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Primary source of income: how many have made it?


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Primary source of income: how many have made it?

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  #101 (permalink)
 mahlonhersh 
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Private Banker View Post
Regarding the 95% failure question, there's no way to accurately assess this but my guess is that many newer traders are constantly changing their trading strategies and indicators. This creates inconsistency and conflicting views in what they're trying to accomplish. They then become confused and frustrated which in turn removes any confidence they may have had. They are unable to internalize why their trades are going wrong because they've switched around so much. This inevitably leads to failure if not addressed immediately.

The path to success is indeed different for each successful trader. But there are a few key things that consistently occur in my opinion.

- They've taken the time to educate themselves through reading, coaching, screen time, etc.
- They have a specific strategy they employ on each trade
- They have a favorable risk to reward ratio (sound money management)
- They trade the market that is most appropriate to their account size
- They have confidence in their system and do not change their charts/indicators over and over again

So to answer your original question regarding trading live vs. SIM, once you feel you've accomplished these basic steps and are truly confident in your strategy which includes the appropriate market, begin to test the water. Start small and build your confidence in "live mode". If your confidence starts to falter, go back to SIM and trade until you feel better about what you're doing.

Excellent post. If futures.io (formerly BMT) had a post of the month award, I would nominate this one.

Thank you for sharing. I hope you will continue to share more valuable gems.

Mahlon

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  #102 (permalink)
 Private Banker 
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mahlonhersh View Post
Excellent post. If futures.io (formerly BMT) had a post of the month award, I would nominate this one.

Thank you for sharing. I hope you will continue to share more valuable gems.

Mahlon

Wow! Thank you Mahlon! I'm always happy to help!

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  #103 (permalink)
 tigertrader 
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Obviously, good trade/risk management, sufficient capitalization, discipline, and trading knowledge, skills and techniques combined with sufficient "deliberate practice", along with the proper frame of mind, is required if a trader is going to be successful.

A good trader will have the requisite confidence in his trading when he is executing correctly, regardless if he is making money or not. As far as the end game is concerned, we all have to make money consistently, if this is how we are going to support ourselves. But, as "Private Banker" alluded to, making money is the last thing you should be concerned with or thinking about, when you start trading. If you take the time to learn how to trade correctly, have pride in how your are are doing it, and have the patience and the drive to be focused while doing it, making money will take care of itself.

The most important trait that all successful traders share, is the belief that making money is secondary to trading well. It’s an attitude that is defined by a certain pride and confidence in how well they trade, and in the belief that they will make money, if they trade well. In the final analysis, trading performance may be measured by how much money is made, but is not defined by it.

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  #104 (permalink)
 cory 
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Private Banker View Post
....
The path to success is indeed different for each successful trader. But there are a few key things that consistently occur in my opinion.

a different take

- They've taken the time to educate themselves through reading, coaching, screen time, etc.
no reading, just coaching, screen time and tons of notes.

- They have a specific strategy they employ on each trade
each trade is entered on the same setup

- They have a favorable risk to reward ratio (sound money management)
n/a

- They trade the market that is most appropriate to their account size
look for market that moves well and stick with it

- They have confidence in their system and do not change their charts/indicators over and over again
yes and yes

...

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  #105 (permalink)
 tigertrader 
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cory View Post
a different take

- They've taken the time to educate themselves through reading, coaching, screen time, etc.
no reading, just coaching, screen time and tons of notes.

- They have a specific strategy they employ on each trade
each trade is entered on the same setup

- They have a favorable risk to reward ratio (sound money management)
n/a

- They trade the market that is most appropriate to their account size
look for market that moves well and stick with it

- They have confidence in their system and do not change their charts/indicators over and over again
yes and yes

...

Yes, but what separates the good traders from the great traders. What separates Tiger Woods from all the other golfers, and what separated Michael Jordan from all the others?

It's something intangible...

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  #106 (permalink)
 cory 
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tigertrader View Post
Yes, but what separates the good traders from the great traders. What separates Tiger Woods from all the other golfers, and what separated Michael Jordan from all the others?

It's something intangible...

then the title should be who makes it big time.

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  #107 (permalink)
 ZTR 
 
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tigertrader View Post
Yes, but what separates the good traders from the great traders. What separates Tiger Woods from all the other golfers, and what separated Michael Jordan from all the others?

