Comment on Mr Consistent returning incredible returns
commented on
03 Mar 2014, 12:20 AM
@Madan, I have read your post here on full-time/part-time trading and how one should transition too. I have few more questions:
1. When you are trading part time, a good gauge is one being profitable consistently, as you said in that post about one year and returns do not matter. But, can you tell me if account size during that period where you are consistent matters? As account size eventually means the position size, and smaller account/position size will have a different psych viz-a-viz when trading with larger position sizes. I understand it should be the same, but how did you tackle that problem?
2. In one of the books that I was reading few months back, mentioned that when you are trading part time you should not go full time till you start getting the returns as much as you make in a full time job. How much do you subscribe to this? As the writer in his case mentions that when he started full time he started loosing money, but he was making money consistently part time. (In the writers case too, even when he was making as much money as full time job when trading part time, he could not when he started full time. A good trade plan should help, but how do you train yourself). Now, this is linked to the first question, if returns does not matter when trading part time, if going full time shouldn’t one know how much return he/she can make, if he/she can eventually live out of it (There is passion which drives, but as you said there is a thin line between passion and addiction :D) and eventually can sustain on trading.
3. How was your transition, you do not have to give exact figures, but as an example, what did you do, you were profitable when you moved from part time to full time (I know it cannot be replicated to me, but just trying to understand what you went through). Was it easy immediately or there were hiccups and how you handled them? If you were breaking your trading rules/plans what you did to come back on track?
4. It would be great if you could elaborate on how you transitioned from part time to full time in terms of position sizing and profitability as well, how was your experience.
5. Another article/trader said that you should’ve a back up plan or some passive income when you transition from part time to full time, do you subscribe to this? Did you think about it when you transitioned?
Cheers!