How much you need to trade for a living - A Professional Trader’s thoughts
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- Опубликовано: 30 янв 2025
- Time stamps:
00:09 - How much money you need to trade for a living
00:46 - Trading with your own capital
01:49 - Top 15% of the US household income is $100,000
02:10 - Stanley Druckenmiller made 30% a year for 30 years
02:34 - Example 1: You make 20% a year
03:15 - Running into draw down
3:36 - Let’s assume you have $750,000
4:21 - Let’s assume you have $1,000,000
12:35 - Psychological Pitfalls
14:43 - Managing other people’s money
16:49 - Summary
![Noob To Max With DRAGON REWORK In Blox Fruits [FULL MOVIE]](http://i.ytimg.com/vi/LnBMOinoOvA/mqdefault.jpg)
I wish more of the trading community were as upfront and honest about the reality of trading full time. Great video Matt! I wish someone would have given me this type of advice when I started to learn. Market tuition is real, lol
I’m glad you enjoyed it. Yes, it is VERY real! Lol
Thanks Matt, I'm retired and did property development for a living. You got one payday at the end of the project. The ups and downs in property development makes trading psychology very easy. Trading psychology is so much easier as you are only dealing with your own thoughts that you can control. With property development you are dealing with so many different people, and a lot of them will let you down. Personally, I think trading is so much easier than property development. Trading has its challenges also but as long as you don't get upset when you loose a trade and realize that it's just part of winning.
Whats your return? Im a builder & decided to try trading during down time
@@fourstars5270 I started buying shares back in 1997. Returns vary. It will take you at least 2yrs to make money and that is working at it full time 6 days a week. If you are starting out, trade on a very, very, very, small account as you will loose your money, guarantee. I was also CFO for a family building company for 20yrs. I've been around finance for about 30yrs, have also worked in banking. It takes time. People think they'll open an account and start making money. It takes a lot of time and discipline to learn to trade as there are many different styles and only you can learn which style is right for you. You didn't learn how to build a house in 3 months, it would have taken you years and you would have made lots of mistakes in the process. Trading is the same. Good luck and have very realistic expectations.
Thank you Matt for an amazing and honest opinion. I’m 16 months into part time trading. Talk about entering at the top haha. However! It’s been an amazing ride so far with sooooo much learning and I’m genuinely enjoying it. My day job involves lots of curves to interpret. Like watching 7-10 curves in real time to make decisions on the spot (geosteering engineering) and I’m darn good at it. So I thought, what the heck, trading is kinda similar in a sense but boy was I wrong. I’d say I had an A+ trading training courses that changed how I look at charts completely that covered TA and trading techniques based on (price+volume+volatility) from a seasoned and proven winning trader. BUT the psychological part is as big and as important as our TA and trading learning curve. It wouldn’t be far fetched to say that the psychological part is more important than TA. I was thinking of quitting my job that pays me +100k$ to focus on trading and improving my trading skills but thank God I didn’t as I had great awakeningS. I consider myself very smart or at least above average but again THIS IS NOT an easy job. It needs discipline+dedication+humbleness+never ever thinking you made it and maybe just maybe one will be successful doing it for a living. With all of that said, I love trading so much that I’d be happy to make half of what I’m making now CONSISTENTLY. I freaking love this game and only the game will teach me the game. It’s said you need 3000+ hours to be good at something. That’s 3 years of 8 hours DAILY. Past year I had no vacations as every time I had off I was learning and learning and learning. It’s not a lot as someone for sure worked harder than me and I have to continue to be successful. Deep down I have the feeling I’ll make it one day and God willing that day will be soon.
Enough rambling from me and thank you again Matt for all the knowledge you share. Definitely one of the FEW good ones out there. God bless.
I enjoyed and benefitted from this advice. Not only it is on target, but also well organized. It is honest and realistic. Thank you very much.
Thank you so much for this video. It is something I have wondered about in the last few months. Thanks for the actual numbers.!$$$
What a brilliant brilliant brilliant video. Every one thinking about trading should first watch this outstanding piece of guidance from a pro. Most of the trainers or trading education sites don't talk about this reality so that they dont scare away prospective clients. God Bless
I love this information. Its going to be very instumental in my trading journey planning for the coming year
Great to hear!
if you have a 30 or 40 percent drawdown, you probably need to rethink your stop loss and trading strategy.
