I read this forum from several months, everytime finding out new interesting ideas and usefull codes.
I'm Mario and I'm from Italy, I'll try to write in your language doing less mistakes as possible.
I began to follow the financial market in 1999 and I never stoped to do it.
The markets i studied and i trade are the futures on the main american indexs.
Thanks for the reply mf, it is interesting since the book I am going through right now is one of the 2 books pictured in your signature ... Markets in Profiles ! Yes, some swing trade should make sense for me to restart with, thank for the coal tip. But I am still searching for the best timeframe that fit me, I like to be active for 2 to 4 hours and being done after ... All position closed ... But I want to finish studying Markets in Profiles, maybe at some point in the book a timeframe will attract me.
As for the stocks vs futures for day trading I think it is just a little bit of fear of not knowing a lot about futures that makes me stick to stocks, never really exposed to futures actually. In my mind they are all charts, I am debating the advantage of futures vs QQQ or SPY or ORCL of MSFT for example. Are futures charts more stable, more easy to predict, or follow ?
Jim Dlaton books are great for CONTEXT and have practically zero value for execution ( IMHO). A quote from Jim Dalton " I am not a market profile trader". I heard this from Jim dalton during a Q&A session in a webinar after i had invested 6 months of intense time in Market Profile. This does not mean my study was a waste. It took me a while to understand Jim's point. He has many, many excellent webinars also availabe over the net. I listened to them again and again whenever i get time. For exeution- read Mark Fisher book " The logical trader".
My premise is that futures are easier to trade. There are many , many reasons for it. I trade Russell, NQ and commodities. Stay away from SPY.
Futures VS Stocks. Let me give you an example. I know some traders who are properiteary traders at SMB capital- one of the very fine firms. They all day trade stocks. Per Mike Bellafiore ( one of the partners at SMB), the firm interviews every year 100's of traders for her prop desk. They been doing this for over 15+ years. So, they have this selection process to a science. What are the results?
Each year if 10 are selected for 9 months training program- ONLY 2-4 are left by the time training is finished and LIVE trading has been under way and the numbers even go down further after a trader has been trading LIVE for a year.
This does not mean if these traders were trading futures, their success rate willbe higher. The point is to present what's out there. After all said and done- an equity trader has $1 million trading line ( typically successful traders get after 1 year) and considered very successful if they clear $ 1,000 to 1500/day.
A future trader can blow these figures out of the water with $1 million trading account.
There are many journals at futures.io (formerly BMT)- follow them and see if it makes sense. Regardless of whether one is trading futures or individual stocks- keep daily market internals FRONT and CENTER. I did not see these mentioned in your trading plan.
See attached chart.
and for Mark Fisher method, i present INTC chart with today market internals. Strong stock plus +market internals- go long. Some stocks make strong intra day moves even without +ve internals but i like when they line up.
Last edited by mfbreakout; August 21st, 2014 at 07:47 PM.
To many of you, I guess itís not a surprise that I blew up my account twice already, even Big Mike starts with this in his introduction. But how did I do this? I try to take my story short, and Iíd really appreciate any comments or advice, except one, that trading is not for me. I want to do this.
I thought it would be at least a couple of years to learn this profession, so I worked a lot to save. Then started my first paid course: basic candle charts, patterns. I started to trade stocks at the end of 2010. I used basic candle patterns as triggers, I used stop loss, mostly I closed a month with a loss.
So okay, letís do it big, where I can make serious money to cover my losses Ė at least I thought Ė IPOs. Needless to say I began to lose serious money, off goes my first account. The market taught me my first lesson: I shouldní think I know the direction, I should follow strict rules, and be disciplined.
I started to interest in options, so that was my second paid course. Since I won and lost trying to tell the direction, I tried directionless strategies: short strangles, mainly on SPY and USO. The problem was it was really small money I could make, and hedging with the basic product was too expensive for my account.
I felt something about this, so I paid my third course, specifically on directionless strategies on futures. I sold with 0.10 delta, and try to alter my CL and ZW positions when they came against me. I blewed my second account.
