Discussion in 'Trading' started by metatrader54, Dec 4, 2019.
What do you guys do/recommend?
Short term happiness or long term benefits?
Do you need the money? If so, withdrawal. Otherwise, let it grow.
Even if you don't need the money, it's good to have diversification. If your entire net worth is in your trading account, that's probably okay if your net worth is $10K, but less okay if your net worth is $10 million. At some point between those two points you should have been withdrawing, and putting the money into other things.
To answer your question I fix the notional capital at risk in my trading account at a maximum of $400K (less if I'm in a drawdown). The account normally has a bit more than that in it, but if the balance gets too big then I withdraw some and add it to my long only investments (I don't need the trading profits for income). That's effectively a 100% withdrawal of profits, though in occasional lumps rather than in a very systematic way.
If I was still building my wealth and didn't need the trading profits for income, I'd probably do something like withdraw half my profits and leave the rest in.
If you do not need money for income to pay bills, support your living expenses or whatever...let it grow but pay yourself a small salary even if you do not need it and do not trade with your profits until the capital becomes substantial via whatever that may be to you.
This will allow you to trail yourself psychologically to treat your trading as a business while still growing it.
Depends on your age. My 80 year old parents have bonds and dividend stocks where they use the monthly income for their living expenses. But if you are a younger person in your wealth accumulation stage, why not use the power of compounding in your favor? Let your day job pay for the day to day expenses.
lol the title made it sound like peeps are making money hand over fist in the trading account... for 95% of people it's more like 'how often do you deposit more money to answer margin calls'...
Limit myself to monthly lol
I'll be withdrawing all profits when account is at the size required, 50% for me, 50% for rainy day fund until thats enough, then 100% for me.
Not there yet but close, been close for a few years, hopefully closer.
If you got bills to withdraw, no bills let it gro.
If it start's decreasing faster than it's growing, and you're 37, so what kind of short-term-happiness there will be at 47, if not a symbol of 0 ?
(i should have started, with the question, is it decreasing faster than it's growing)
There are tax implications involved in taking cash out and they can hurt quite a bit. The tax man is not nice to traders.
Keep it in there, sell losses at the end of the year, use that cash to fund whatever you want.
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