The most important variable may actually be the one outside the trading account: how dependent you are on monthly P&L to pay living expenses. Once rent depends on the next few trades, the exact same strategy becomes psychologically different. I’d personally size much below 5% account risk per trade, the first objective of going full-time should be reducing risk of ruin, not maximizing the speed of compounding.
Oh yeah. Spot on. For me, when I discovered the risk of ruin, it was kind of an “aha moment.” Then the next step was to reduce it to below 0.5%. At first, I thought a 1–3% risk of ruin was enough to keep me from blowups. (it was not :)
Good article because it looks at trading as a real life calculation, not just a return target.
If you want to trade full-time, you need more than trading capital. Health insurance, taxes, retirement savings, education, holidays and the missing employer contributions all belong in the calculation.
20% per year is a strong return. But it is still an average. Some years will be lower, some may be negative, and your life still needs funding during those years.
That is why simulations like this are useful. They take the topic out of wishful thinking.
Awesome job laying this out. There are SO MANY factors beyond account size that play into making that leap. Not there myself yet, but I've got the steps and the plan in place and like you mention, lowering expenses and having another income source are easily the two biggest things you can do to speed up the timeline
Thanks, Austin, for your comment. I think you’re already doing an awesome job, being up 83.55% year-to-date isn’t easy at all, especially in a year that’s been much more difficult than 2025 and 2024, in my opinion. I might even go so far as to say it’s similar to 2022 (a bear market year) for those trading high-beta growth stocks. I can’t wait to see when you take the plunge, and I’ll be following your Substack.
Another point people don’t realize is yea maybe you can replace your income but now you got extra expenses like paying insurance out of pocket or whatever else. Your living costs generally go up as any kind of entrepreneur assuming you have a decent job you are replacing
The most important variable may actually be the one outside the trading account: how dependent you are on monthly P&L to pay living expenses. Once rent depends on the next few trades, the exact same strategy becomes psychologically different. I’d personally size much below 5% account risk per trade, the first objective of going full-time should be reducing risk of ruin, not maximizing the speed of compounding.
Oh yeah. Spot on. For me, when I discovered the risk of ruin, it was kind of an “aha moment.” Then the next step was to reduce it to below 0.5%. At first, I thought a 1–3% risk of ruin was enough to keep me from blowups. (it was not :)
Good article because it looks at trading as a real life calculation, not just a return target.
If you want to trade full-time, you need more than trading capital. Health insurance, taxes, retirement savings, education, holidays and the missing employer contributions all belong in the calculation.
20% per year is a strong return. But it is still an average. Some years will be lower, some may be negative, and your life still needs funding during those years.
That is why simulations like this are useful. They take the topic out of wishful thinking.
Thank you so much, Sabine, for this restack and your message. I really appreciate it.
Awesome job laying this out. There are SO MANY factors beyond account size that play into making that leap. Not there myself yet, but I've got the steps and the plan in place and like you mention, lowering expenses and having another income source are easily the two biggest things you can do to speed up the timeline
Thanks, Austin, for your comment. I think you’re already doing an awesome job, being up 83.55% year-to-date isn’t easy at all, especially in a year that’s been much more difficult than 2025 and 2024, in my opinion. I might even go so far as to say it’s similar to 2022 (a bear market year) for those trading high-beta growth stocks. I can’t wait to see when you take the plunge, and I’ll be following your Substack.
Another point people don’t realize is yea maybe you can replace your income but now you got extra expenses like paying insurance out of pocket or whatever else. Your living costs generally go up as any kind of entrepreneur assuming you have a decent job you are replacing
Yes. And don't even get me started on the mental pressure when something unexpected comes up that you haven't budgeted for. it’s difficult.
Hi sir.
May I ask you a few things if you don't mind?
1) since how many years you have been trading? Since when your out performance began?
2) since the last 5 years what has been your highest drawdown?
3) what is your cagr for the last 5 years?