Thursday, January 6, 2011

trading for a living

"...if you focus on (minimizing your) losses, profits will take care of themselves.

A person who makes 25% profit annually is a king of wall street. Many top flight money managers would give away their first born child to be able to do this. A trader who consistently doubles his money each year is a star in this business.

If you set modest goals for yourself and achieve them, you can go very far. If you can make 30% annually, people will beg you to manage their money. If you manage $10million, not an outlandish amount in today's markets, your management fee alone can run to 6% of that, or $600,000 a year. If you make a 30% profit, you will keep 15% of it as an incentive fee, another $450,000. You will earn over a million dollars a year trading, without taking big risks. Keep these numbers in mind when you plan your next trade.

Trade to establish the best track record, with steady gains and small drawdowns."

- Alexander Elder, Trading for a living.

“Being right has nothing to do with making money.... Most people try to find a high-probability entry with no concept of an exit, or of adequate position sizing. This usually leads to a trading methodology with a negative expectancy. On the other hand, if people understand the role that exits, and position sizing play in systems, they could be quite satisfied with an entry system that only produced 40 percent winners.”

- Van Tharp, Trade your way to financial freedom