Somehow I found the market auction theory, so right now Iím papertrading just on CL, perhaps the concentration on one thing helps.
What did I achieve until now:
- I know that only I am responsible for my trades
- I donít look for the Holy Grail, or want to buy the Ąsure systemĒ in trading, knowing it doesnít exist
- I donít want to get rich quick, I need a steady income, with my shrinked account that should be around a yearly 40%.
- Nobody knows the sure direction of the market, so I should not trade according to analystsí opinions, or news Ė when it should go one way, it can go opposite as well
- I can accept that losing is part of the game
Unfortunately I donít know any successful trader personally. Of course, places where I paid to learn, everybody claimed to be succesful, even ĄprovingĒ it with great looking P&L charts, with steady up, 10-20 % drawbacks.
My main problem is Iím starting to lose faith, mainly because I learned that itís not the market, who punishes me, itís my fault that I didnít make a profit. Maybe itís the increasing pressure: I have a family to take care of, my savings are running low, and I donít have any other income.
My questions are for the community:
- Is there anybody here who tried to make a living from trading more than 4 years with a great loss? What helped to be successful?
- Is there anybody here who can make yearly a steady 30-40%? (that would make a living for me, with 50% Iíd be more than happy.)
Follow couple of journals at futures.io (formerly BMT) who trade futures and see if any approach makes sense to you.
" 30-40% steady annual return" ? that's a mark of traders who are top of their game. It can be done and is being done by traders but a very , very small percentage of trading population based on various studies.
After a method /trading approach is finalized having a proper amount of trading capital and trading with no leverage is the key. This is an area of major problem. Traders trying to make a living trading full time on a shoe string. 30% on a $200,000 trading account is $60,000 Gross. After one accounts for commission etc, one can take off 6-8% from this gross. How can anyone make a living on 30K, 60K etc trading account is beyond me. Of course brokers, traders with dreams in their eye etc. will give you pie in the sky story all day long. Couple of months ago, i was talking to a broker who has been in the industry for 30+ years. According to him he has several traders who make 6 figure income on $200k account etc This is after paying about $200,000 in comission. I said this does not make sense. His answer " What difference does it make if one is making 6 figure income?". That's all i needed to know to stay clear. Everyone will tell you to blame yourselve , take responsibility, be discipline etc. These are common sense things. They miss one part. Staying power and not using tight stop loss. But how can one have a wide stop loss when ones account has no staying power. I use 100-150 ticks stop loss for day trading CL. Most of the traders can never and will never wrap their head around this concept and will keep dreaming. It took me ONLY 4 years to realize this even though some traders have been telling me about this for years.
In this discussion assumption is implicit that one has a good basic trading method. Any method. It does not matter. Whatever appelas to a trader is a good method and there are many.
If you happen to find a trader who is doing it on a $10K etc account, just move in with them and learn everything from that trader. I have not found one and i never looked for one. Even though there are many who claims that they have done it and are doing it and are happy to lend you on that path for $99/month ( i have seen as high a s$500/month) fee for their trading room service.
Last edited by mfbreakout; August 22nd, 2014 at 07:08 AM.
Following is a recent post from Brett talking about study as to what % of traders make money on a consistent basis trading full time. I first read this post 4 years ago and decided to ignore it and paid heavy price.
One name lot of experienced trader respect is Dr. Brett Steenbarger. Everyone should follow his blog
For all new traders and experience ones here is a summary of recent post by Brett.
" I strongly recommend reading the research study of speculator skill from Barber, Lee, Liu, and Odean. They studied the returns of daytraders over a 15-year period, the largest sample I am aware of in such a study. Their study is also unique in that it looks at the ability of traders to make money in a second year after having made money in the first.
The authors conclude that "there is clear performance persistence." The very top traders who make money net of fees tend to continue to make money going forward. The traders who lose money tend to continue losing money.
