OK so rather than this being the Pit Trader/Art Cashin/Buddy Fox/whomever show and a vehicle for other previously banned multinickers like Brisvegas to air their grievances, perhaps we can turn this into something more positive.
Like HOW to make 3k a day day trading?
It's not impossible, people are doing it and more. But what would it take for a retail trader.
Every trader knows that you can never just keep trading til you make your 3k and then go hit the pub. Some days everything you toiuch turns to ****. So it is 3k on average.
That means that some days you'll have your @ss handed to you, while other days you need to make weeelllllll in excess of 3k for it to average out - $~750k per year
So what does it take?
How much capital?
How many markets? One? Three? Several?
How much risk per trade?
Scalp or intraday swings?
Good call Wayne. I have a 2-3 year plan trying to get there. Here's how.
What does it take?
An edge that is
scalable in the right market condition, and a fully trained mindset that is comfortable with big numbers. I think I have got a usable edge in one of my long/short equity strategies. It has returned a good equity curve over 300+ real trades. But the next step is to trade it on much larger capital to see how well it scale. Apart from the mental aspect of getting accustom to larger P&L, I also need to take care liquidity / slippage issues when working much bigger positions. It is one thing to buy a stock for $5-10K, quite a leap to buy $200K and get fill straight away.
How much capital?
I was thinking $2m making 40% return would probably not be unreasonable. Alternately, a mini $10m hedge fund (of investors' money) returning 40%where I get paid 2/20 would also do.
How many markets?
Obviously the number of opportunities each year is directly linear to the return. To get 40% return on capital like $2m I would need 400-600 trades. This means watching over 3-400 pairs.
How much risk per trade?
This is a key factor. The position size per trade is again linear to my return. At much smaller capital I was comfortable sizing each trade at 15-20% of capital. But if I was trading $2m then 8-10% would probably be the most I would put down based on current thinking.
With 15-20% sizing for each trade, 70-100% return is not out of the question, but with 8-10%, 40% return would be much more realistic.
But above all the key factor is in fact margin required for leverage. At no leverage and 8-10% per position you can hold 10 positions at a time. With margin of 20% you can comfortably hold 40 positions. Higher leverage allows you to take the next opportunity that comes along and reach the total trade per year quota.