Quote from: hd49728 on Today at 11:54:09 AM

Quote from: SOKO-DEKE on Today at 11:39:41 AM

Honestly, making trading your only source of income is not a good idea, and it is very hard to find someone who can solidly rely on trading for survival.

Diversify your income resource is good because it helps you to avoid terrible time when you can not have any income at all. When one income resource is bad, you can have one or two other income resources for using.

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Many of these rich traders that we see and hear about on social media already have different sources of income but there just just talk about it.

Rich or poor traders, can say many convincing things but if they don't show proof of trades or share market signals, predictions that become accurate later in actual market, you can not trust their words of self-claiming as good traders.

"In God we trust, all others must bring data" is what you should do in life, to verify things, not automatically trust anything.

I agree with your overall point that many times folks are bragging about how much they make on certain trades and blah blah blah.. so there can be ways to make a lot of money on the way up and also on the way down, yet one of the difficulties is being consistent.

Personally I doubt that there are absolute rules, yet there could be folks who have various sources of income, or even some of the sources of income can be the way that they set up their various income pieces, so if there is enough capital to cover living expenses, then the remainder of the capital can be used for trading or whatever, and there is no worry about having enough for living expenses... Let's say living expenses are in the ballpark of $80k per year or $6,666 per month, then under traditional withdrawal theories, then there would be a need to have at least $2 million in capital and then to draw 4% per year from that.

Personally I am of the opinion that in bitcoin you can draw 10% per year as long as you are valuating in accordance with the 200-WMA, so you could have in the ballpark of 21.1 BTC and withdraw in the ballpark of $6,666 per month so long as the BTC price stays at least 25% above the 200-WMA, which would mean that the BTC price would have to stay above $47,500 since the 200-WMA is just below $38k, and yeah if the BTC price goes below 25% above the 200-WMA, then it would be better to reduce withdrawal amounts in accordance some kind of a schedule as is mentioned in the link site.

The main point that I am making is that income can come from investments and choices in regards to how necessary diversification is needed are not absolutely settled, since there might not be much need to diversify beyond bitcoin and cash.. so that perhaps during good periods, there could be 1-2 years worth of living expenses held in cash or various cash equivalents that are likely not going to be correlated with BTC price moves.

At the same time, I agree with the overall point that if there is not a lot of capital then there likely is a need for some kind of a cashflow to cover living expenses at minimum, and then the extent to which various trading strategies are profitable still may well take a whole hell of a lot of time to build from their lower levels to high enough levels that the capital contained therein would be enough to start to draw upon in order to pay for living expenses and without taking away from ongoing needs for trading capital... so yeah, if there is money that is taken out of the trading capital from time to time for living expenses, then somehow that trading capital still needs to be maintained to a high enough level that it is still able to generate profits whether various prices are going up or down, in the event that the trader has figured out systems in which he is able to make money in either direction. but if the prices are not moving at all then the trader might not be making any money.. so I would not even be suggesting that setting up such supposedly always profitable systems is easy and does not necessarily work so well in all market conditions... and frequently traders who are proclaiming that they are profitable in all conditions, they are failing/refusing to actually give details in which it is quite likely that they are not sufficiently/adequately separating out their working capital and their living expenses and also making sure that their withdrawals are within reasonable bounds in which they are keeping their various kinds of funds separated in sufficiently ways that do not overly place risk on what might be their living expenses funds.

I think that one of the main mistakes that traders will make in accounting for their funds is to consider a living expenses fund to be completely drawable when likely instead the living expenses fund should be sustainable in itself, so my above example of a $6,666 per month income of at least 800k (21.1 BTC) in the case of bitcoin with a 10% withdrawal rate with the caveats described above, and at least $2 million in the case of traditional funds with a 4% withdrawal rate with the idea that the funds are gaining in value at least 4% per year.