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J-
Yes, I agree. That is really what I'm experiencing
in trading full time for a living. I don't make much.
I sweep my futures account each month.
I agree with Gary, insofar as it is "difficult" to
compound. Not impossible. I trade next to quite a
few successful traders each and every day now who've
done just that.
Living expenses is definitely a key point to watch.
But if you have CONSISTENT results with 2 contract
plays on a 10k account getting to 4 contracts and then
beyond is completely doable.
m
--- Jimmy <jhsnowden@xxxxxxxxxxxxx> wrote:
> Years ago I lived in Crawford, Yep where the
> President's ranch is.
> My neighbor had a pretty nice size spread and one
> day I asked him how
> ranching was doing. He told me you need to have
> your income worked
> out before you go into ranching. Trading is kind of
> like that isn't
> it?
>
> Jimmy
>
> Friday, September 17, 2004, 10:17:26 AM, you wrote:
>
> >> I find it an incredible ever repeating cycle
> >> that there exist so so many undercapitalized
> would be
> >> traders that have such supposed "really good"
> systems.
> >>
> >> If what you have is truly good, aka: CONSISTENT.
> You
> >> won't need help for very long. Compounding will
> stomp
> >> out the problem of undercapitalization.
>
> GF> Try living on the fruits of your compounding if
> you start out
> GF> with $1. Make 50%, 100%, 1000% a year, doesn't
> matter -- there
> GF> still isn't enough to buy groceries.
>
> GF> Compounding works great when you have a
> decent-sized account, but
> GF> ***ONLY*** if you don't have to bleed it for
> living expenses,
> GF> taxes, etc. If your trading is your only source
> of income, then
> GF> you need a pretty large account. I wouldn't try
> it with less
> GF> than $250k, and $500k or more would be a lot
> better. (I *DID* it
> GF> with a $100k account, and returned over 50% for
> several years.
> GF> And by the time I paid taxes & other expenses,
> my account was
> GF> smaller after 2 years than when I started. And
> then you have to
> GF> have enough surplus to live through the
> inevitable dry spells...)
>
> GF> Even if you have some way to shelter your
> account from tax and
> GF> other expenses, compounding can seem maddeningly
> slow if you
> GF> start out with a small pile. We all know
> markets change, and a
> GF> system that works now might not work forever --
> or you might just
> GF> prefer to retire 5-10 years sooner if you could
> find a way to do
> GF> it. Someone with a $10k account and a 50%/yr
> system might not
> GF> want to wait for 12 years for his $10k to turn
> into $1M. If he
> GF> can make $20-50k a year selling his signals,
> without compromising
> GF> his results, he has a way to grow his account
> much faster than
> GF> 50%/yr, and reach his goal MUCH sooner.
>
> GF> Undercapitalization IS a real and serious
> problem, no matter HOW
> GF> good your system is.
>
> GF> Gary
>
>
>
> --
> Best regards,
> Jimmy
> mailto:jhsnowden@xxxxxxxxxxxxx
>
>
>
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