It's something intangible...

Maybe...

Or it is practice.

Watch Pardon the Interruption. PTI was a strong proponent of Woods resuming his practice. Saying that Tiger Woods was bad until he got the distractions from his divorce out of the way & resumed his rigerous practice.





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  #108 (permalink)
 tigertrader 
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cory View Post
then the title should be who makes it big time.

You're missing the point. Nothing in life is black and white, more like shades of gray.

You can take a large sample of traders, who all follow the same parameters for trading success, and you may or may not get the distribution curve you would normally expect.


My point, is there is a very important intangible factor in all performance based activities, that is also intrinsic to successful traders. Woods and Jordan have it in spades...no pun intended!

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  #109 (permalink)
 mahlonhersh 
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cory View Post
- They have a favorable risk to reward ratio (sound money management)
n/a
...


How long can you expect to be a successful trader without sound money management?

Mahlon

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  #110 (permalink)
 cory 
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mahlonhersh View Post
How long can you expect to be a successful trader without sound money management?

Mahlon

as I pre-qualify with 'everybody is different' statement in this case the trader has never ever concerned with mm all she cares is money in her pocket and since it has been 2 years running I dont expect any attn to mm going forward.

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  #111 (permalink)
 Zen Trader 
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tigertrader View Post
Yes, but what separates the good traders from the great traders. What separates Tiger Woods from all the other golfers, and what separated Michael Jordan from all the others?

It's something intangible...

What separates Tiger Woods from other golfers is Earl Woods. His father started training him before he could even speak. He was playing by the time he was two years old and he probably had more exposure to the game by the time he was 25 years old than most people have in a lifetime. Not to discount any natural ability he has, but would he have been the same golfer without his old man's guidance?

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  #112 (permalink)
 tigertrader 
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Zen Trader View Post
What separates Tiger Woods from other golfers is Earl Woods. His father started training him before he could even speak. He was playing by the time he was two years old and he probably had more exposure to the game by the time he was 25 years old than most people have in a lifetime. Not to discount any natural ability he has, but would he have been the same golfer without his old man's guidance?

O.K. let me put it this way. You have this large sample of traders, and they all have the same skill-set. Good trade/risk management, discipline, knowledge about trading and trading techniques. They are all adequately and equally capitalized, have been trading the same amount of time and have been mentored by the same individual. Are they all going to enjoy the same amount of success, or is there going to be something resembling a normal or Gaussian distribution, with the immensely successful traders a couple standard deviations one way, the blow-outs a couple standard deviations the other way, and the bulk of traders at the mean?

I stood in the bond pit for 25 years with about 700 other traders, and saw literally thousands of traders come and go over that time period. I've been around traders every day of my life for close to 40 years, and I can tell you there is an amazing disparity in P&Ls, between the really successful traders and the merely successful traders. So what is it, that makes one trader more successful than another, all things being relatively equal?

Quite simply, it's a mental edge. Its part confidence, part pride, part drive, but make no mistake, I never met a really good trader that didn't possess these qualities.



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  #113 (permalink)
 Zen Trader 
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tigertrader View Post
O.K. let me put it this way. You have this large sample of traders, and they all have the same skill-set. Good trade/risk management, discipline, knowledge about trading and trading techniques. They are all adequately and equally capitalized, have been trading the same amount of time and have been mentored by the same individual. Are they all going to enjoy the same amount of success, or is there going to be something resembling a normal or Gaussian distribution, with the immensely successful traders a couple standard deviations one way, the blow-outs a couple standard deviations the other way, and the bulk of traders at the mean?

I stood in the bond pit for 25 years with about 700 other traders, and saw literally thousands of traders come and go over that time period. I've been around traders every day of my life for close to 40 years, and I can tell you there is an amazing disparity in P&Ls, between the really successful traders and the merely successful traders. So what is it, that makes one trader more successful than another, all things being relatively equal?

Quite simply, it's a mental edge. Its part confidence, part pride, part drive, but make no mistake, I never met a really good trader that didn't possess these qualities.



I donít doubt that not everyone can be equally successful and my intention was not to suggest that training was the only factor in becoming the best in oneís chosen field. Just saying thereís a tendency to ascribe something mystical or intangible to people that are the very best performers, when the factors that do make them the very best can actually be quantified and defined.