Thanks Matt for this great video. I totally agree with what you've said and would add that one should always plan for multiple sources of income, passive if possible, before moving to trading full time to have a cover in case of big drawdowns or extended bear market.
Absolutely. This current market is a great example
I hate my job but it does allow enough flexibility for me to swing trade part time and earn a good living in a LCOL area so I can keep stashing away capital. So for me there's no rush to get into trading full time, especially with the market as choppy as it's been, even though I hate office environments and taking orders from a boss. lol
Smart call! We've all been there. I didn't care for working in a cheese factory at night while in college to build my capital either!
I think a lot about this topic. My calculations are about modest 10% annual return. Then I need 120000 EUR capital. Seems too small but standart in my country is low and I appreciate freedom much more then high living standart. Eventually I will quit if only 1 year bull market is in front and I must be prepared mentally for 2 years of drawdown. I have raised my capital recently with loan /interest is still low in our banks/, so now learning, experimenting. I have made 150% from 2018 with small cap domestic stocks, but world market is different. Hope after 7-8 years I can be full time investor. Thanks for the videos, very helpful!!!
It's great that you have a strong understanding of what you need. I wish you a ton of success!
All great points Matt, not to mention that you have to be very consistent and disciplined in your methodology if you are going to be a consistently profitable trader. All it takes is a small wandering of your mind to justify a slight change to your approach. The market has an uncanny way of "knowing this" and punishing you for the lapse. You have to be a solid risk manager. All that matters is if you have an equity curve that goes from the Lower Left to the Upper Right with acceptable drawdowns, which are inevitable. You only know this analysis not from any one trade, but after a given sample size that will tell you whether you are disciplined and that your plan is solid. I have a very consistent 80/20 win rate, but I do lose 2X what I make on a given trade. This only works if you have a high win rate. I analyze results in a 25 trade sample size. You also have to have a trade system that you have conviction in, fits your psyche, and can trade it while minimizing errors and mistakes. I don't say eliminate, because you will always do something, sometime that amazes you as to why you did that when it violates your plan. Fear & Greed, always there on your 2 shoulders fighting for your brain's attention...
You are completely right on every point!
Hi Matt, how many hours do you spend looking at charts and checking your positions, watchlists etc.. on a daily basis? I'd really appreciate it if you could do a video on your daily routine.
Trading for a living needs a million dollars, as you mentioned in many cases, but I hope that there will be another video about those who want to trade and not withdraw from profits until they reach this amount. I mean by that small investors who own between 10k to 100k.
Because I noticed that most of them go to the options or crypto to get to this amount as soon as possible, with the mentality of gambling more than investment, and they may need guidance because they are many and spread on the Internet extensively.
There is no shortcut, and most who do that eventually blow up. Mathematically, trading bigger than your system is built for will ultimately result in lower returns.
I am preparing to make the leap into full-time investing, my biggest concern is the psychological aspects. Do you have suggestions (books, trading psychologists, classes, etc.) to help with overcoming the mental hurdle of pulling from capital for living expenses, drawdown and the guilt associated with leaving the 9-5 rat race. Any advice would be greatly appreciated.
I’ve been self employed for 25 years now as a real estate investor. Making the transition from one business to another seems damn near impossible to me.
I get overwhelmed just thinking about it.
Not to mention the thought of losing to the market what I spent 25 years to accumulate scares the hell out of me.
With that being said, I would LOVE to trade for a living.
I simply cannot figure out how to scale out of one business while scaling into the other.
I cannot sit at my computer during market hours while running a business that’s paying my bills.
It’s depressing because I feel like I have the knowledge, discipline and capital to survive off trading, but I cannot figure out how to make that transition!
I think you’ve answered your own question. It sounds like you probably shouldn’t. With today technology, you can just be very disciplined and structure your strategy to work with your current business
I would like to see a video on contrast of how your trading was for NBF (style, size, risk) and constrains on tickers you could trade vs how you do it for yourself now?
Good idea, thanks
Thanks for responding @@carusoinsights
Great video, thanks Matt!
Make some videos about current maker, like, weekly / monthly view of you. That will be interesting to watch
I keep that for paying members, so I try to bring more educational and other topics to this channel
@@carusoinsights this channel is not interesting..