Here is the most important conclusion, however:
"In the average year, 360,000 individuals engage in day trading. While about 13% earn profits net of fees in the typical year, the results of our analysis suggest that less than 1% of day traders (less than 1,000 out of 360,000) are able to outperform consistently." (p. 15).
In other words, 87% of day traders in a given year lose money after fees are taken into account. About .28%--one in 360--is able to make money after fees year over year.
To be sure, that small group of very successful day traders earns a significant return. After expenses, they average +28 bps per day. Compare that to the 350,000 out of 360,000 daytraders who average a daily loss of 5.7 bps per day after expenses.
The authors conclude that day trading skill genuinely exists. They also conclude that it is very, very rare. "
I happen to believe that i do not want to give my self pass/fail grade based off my ability to pick them within 10-20 ticks stop loss while trading on a shoe string trading capital.
If it was possible ( there are always exceptions) to make a living trading full time with 20,50 K etc trading account, i wonder why does top of the line prop firms start out their traders at prop firm with $1 million trading capital. The bar is very high for traders who get this line of credit. But these firms do not spend considerable resources to hire, train traders for the firm and say here is $50K - you got a solid method and GO.
Last edited by mfbreakout; August 22nd, 2014 at 07:15 AM.
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Thanks, mf! I heard about these statistic myself, but one can try to be in the 1%
I also heard the first couple of years' losers exit the trading market, so it always should be filled with novices, who lose because of being novices.
According to your observations, how much is a "typical" yearly income %? How long did it take to you to become successful? If you lost in the beginning, what helped to turn profitable?
mfbreakout, I may not have as much experience posting on this forum, but I generally try to refrain from presenting my own opinion/beliefs as facts. There are other ways to trade apart from yours (which, to be honest, doesn't make sense to me). So considering what Zolt was actually asking about, there is no need to discuss your limited personal experience as it has no relevance. Anyone can do the numbers for return and capital required.
The returns you want to make from trading (especially steady) are only possible after the fact. What I mean is, they are achievable, but you definitely cannot plan for them. People who trade for living always prepare for worse. No-one knows if next month or even year will be profitable. I'm sure you've heard this before, the only thing you can focus on and control is your process.
I don't have doubts you can make it in trading, unfortunately no-one can tell you when. Your goal of supporting family while not being profitable at the moment, makes things much more difficult. It's up to you to decide if you want to expose your family to that kind of risk. While you may think risk is calculated, you need to consider what your worst case is. If you don't mind going through your savings and still not making money trading, and you can easily find a job that will pay enough then, maybe, you just need to keep pushing and learning from your own experience.
I don't know how long your savings can last or how big your trading capital is, but there may be one more thing for you to consider. You could use your capital to increase your cushion and try to get funded by a firm. It will give you more piece of mind and, even though there is a profit split, the size of capital a firm can provide will not require you to make 30% yearly to make a living. As always, think for yourself.
Last edited by isla; August 22nd, 2014 at 07:40 AM.
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Slightly profitable after 3 years but desire to control stop lossess and looking at small time frame like 1 minute etc. kept the progress not worth mentioning. Increased the profitabilty by 100% after i finally decided to lift the lid froom stop loss, stop trading with FEAR and start trading while haning FUN. I started using wide stop loss about 7 months ago after 5 years of SONG and DANCE.
I lost lot of money.
Last edited by mfbreakout; August 22nd, 2014 at 08:38 AM.
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" There are other ways to trade apart from yours (which, to be honest, doesn't make sense to me). "
Where did i said that trade the way , i do and use stop loss i like do? I just share my experience starting from 10 ticks trader to present.
However, points you make are valid. As far my trading does not make sense - that's what makes the market. Hi, Mark Fisher, the developer of ACD method and a legend in trading world could make sense of his method to about 400 traders out of couple of thousands he taught at his firm, trading seminars etc.
That's why i always say, any method is good as long it suits a trader personality.
Last edited by mfbreakout; August 22nd, 2014 at 08:31 AM.
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