Extracting $3.5K from the stock market each month

[OptionTradingIQ]

Click Here to see how I do it.

 

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[CarrieW]

hmm nothing like spam first thing in the morning!

 

[garyfritz]

He's not exactly extracting $3500 from the markets "each" month, either. He made $3430 in October, but he's up $15489 for the year. So he's made about $1550 per month average, starting with $110k. He's up 13.36% YTD.

 

[OptionTradingIQ]

hmm nothing like spam first thing in the morning!

Appreciate your input Carrie. I was merely trying to show people how they can make money in the market. Did you actually read the article? Maybe you could learn something. I'm sure there are others who will find this information useful.

 

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[OptionTradingIQ]

hmm nothing like spam first thing in the morning!

I see you're a forex trader, maybe you would care to share your results with the group?

 

[CarrieW]

theres a 28 page thread outlining what I am doing as well as several other threads on information and thoughts and recommended readings that I have started or posted info in as well..

the difference is I post here on the forum for everyone on the forum to read. not to get clicks thru to my website.

 

[CarrieW]

Appreciate your input Carrie. I was merely trying to show people how they can make money in the market. Did you actually read the article? Maybe you could learn something. I'm sure there are others who will find this information useful.

I did not see an article. I saw a website with a blog and products pages. I have no interest in signing up for your newsletter or for alerts or for iq products or coaching.

if you have something helpful to post, post it here. not a link to your website.

 

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[OptionTradingIQ]

I did not see an article. I saw a website with a blog and products pages. I have no interest in signing up for your newsletter or for alerts or for iq products or coaching.

if you have something helpful to post, post it here. not a link to your website.

thanks, I will check out your thread.

 

[OptionTradingIQ]

theres a 28 page thread outlining what I am doing as well as several other threads on information and thoughts and recommended readings that I have started or posted info in as well..

the difference is I post here on the forum for everyone on the forum to read. not to get clicks thru to my website.

Hi Carrie, I'm up to page 14 on your thread, some very informative information there so far. Should I keep reading? How much is your $250 account currently worth?

 

[CarrieW]

you can keep reading if you like.

my point wasnt that I am some master trader. (or better then you)

the point is if you have something useful to post, post it here. if not save the links to your website for your sig. if you post useful info people will click to find out more.

this was a total spam thread imo. from the title to the one line post with a link to your site where you sell things.

my account is currently worth 25.23. I actually blew up the first account and refilled with 100. so I am down 325bucks so far.

I am a beginner trader and have taught myself. I dont have a college education or a mentor. I am learning as I go.

this still isnt the point of my postings lol. but since you asked I answered.

 

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[OptionTradingIQ]

you can keep reading if you like.

my point wasnt that I am some master trader. (or better then you)

the point is if you have something useful to post, post it here. if not save the links to your website for your sig. if you post useful info people will click to find out more.

this was a total spam thread imo. from the title to the one line post with a link to your site where you sell things.

my account is currently worth 25.23. I actually blew up the first account and refilled with 100. so I am down 325bucks so far.

I am a beginner trader and have taught myself. I dont have a college education or a mentor. I am learning as I go.

this still isnt the point of my postings lol. but since you asked I answered.

Fair enough, I will take all that on board. Best of luck with your trading, good to get some lively discussion going in any case. Have a great day.

 

[CarrieW]

If you are really interested in contributing to the forum then you should jump into some of the ongoing trading discussions. (or start a new one)

I know that you are selling info and that is awesome. I applaud you for having the experience to help people. I have been told to start a blog myself and promote products or something but I am uncomfortable doing that at the moment.(who would want to buy things from someone who isnt successfull yet)it is definatley the way to go fastlane.

it seems that you are successful in trading and that is great!

I am sure you can post some things here without giving it all away for free. sometimes posting the right questions can be as helpful as posting the answers.

I honestly wasnt trying to pick on you and I do see that you have made other posts before this one. but honestly it didnt seem spammy to me. I would say that you will get more clicks thru to your website if you posted useful info and had a sig link then from this thread.

people here want to have open discussions and not be sold too. thats not saying they wouldnt buy something they felt has value. its all in the presentation.

I wish you luck and look forward to seeing your posts on trading. if you have an actual link to an article I would be happy to read it but all the link did was take me to the home page. I am not able to tell which article you are referring too.

If the link had opened to a useful trading article I would have posted a thank you instead of what I posted.

have a great day!

 

[JEdwards]

Hi Carrie, I'm up to page 14 on your thread, some very informative information there so far. Should I keep reading? How much is your $250 account currently worth?

Well you got the Arrogance day trader B.S. down.


Do you teach that part on your site?

 

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[OptionTradingIQ]

If you are really interested in contributing to the forum then you should jump into some of the ongoing trading discussions. (or start a new one)

I know that you are selling info and that is awesome. I applaud you for having the experience to help people. I have been told to start a blog myself and promote products or something but I am uncomfortable doing that at the moment.(who would want to buy things from someone who isnt successfull yet)it is definatley the way to go fastlane.

it seems that you are successful in trading and that is great!

I am sure you can post some things here without giving it all away for free. sometimes posting the right questions can be as helpful as posting the answers.

I honestly wasnt trying to pick on you and I do see that you have made other posts before this one. but honestly it didnt seem spammy to me. I would say that you will get more clicks thru to your website if you posted useful info and had a sig link then from this thread.

people here want to have open discussions and not be sold too. thats not saying they wouldnt buy something they felt has value. its all in the presentation.

I wish you luck and look forward to seeing your posts on trading. if you have an actual link to an article I would be happy to read it but all the link did was take me to the home page. I am not able to tell which article you are referring too.

If the link had opened to a useful trading article I would have posted a thank you instead of what I posted.

have a great day!

