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Weekly income from trading - is it possible?

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jersey10

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I would like to find out what level of trading capabilities you would require to pull $500 a week from a starting trading capital of $50000.

Who would be confident that they could do this and how long have they been trading?

Are there any trading techniques that would give a high probability of being able to do this over the long term

this is my aim: $500 a week 'wage' from a trading capital of $50 000 (i.e. 1% per week). this would be after brokerage too. so maybe up to 500 a week in brokerage (10 -15 trades) therefore 2% per week.
 
So many things wrong with this thinking I don't know where to start.
 
In Risk Management terms 1% of your bank would be $500-, so risking $500- on any one trade you would need a risk/reward of 1/1 to make $500-. Which is fine as far as that goes. Win 50% of trades with an R/R of 2/1 you've made your $500-.

Trouble with this (apart from winning 50%) is on a good week you are going to stop winning when you have made $500- and on a bad week you are going to keep losing because you have not made $500-.

IMHO profitability is determined by the Win% and R/R. Only when these are known, can you determine how much you need to risk on each trade to make $500- a week. However limiting your risk to 1% of your bank size as per the above example is a very good start.
 
quality intraday futures traders return anywhere up to 5 x account balance...

but i'm with trembling hand, focus on the process not the profits
 
Yes it can be done, Jersey10. You need to get to stage 3 trading ability.


Stage 3. Consciously competent;
- Consistent traders with positive expectancy who understand why they have a positive expectancy and act accordingly.


[Thanks MichaelD I borrowed this.]
 
jersey10 said:
this is my aim: $500 a week 'wage' from a trading capital of $50 000 (i.e. 1% per week). this would be after brokerage too. so maybe up to 500 a week in brokerage (10 -15 trades) therefore 2% per week.
Click to expand...

Best rethink your strategy IMO. Even at 10 trades per week, (minus brokerage and CGT) comes to approx $1500 worst case to make $500. So you look only to make $150 per trade?

I have no idea what the average is for the forum, but I day trade with less capital than $50,000 and well surpass $500 p/w (on average). And that could be wrong with the figures for you.

There are posts on this site that have different techniques/strategies explained and proofed. Studying those and other methods and playing on paper before committing $$$ might refine your strategy and maybe save you a few dollars as well, if not make you more.

Remember, My views expressed are not, in any form, to be taken as financial advice. I post my opinions for commentary only.
 
jersey10 said:
I would like to find out what level of trading capabilities you would require to pull $500 a week from a starting trading capital of $50000.
Click to expand...

TH makes a good point but I'll have a go

A step before the above for starting to trade will be what you resonate with, method, type of market, instrument, time frame etc etc.

Your results are likely to be determined by the market nothing like a weekly wage.

jersey10 said:
Who would be confident that they could do this and how long have they been trading?
Click to expand...

If trading stocks in the ASX in the current conditions as the make churns and chops around very few if any on a weekly basis the best will wait patiently for the right moves to come which means doing nothing.

Even then they will get whipsawed if they push the wrong time frame.

jersey10 said:
Are there any trading techniques that would give a high probability of being able to do this over the long term
Click to expand...

Ah the holy grail, there are no certainties in the market when it comes to profits

jersey10 said:
this is my aim: $500 a week 'wage' from a trading capital of $50 000 (i.e. 1% per week). this would be after brokerage too. so maybe up to 500 a week in brokerage (10 -15 trades) therefore 2% per week.
Click to expand...

Others I am sure can give some good guidance in this area
 
In order to find the trades with higher probability of gains then market scanning software is essential.With the software you can define the parameters with your present trading experience to avoid tediously pawing over individual stock.
 
Sounds like the pipe dream.

First find a trading strategy that works. Which instrument(s) you want to trade and which suit you personally. Looks like IFocus beat me too it.

Also remember, even if you can make $500pw, you are then taking all profits and end up with a depleted real capital base (initial capital, minus inflation).

Consistency is HUGE for the day trader also. You do not want multiple loosing weeks/months in a row, or it can hurt!

I would say 50k is too low to live off. If others say they can do it (where are you living, the local squat?), I would want to see trading statements before I beleive.

What platform are they using to trade (how low is brokerage, data feed etc)? How are they increasing their capital base while still living off it? What returns are they making 100%pa? Highly doubt it would be an understatement.

If so, join a prop shop and live the dream!

One more thing to mention, a strategy that is prooving very successful lately, is waiting for major divergences between the XMJ and XFJ. Lots of sloshing between the two over multiple trading day periods. A strong divergence, and its switch time. Simple, but has been effective lately.
 
the short answer is yes... BUT only if you know what you are doing.

If you are new to trading, I doubt very much - with all due respet - that you will be able to achieve $500/w consitently right from the start. My advice, start small, think about the number of wins, and not how much money you could make. When you achieve a certain WIN/LOSE ratio, up your ante bit by bit...