As you say yourself, the best traders you know all share a certain psychological make-up - they have the commitment, the confidence and the belief in their self-efficacy to succeed. No doubt at some point, they also received the right mentoring when they were still finding their feet in the markets. All that sounds very tangible to me, if not attainable. And while we canít all be the best, I think we can all recognize what qualities make the best the best, strive to be more like them, and hopefully find a measure of success along the way.

Anyway, as a trader whose years of experience can be measured in the single digits, does not have much opportunity to mix with other traders, and is striving for greater consistency, I very much appreciate reading the opinions of people, such as yourself, who have been involved in the markets for decades. I hope you can tell us more about the common qualities you see in great traders. : ) Thanks.

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  #114 (permalink)
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Just because Michael Jordan came up:

YouTube - Michael Jordan 'Maybe It's My Fault' Commercial

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  #115 (permalink)
 Private Banker 
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tigertrader View Post
Yes, but what separates the good traders from the great traders. What separates Tiger Woods from all the other golfers, and what separated Michael Jordan from all the others?

It's something intangible...

I think Tigertrader brings up an interesting point and perhaps an entirely different topic to discuss. I agree with his thoughts on this.

My post was directed towards the trader who is looking to make enough money through trading to live on. My definition of "success" therefore was to be financially independent and "eat what you kill" vs. being employed.

I believe that the term success has different tiers within it. There will be those that are somewhat struggling with their trading but just getting by (barely successful), those who are doing well enough to make a decent living and there are those who absolutely kill it and hit it big time. You could probably break it down more than that as well. But my original thoughts were of encouragement to the newer trader looking to find some synergy in what they are looking to accomplish.

And of course an obvious statement is if you're getting into this business with the thoughts of being the Tiger Woods of trading, just wire the money out of your brokerage account right now and walk away. The is the worst mind set to have. Success like that comes over many many years of getting your butt handed to you.

Here's the thing with a majority of successful independent traders, you'll never know of them. These "successful" traders have a specific routine every day. They make their trades following the predetermined rules and they're done. They don't announce to the world of their success. They don't post the p&l online, etc. They don't give away their edge. They just do their "factory work" every trading day/week/month and are happy to do so and live on with life.

But to the point of what separates the ultra successful traders from the pack is something that comes from a lot of blood, sweat, tears, determination, crazy natural ability and most importantly 100% confidence and belief in themselves through their past experiences in trading and developing a winning edge. These traits can be found in every truly successful person alive. This is something every trader should strive for but it takes a lot to get there.

Going back to the topic of this original thread, you are successful if your primary source of income is from your trading gains and you are living a sustainable/normal lifestyle. Anything on top of that is a bonus...

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  #116 (permalink)
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...many new traders enter this field with high expectations of making big money with a few clicks of a button. They may have beginner's luck but eventually, reality hits hard. You have to learn to trade right before you can start making money consistently.


I have to throw this out there because I have been thinking about it a lot. Just a personal theory.

I would suggest that every new trader has a run of 'beginner's luck' - but it's not so much luck as much as approaching trading with the most objective and care-free state of mind they are going to have for quite some time.

I don't know about everyone else, but I dove into trading, signed up for an account, started looking at charts and went for it. Trading is dreadfully simple. Buy when it looks like things are going up and sell when it looks like they are coming down. I tripled my account in 2 weeks. Pfft. The next week I loss 50% of the account value over the course of two days.

Then the journey began - books, indicators, backtesting, patterns, mental anguish, pulling my hair out, quitting, starting, quitting, etc, etc.. Everyone knows the drill.

The latest iteration has seen me hard at this thing for about 18 months. Someone convinced me to go back to sim trading about 4 months ago. Yes - supposedly 'this-doesn't-count' sim trading.

Surprise.

I was completely taken aback by how emotionally attached I was to the process, to the SIM process: about being told I was wrong, about taking market action personally (the market was out to get me - and only me - yes - while SIM TRADING), about how much fear and greed I still felt. Emotionally overwhelming and exhausting. Amazing.

