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Ten-thousand in Education and still not profitable!

  #311 (permalink)

Victoria, TX
 
Trading Experience: Master
Platform: NinjaTrader
Broker/Data: Mirus Futrues, Zen-Fire, IQFeed, Kinetick
Favorite Futures: 6E, CL, GC
 
rogerf's Avatar
 
Posts: 132 since Apr 2010


phantomtrader View Post
Well a couple of thoughts here. You mentioned stress - traders have to get used to stress - it's part of the business. What you have to learn is how to control your stress while acknowledging that it's always there. My level of stress goes up as soon as I pull the trigger. All the possibilities of a trade outcome are running through my head. Everyone wants to be right, but acknowledging that you can be wrong is stressful, but very necessary.

About sim, I think it's great to get used to the markets and test strategies. But psychologically, a trader must get used to the real thing, stress and all. I've had a few people who I've helped along the way who have said "I can do it in sim, but I always pick the wrong trade when live". Well, if that's the case, then dump the sim and get on with real life and learn how to manage the real world of trading.

What I've done with a few people is tell them to open an account for $2,500. I give them a simple setup, a few rules to follow and trade 1 contract for 1 point, one trade a day max, 1 point stop, every day picking out the best opportunity to execute that setup. That's it. No scaling, no rocket science. After a few weeks or a month, run your statistics and see how you did. Did you follow the rules? Did you pick a good execution point? What could you have done better? Not a lot of risk here. Just a real time learning experience. If someone blows their account after a few months doing this and can't follow the rules of a simple setup, then they should probably look for another career. Depending on market conditions, they may make a few bucks or they might come out slightly negative - but that's okay, as long as they followed the rules.

You have a good idea about a mentor's thread - accumulate some helpful stuff for traders, new and old, because it will benefit everyone, myself included.

If we're speaking in generalities, this is all pretty good stuff. It was pointed out that not everyone is cut out to be a trader. Passion has a lot to do with it but many are so far behind the required level of patience and discipline that their odds of making it are practically nill...especially without considerable mentoring.

I believe a fair amount of sim trading is manditory. Trading is a skill and no skill is ever mastered without practice. In trading, practicing to hone your mechanical skills in live account trading is insanity. With a good trading system, market knowledge and the mastery of the mechanics, most traders can be taught to do well on practically any day they choose - in simulation. When they switch to trading "live", the wheels fly off. Why?

All the simulation in the world will not replicate true trading stress (emotions). A few traders are able to make the transition from sim to live and do ok. But they are such a small number that we must postulate that, as a general rule, ALL traders will blow up their first account. The psychological stresses will be so great and their defenses so weak that they will be virtually powerless to combat the urge to bend, twist, bust, mangle and break their rules. Everything they know works goes out the window. At the end of the day, after reviewing their "performance", the sickening feeling of despair and disbelief sets in and they hate themselves. But overcoming those mental monsters is another topic.

We can take a simple poll here to find out how many futures.io (formerly BMT) traders made a successful transition and never nuked their first account. If honest, I venture to say "not many". So, if we accept the postulate as overwhelmingly true, then the question is, "How much money do you want to lose?" $2500? $20,000? $100,000? You get to choose. Think of it as your "tuition" in Trading 101 to learn that "cowboying" trades doesn't work and, to succeed, you must settle down and start mastering yourself. If you give in to your emotions and break your rules even one time, you cannot call yourself a disciplined trader. Without total discipline there cannot be lasting success.

It has always puzzled me how traders will invest so much time and money in learning systems, but put virtually nothing into learning themselves.

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