-45%, don't know what this equates to in potential no. of losses in a row, but I not too long ago had 14 losses in a row (not the Chartist picks) how will this effect you and your plan?

You may be better adjusting your position size and trading more, at least this way you will know quicker whether you have a positive expectancy or not.Picking one trade at a time you could trade with luck (good or bad) and still have no clue as to your expectancy.



You need to know what you want to do.

Either you join the Chartist to learn because you are interested and passionate or you want a tip sheet.I have already given my opinion that the Chartist wouldn't be good just purely as a tip sheet although I know people join just for this reason so this is only my personal opinion.

40% - 45% winning trades seems low, is this the norm for most pro traders? So the way people make money is not from getting the trades correct in the first place but moreso getting big returns when they are right and getting out with minimal losses (e.g. 2% when they are wrong). Are there any systems that win more than 60% of the time?

 

[Trembling Hand]

Are there any systems that win more than 60% of the time?

Yeah the ones Newbies sign up for that cost them $10,000