Only now I can work thru all of this for the monthly cost of data feeds. (And yes, I would recommend paying for data, I tried the free (no monthly fee brokerage account) route and it is just not worth the hassle)

This was without a doubt the best decision I have made in my trading education (along with Mark Douglas and Bankrobber - Ok - and some futures.io (formerly BMT) for good measure =)) I feel like I am finally getting to the place of some objectivity - understanding myself and my tendencies and biases and how to handle them, honest and patient self-critique, identifying, defining, and refining something of an edge. I feel like I am getting back to where I started.

The first three weeks of my trading were probably some of the best trades I will ever put on. I had no idea what to expect and I was willing to part with my initial investment. I try to imagine what would of happened if I would of stumbled across someone that would of recognized, protected, and nurtured that first naive, unexperienced, and untarnished approach. The time, energy, and money that would of been saved. Heh.

For the record, NT lists about +-150 trades a day; as I can't seem to get NT to fill the entire order at one time every time, this probably means about 100 trades a day. Perhaps total number of sim trades is somewhere north of 1000.

And for what it is worth - I do not understand why or how sim trading has had this kind of an impact on me. I was fully persuaded that sim trading was just not enough to prepare for me live trading. I had tried it in short and sporadic sequences, usually less than a day. It didn't seem real enough, and I would quickly give it up. Maybe the attachment came by losing enough real money or with all the energy invested in trying to find the holy grail. Maybe I needed to beat my head against the wall enough times. Heh.

If someone has similar thoughts with respect to sim trading and is struggling with live trading, I would recommend that they commit to sim trading for a month to see how it goes. Be ready to face your inner demons.

As someone told me - 2 years spent sim trading is nothing to invest compared to the potential reward. Look at any other profession - think about what you did before you decided to pick up trading - how much time did you have to spend to gain some level of competency in your prior (current) career? Trading's ROI is mind boggling - infinitely scalable (nearly... well, how can anything be near to infiinity... - ok - its as close as we can get ).

Commit to and put in the time for proper training.

Phew. A little longer and probably more passionate than I intended - but hey - the hardest lessons always make it so.

Cheers

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  #117 (permalink)
 Big Mike 
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  #118 (permalink)
 tderrick 
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In my limited experience live trading, It seems to always boil down to one thing. Your mental strength.

Can you take AND hold on to the trade you've taken a thousand times in practice and know works
most of the time.

The 95 to 5 ratio is undoubtedly correct.

So... It boils down to this. Do YOU believe you are a 5%er? Have you always tried harder than everyone else?

Here is my breakdown....

The first 75% - You mean I'm going to have to study? I need to read books? Man, this is too much like school..
I'm out. I thought this would be easy money...

The next 10% - I will study my brains out and learn it all!! Oh wait, I have no guts... I am not fearless...
I'm out

The Last 10% - I can't seem to find a balance between all the immense knowledge I have gathered over the last couple of years and the simple ability to pull the trigger at the correct point in Price Action.
I am always at break even. This is taking too much of my time.
I'm out


Are you a 5%er?
Have you always felt like a 5%er?
Are you fearless?
Are you smart?
Can you study like you're a Freshman in College looking for a Masters in Trading?
Can you remember every mistake you have ever made?

If so, you have nothing to worry about. You have been ahead of the curve your whole life.


People simply don't realize what they are getting into...


AJ
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  #119 (permalink)
 mmtrader4 
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Thanks Tderrick:

Don't know about actual percentages but the reasons are pretty much true. As I get to speak to many traders, successful and failed here is what I see:

Your first reason 75% - Right on! Unfortunately there is so much garbage on the Internet with promises of quick riches, this group bites on the junk then falls by the wayside rather quickly. I was one of this group! The difference was I had a background in trading stocks, no load mutual funds and options. So while it "seemed to be great" to be on the golf course by 10am, I never truly believed it. Folks, this takes time! And a lot of it!!!

Your next 10% - Right on.

Your third 10% - Correct due to mostly three reasons: A) a flawed system to begin with; B) A system which is good but the rules are NOT explicitly followed which takes discipline. A sound system which makes money over time will continue to do so if you follow the rules (sometimes hard to do but an absolute must); C) inability to pull the trigger due to, as you state "mental strength" which is actually defined as - unemotional trading . . . sometimes very hard to do!