With me, it has taken almost 2 years to reach a stage where i can say "yes I can achieve $X/wk consistently".

as with everyone above has been saying...

a) need a strategy
b) need discipline, discipline, discipline, discipline....
c) think % wins... not $ profits

With $50K... technically, $500/wk is possible if you use a leverage product.
 
$5k account balance (yes five thousand, not fifty thousand)
1:100 leverage
10 pips (net of commission) a day on AUD/JPY @ 100,000 lots (only using 20% of account balance, 10 pips = 2% of account)

equals roughly $500 per week, yes it's possible, but there are far too many other factors you need to think about - and it takes time to do it, and best not to commit real money until you're fully aware and know how to manage risk, technique and money.

^ multiply lot size and profit (AND loss!) above by 10 if you start with $50,000.
 
tayser,

At the rsik of sounding cliche, anything is possible if you want it bad enough and your willing to put in the time and effort to make it happen. Why not paper trade to see you think it can be done.... just an idea.
 
...I have been. I lost interest in equities whilst 'paper trading' - because there are so very few free or low-cost simulators out there to train yourself on. Learning about all the aforementioned areas already discussed by everyone is best done in a demo account when it comes to FX.
 
By you using the word "wage" i will assume you want to do this as a living, i.e. no outside employment.

By this assumption you'll need living expenses, basically the entire $500 per week you make.

This means you're trying to make 26K per year, since you are living off your profits each week, there is no compounding effect (forget about capital maintenance -inflation- for now), hence your required rate of return is 52%p.a. Put it this way, high risk funds tend to get 20-30%p.a.

Judging by your OP i'd say you are not an experienced investor/trader.

In conclusion, get a job
 

2% a week return = 104% return a year.

Is that possible? absolutely not..you can be an ultra billionaire with that sort of return

You maybe lucky to pull it one once in a while but to keep it going on a regularly basis not much different than taking 50K to the casino.
 

Ok I will chime in.

Can it be done. ABSOLUTELY.

Lets say you aim is $1000 per week (data+ brokerage+ Tax+ etc) to get you $500 wage.

That's just 40 points per week on the SPI. That is no hard task for an experienced trader to average trading just 1 contract. and $50,000 would cover that no problem.

Don't give me the compounding thing you don't need to compound your account until your richer than Buffett.

jersey10. Will you be able to do it. No. Sorry, but thinking like you have stated in your first post is about as far away from the right approach as I could imagine.
 

In actual fact it is very possible and with an extremely low degree of risk.

Consider the ~20:1 leverage of futures for example. 104%/20 = ...

Risk : variance (drawdown) is proportional to holding time. (risk is not equal to leverage)

And no, returns don't scale with account size because of slippage.
 

Its possible.

But not probable.

OK, you want $500 a week.

Simple!!

Take 26 weeks worth of wages immediately out of the Kitty.

Thats approximately $13k

That gives you 6 mths to read as much as you can, learn as much as you can about a few stocks and papertrade for a while.

When you think there are a couple of good stocks that you can see a good uptrend and believe the entry point is pretty close enter your $37k that you have left. This way, you are at least allowing some time for the stocks to move rather than relying on a small kitty to get you out of trouble consistently each week. Don't forget to set Stoplosses along the way.

Remember, you are out to preserve capital at all costs.

It also takes away alot of the stress.
Trying to daytrade on a minimum is a sure fire way to lose everything.

Cheers markcoinoz
 
I'll chuck in my as well.

Totally agree with TH here. Lots of folks are doing just that and more right now.

Is it easy? Technically it is much much easier than many things. You do of course need a method that works. The difficult part is mostly Psychological. Managing the mind can be a tall order.

TH has got a thread somewhere that discusses how the mind can screw up an otherwise good method and how he had to find his natural style etc. Perhaps he could post a link to that thread (I can't remember the title of the thread).

As for the compounding argument.

Day trading is a profession and you need to take out wages from your winnings. This will limit the compounding ability to a greater or lesser extent. You will also eventually run out of adequate liquidity.

Obviously you can compound it up to a certain extent, but most day traders will day trade a set amount of capital and any excess will buy scrip for the bottom drawer, rather than ramping up their day trading excessively.
The reasons for this are probably psychological as well. Trading 1 contract is different to trading 5 contracts, is different to 20 contracts, 100 contract and so on.

Just my
 
jersey10 said:
I would like to find out what level of trading capabilities you would require to pull $500 a week from a starting trading capital of $50000.
Click to expand...

I believe it can be done.
A few months ago I would have said impossible.

I won't say the only way but i think probably the easiest way to make that sort of money (1% per week unleveraged) is through a high frequency trading system.

So its possible but it would take a lot more than 10-15 trades.

Actually I would say this is impossible with 10-15 trades.

Because of the high frequency sort of system that is required for these sorts of returns, I would be looking at forex. Trading (ASX) stocks the brokerage would kill you.
 
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