Thanks Carrie, appreciate the tips. Maybe it was due to the fact I was posting at 6am after very little sleep and not thinking straight (I have a 4 week old at home).

So, my question to the readers is this: I've been pretty successful trading this strategy this year, but only use a small % of my total capital. Should I now increase my capital at risk and try to start making more from this strategy, or should I stick to what is working for me?

I'm worried, that if I increase my risk, I will have a losing trade that will wipe out a large chunk of my account.

Any thoughts greatly appreciated.

Thanks.

 

[Dutchy]

Thanks Carrie, appreciate the tips. Maybe it was due to the fact I was posting at 6am after very little sleep and not thinking straight (I have a 4 week old at home).

So, my question to the readers is this: I've been pretty successful trading this strategy this year, but only use a small % of my total capital. Should I now increase my capital at risk and try to start making more from this strategy, or should I stick to what is working for me?

I'm worried, that if I increase my risk, I will have a losing trade that will wipe out a large chunk of my account.

Any thoughts greatly appreciated.

Thanks.

Bare in mind I have zero knowledge in this field but looking at it from a practical point of view.

I think asking another member whether you should invest more or not is not really a good question to ask.

The way I see it is that that would be like me asking any successful member here if they think I should invest all my money in my business. How should they know?!

With that being said, from a LOGICAL point of view, I would personally say invest a little more (considering what you are doing seems to work for you) and take it from there. No one in their right mind can give you a truly accurate answer to your question though!

 

[CarrieW]

what is the % you are risking per trade?

I dont trade anything other then forex but from what I have read as a general rule you should have no more then 2% of your account at risk in any 1 trade.

currently I am way way above that lol. due to the very very small size of my account. my max is suposed to be 5% untill I get over 1k I think then I drop it down to 2%

if you increase it too much then you will risk losing a good portion of your balance if a trade goes south wiping out hard earned gains.

I would say increase the amount of trades you do, by trading other options or stocks or w/e, so you can keep the 2% per trade but still use the same strat to make more money without breaking the rules.

 

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[garyfritz]

Position sizing is a large and complex subject.

The standard "rule of thumb" is that you shouldn't risk more than 1% of your account on a trade. Or 2%. Or 0.5%. Depends on who you ask.

The thing is, all those are totally random numbers pulled out of a hat (or less appealing orifice ). They "probably" will be safe for "most" trading situations. Maybe. Though you might be leaving a LOT of money on the table.

IMHO the correct way to approach this is to analyze your trading history. If you make money over time but any particular trade could be an enormous loss, possibly way more than 100% of what you supposedly risked, then you should be very cautious. But if you have a history of consistent wins and limited losses, you will greatly increase your profits if you get more aggressive in your position sizing.

There are scientific, analytic ways to approach this. The approach I use is to calculate the Kelly fraction on my trading history. (Quick lesson: you can approximate Kelly by calculating AverageTrade/AverageWin. Go googling, or ask, if you want more detail.) That returns a fraction between 0 and 1.

That Kelly fraction is the "ideal" amount to risk, in order to maximize your returns over time. HOWEVER you might have to endure 90%+ drawdowns to get there!! Usually people bet at some fraction of Kelly, e.g. 1/10 Kelly or 1/5 Kelly. That also gives you a margin of safety in case your system goes into a worse drawdown than you ever had in your history.

So let's assume you have enough trades in your history to give a good statistical sample. You look at your history and you find your AverageWin (average of all winning trades) is $1000, and your AverageTrade (average of ALL trades, wins and losses) is $300. That says your Kelly fraction is 300/1000 = 0.30.

Now let's say you want to be fairly conservative, and you are going to trade at 1/10 Kelly. With your trade history your Kelly is 0.30, so 1/10 Kelly means you risk 1/10 * 0.30 = 3% per trade. If you want to get a bit more aggressive, you could trade at 1/5 Kelly, 1/5 * 0.30 = 6% per trade. Risking higher levels will increase your returns but it will also increase your drawdowns -- but with a good system the returns increase a lot faster than the drawdowns. (I know very aggressive traders who trade at the 1/2 Kelly level, but only with a small account so they can stomach the large drawdowns. I personally trade my FX system at 1/5 K but I might boost it to 1/2 K once I convince myself it's a reliable system.)

3% or 6% is a lot bigger risk than the "traditional" wisdom of 1% or 2%. But in this case you've calculated the APPROPRIATE risk level for YOUR trading style. If you continue to trade similarly to your history, that Kelly fraction should be a safe and appropriate risk level for YOUR trading.

BTW if you lose money in your trading, your AvgTrade is negative, so your Kelly is negative. Which says there is NO safe level of risk for that trading approach.

I'm worried, that if I increase my risk, I will have a losing trade that will wipe out a large chunk of my account.

You WILL.

BUT: would you rather take a 20% drawdown from $100k, or a 30% drawdown from $500k?

I've backtested over 1000 trades in my FX system. Trading it at 1/5 Kelly, my worst-case drawdown is about 25%. The returns are extremely good. If I boost my risk to 1/4 Kelly, my worst DD only goes up to about 32%, but my returns are 50% higher. If I risk 1/2 Kelly, the worst DDs are around 55%, but the returns are almost ten TIMES higher than with 1/5 Kelly...

So. If you trade consistently (i.e. you can't change your strategy every month), and you have a significant number of trades to calculate your Kelly (I'd want at least 30, preferably 50-100), then the Kelly fraction tells you what level you can safely trade. I suggest you calculate your Kelly value, then enter your past trades into a spreadsheet and see how different risk sizes perform. Then decide what kind of returns-vs-drawdowns tradeoff you want to make.

 

[OptionTradingIQ]

Thanks Gary, had not thought about this approach.