tag:blogger.com,1999:blog-4709646752697007273.post3792257287852709957..comments2023-10-06T06:38:49.753-07:00Comments on Lord Tedders Futures and Forex Trading: Setting Trading GoalsLord Teddershttp://www.blogger.com/profile/08853719769033533263noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4709646752697007273.post-71921007142606174752008-10-25T09:44:00.000-07:002008-10-25T09:44:00.000-07:00sdwl,To trade part-time or to rely on your trading...sdwl,<BR/><BR/>To trade part-time or to rely on your trading income as your sole source of income? These are very different. Also what market(s) are you trading and what style (swing or day trading)?<BR/><BR/>Since most people ask this question in terms of relying on trading income as sole source, I will answer it as such and give you an idea from the most aggressive to the most conservative.<BR/><BR/>On the aggressive side, assuming you are trading futures or Forex and assuming you are daytrading and making at least 200% per annum with 25% max DD:<BR/><BR/>$50K minimum ($35K to trade $15K to live on). This will mean making about $70K gross. This also assumes that your family is willing to live frugally off of about $50K per year($35K net of tax) (as you need to remaining $20K (15K net of tax) to build your account). As you can see this is living on the edge (assuming you have a family - more doable if you are a bachelor).<BR/><BR/>Conservatively I would say that $200K would ensure that even a swing trader would be able to make enough to provide for their family (trade $150K and live off $50k) assuming your swing trading makes about 75% per annum with 25% max drawdown. This would make about $110K per year, of which you would live off about $75K gross ($55K net), and leave $35K ($25k net of tax) to build your account.<BR/><BR/>Notice how in both scenarios one should always have a savings fund (to provide for you and your family when you are having a drawdown).<BR/><BR/>These are just guidelines of course and having more money is always better (assuming you know how to trade well), but of course many traders have done it with less. Many of the market wizards started with today's equivalent of $15k and $10k to live off and have made millions. Although that seems a little tight to me :)<BR/><BR/>LTLord Teddershttps://www.blogger.com/profile/08853719769033533263noreply@blogger.comtag:blogger.com,1999:blog-4709646752697007273.post-63804656897168770522008-10-24T16:54:00.000-07:002008-10-24T16:54:00.000-07:00LT, in bare minimum terms, what is sufficiently ca...LT, in bare minimum terms, what is sufficiently capitalised?<BR/><BR/>Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4709646752697007273.post-88568037153829491492008-10-23T06:46:00.000-07:002008-10-23T06:46:00.000-07:00Haha! 25% is nothing! Try 40%!Haha! 25% is nothing! Try 40%!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4709646752697007273.post-18670481070348971352008-10-22T21:42:00.000-07:002008-10-22T21:42:00.000-07:00Jules,Yeah I had a hard time accepting that in the...Jules,<BR/><BR/>Yeah I had a hard time accepting that in the beginning. My systems range from making 75% per annum with a 25% maximum drawdown up to about 10% per month with a 25% maximum drawdown. Can't escape death, taxes, drawdowns.<BR/><BR/>Drawdowns are a reality of trading. Anyone who doesn't accept that drawdowns happen is in for a nasty surprise eventually.<BR/><BR/>Understanding our emotions is the key to trading. I still have the emotions; I am not a robot. However, I see trading as a numbers game. Like sales. You have to call 1000 customers, to get 10 leads to get 1 sale. So you have to take 100 trades to make $10 while accepting that you will lose $7 and thus net $3. <BR/><BR/>I focus my emotions to be happy when I trade my plan and disappointed when I don't. I still feel good when I'm winning and bad when I'm losing. However, I am able to moderate those feelings and know that trading well (following plan) will mean money in the long run and trading poorly (not following plan) won't.<BR/><BR/>LTLord Teddershttps://www.blogger.com/profile/08853719769033533263noreply@blogger.comtag:blogger.com,1999:blog-4709646752697007273.post-46706859267014185212008-10-22T18:30:00.000-07:002008-10-22T18:30:00.000-07:00Great post, LT! Really strikes a chord :-) The 25%...Great post, LT! Really strikes a chord :-) <BR/><BR/>The 25% drawdown bit is really news to me. <BR/><BR/>I gather although we all start out knowing that losing is part of the game, deep within, we don't really want to. <BR/><BR/>My biggest problem so far is not knowing how to accept losses as a mere cost of doing business. Losing trades devastate me.Juleshttps://www.blogger.com/profile/13279368221859540562noreply@blogger.com