Thank you ,,, curious to know do you trade daily ? Are you more of swing trader ? Do your course apply to day trading or otherwise ? Thank you again
Yes, absdolutely. 20% with $500k capital that is 100% capital is exactly risky because markets do drop -50--80% eventually. Unless you make 20% with incredible stop losses or protective puts etc. strategy. But 20% with $500k deployed while another $500k is in cash (5% interest) or in gold/silver is much better because then you can use it for opportunities when corrections/crashes happen. Think about as if you would live on it for next 1000 years. And do not forget 4% inflation so 24%.
I think about trading for a living all the time. It's my dream, and I'll make it happen. But currently under capitalized, especially for stocks. Wondering if FX is better market to trade for a living a bit earlier, to meet that 100k yearly income, because of the higher leverage component in FX. It does entail a lot of risk but currencies are not as volatile also. Thoughts Matt?
Great insight !!
Matt, may a scalping approach, just trying to grab 10-50 bps out of the market each day, be a more reliable system than Day/Swing Trading for a living? I seem to see it as a more attainable or realistic approach than taking on trades that you have to leave on the table for day(s)-week(s), because it seems more attainable in most market conditions, with less uncertainty. It's just grabbing a small piece each day, but over time it grows. Maybe even just grabbing 20-30 bps each day... It seems like just going for base hits instead of home runs, but still adds up nicely year end.
Let's say that someone could live very comfortably off of $24k/yr (simple living in LatAm), and they have 100k to work with (and additional savings to last 1-2yrs in a drought)... Could probably rely on a scalping approach just pulling 10-50 bps/day ...?
I think the shorter the time frame, the harder it will be. Machines now own the day trading realm
@@carusoinsights Thx 4 your input Matt. It's possible to learn and become familiar with the operations of these machines/algos, maybe becoming predictable to some degree, isn't it? Especially if someone focuses on only 1 or 2 diff Stocks/ETFs?
Very excellent, thank you
Thank you Matt!
My pleasure !
Thanks Matt
"Don't raise your voice, improve your argument." -
Great wisdom here
Thanks, Ross!
Matt, this was great. I’m in a different scenario. I have enough capital but I dont have the skill to trade that big yet. What do you recommend? I was thinking on putting it everything on the SPY (If I have a long term CAGR of 10% I’m more than happy with that) and simply make pilot trades and go bigger until I have a solid record of positive expectancy. Any comments on this strategy?
I would suggest to educate yourself as much as you can. Diversify your approach. Join some reputable services to learn the rope. It is a long journey and it will take > 10 years to master.
@@hppeng Thanks. Doing that. I have been subscribed to Minervini Private Access for 2 years now but its been a terrible market for breakouts and Im realizing this is way harder than I thought thats why I dont' want to trade big until I see I can do it consistently and on the meanwhile accept the SPY return.
I think waiting for the extra capital is a good idea, but your assumption of 10% CAGR from the SPY is a BIG leap of faith. There are MANY times in history where the SPY did much worse than that.
Wheel Strategy might be great for your scenario
Real life income according to US census is $41k per person. Household income median is $75k.
Matt, I know you work with / personally known / heard from a lot traders, and I am wondering if you can tell us some stories ?
What kind of stories?
@@carusoinsights Success, failure, blow up, etc
nice one
Trading for a living is not easy. A friend of mine, had an employee, trading forex, made good returns for four years, quit the job and doing it full time, and lost it all in one year, and went back to his old job. So you need a good back up plan too....
I agree. That''s why I emphasized how important it is to stress test your system through an entire market cycle at a MINIMUM
Is prop firm a solution?
U can’t trade equities on “prop firm accounts” only FTMO let’s u swing and they don’t have all names on Nasdaq or whatever. So can’t trade growth names. If you go to an actual prop shop that you could but you have to perform.
Each is different, but it’ll definitely get you some experience even if it isn’t exactly what you want to do
Comparing fund manager returns to individual returns is like comparing apples to potatoes.
You can move to full time trading but ensure you can pay your monthly bills from others stable source of income.
That is typically the easiest way to do it. It just isn't possible for many starting out.
@@carusoinsights Agreed but to much pressure when you realize you can not pay bills from trading. Trading is like being a Contactor there is not monthly income