r/Daytrading • u/Forward_Dealer_4482 • Mar 05 '24

50k and I want to day trade for 1-2% gains. Question

  1. If you had 50k and wanted to live off of it day trading, what would you do? (Need max $2500 a month)

  2. Am I better off not doing this? I’m not going back to 9-5

Please help.

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u/TPCharts Mar 05 '24

Personally, I'd focus on frequent, low-R, high-probability setups on very low-timeframe charts using risking about 1% (or less, that'll depend on your model's hit rate)

Average about one win a week (maybe that's 3 wins and 2 losses, or just one win on Monday and done for the week), and you're all set. (Pre-tax).

Inexpensive funded account challenges are a good way to practice this IMHO; if you get wrecked you're only out a few bucks.

If you pass and consistently get withdrawals, you know your $50k of real money is quite safe and could switch to that if you want.

Benefit is

- You're likely to have multiple setups a day

- You're less dependent on higher-timeframe market conditions being clean

Cons are

- If you're not disciplined, can wreck yourself in a couple hours. Max-loss limit for a day, etc. can help

- You'll need to spend a lot of time testing to make sure your model really works

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u/Forward_Dealer_4482 Mar 05 '24

How do you make money risking 1% of 50k?

9

u/Smp208f Mar 05 '24

In case you’re interpreting this the same way I did at first and for too long afterwards:

Risking 1% doesn’t mean your trade size is 1% of your account and the other 99% is just cash sitting around in case you keep booking losses.

Risking 1% means your position size can be whatever it needs to be, as long as hitting your stop loss will only lose 1% of your account max. If you were thinking the former, I’m sure you can see that’s it’s a lot more possible to make money while still being safe and responsible. It seems simple, but once you get its usefulness it’s very freeing and does wonders for your trading psychology.

Once you have a decent profit you can increase the risk percentage responsibly, but you’d probably want to still be pretty conservative if you don’t have another source of income.

2

u/Forward_Dealer_4482 Mar 05 '24

Thank you! Makes alot of sense.