To quote you: "Can you study like you're a Freshman in College looking for a Masters in Trading?" This is what I share with all traders starting out. It never ceases to amaze me (now anyway after many years) how we all accept to become a professional in anything, doctor, lawyer, any professional field; it takes years of study and hard work. Yet because somebody selling a system for $295 says you'll start getting rich in as little as a week when that week doesn't happen it's "oh well I tried". No they have not tried. Again, trading is a profession which takes time, study, money management, focus, discipline.

A sincere good luck in trading to you all!





tderrick View Post
In my limited experience live trading, It seems to always boil down to one thing. Your mental strength.

Can you take AND hold on to the trade you've taken a thousand times in practice and know works
most of the time.

The 95 to 5 ratio is undoubtedly correct.

So... It boils down to this. Do YOU believe you are a 5%er? Have you always tried harder than everyone else?

Here is my breakdown....

The first 75% - You mean I'm going to have to study? I need to read books? Man, this is too much like school..
I'm out. I thought this would be easy money...

The next 10% - I will study my brains out and learn it all!! Oh wait, I have no guts... I am not fearless...
I'm out

The Last 10% - I can't seem to find a balance between all the immense knowledge I have gathered over the last couple of years and the simple ability to pull the trigger at the correct point in Price Action.
I am always at break even. This is taking too much of my time.
I'm out


Are you a 5%er?
Have you always felt like a 5%er?
Are you fearless?
Are you smart?
Can you study like you're a Freshman in College looking for a Masters in Trading?
Can you remember every mistake you have ever made?

If so, you have nothing to worry about. You have been ahead of the curve your whole life.


People simply don't realize what they are getting into...


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  #120 (permalink)
 kylinbyl 
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Is it good to know what stage you are at?

Currently I believe I have gained a wealth of knowledge. But I don't know if I want to be a ER doctor, family practice, surgeon, etc. I have read about price, volume, moving averages, Gann, Fibonacci, HH,LL. I can look at a chart and see it. What I have not determined is am I a positional trader, scalper, swing, etc. The good part is you have to know your goals. First goal is obtain the knowledge. Second goal is to test it practically. Third goal is to learn your psyche. Once those three are met, go live and try it. I am between my second and third goal. I started a journal to see how I do at Fibonacci positional trading. What my tolerance is for good risk to reward. Next week I plan on switching to a scalper setup. Each day documenting how I handled the day. Bad risk to reward. But I want to test my psyche. Then after that test another setup. I will know my limits and at that time be prepared to move to that 5%. But it does require a lot of time. My wife picks on me saying "if you got paid for the amount of research you do, we would be rich". I am not looking to get rich. I am looking for consistent profits. That is where my goals will come together. Knowledge, Style, Mental ability. They all have to mesh. They are not there yet, but soon.

Billy

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  #121 (permalink)
 tderrick 
Nashville, Tennessee
 
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kylinbyl View Post
Is it good to know what stage you are at?

My wife picks on me saying "if you got paid for the amount of research you do, we would be rich". I am not looking to get rich. I am looking for consistent profits.

Billy


My wife has never said that, but I know she has thought it!! lol

I don't think we will ever be able to count the endless hours we will spend in this pursuit...

For me... I can live perfectly fine on $200 / day. Anything after that, I am a wealthy man..

Seems very doable to me!!


AJ
Nashville, Tennessee


"Life On The Edge of SR"
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  #122 (permalink)
 mmtrader4 
Chicago, IL
 
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$200 / day is definitely doable




tderrick View Post
My wife has never said that, but I know she has thought it!! lol

I don't think we will ever be able to count the endless hours we will spend in this pursuit...

For me... I can live perfectly fine on $200 / day. Anything after that, I am a wealthy man..

Seems very doable to me!!


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  #123 (permalink)
 tradersink 
Newfields, NH
 
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Yes
Yes
2 Years over 40K in losses this is year 4 and second year on pace to make more than 100K (Knock on wood)

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  #124 (permalink)
 Snoop 
Toronto, Ontario
 
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$200 per day I spend more than that on average... Living in a low cost of living area is a nice advantage for those that have it.

A few people mentioned - "I don't want to get rich, I just want to be consistent"
Well, it's nice that one isn't greedy but the fact is:
If you are consistent in this business, you will get very wealthy - it's the power of compounding.

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  #125 (permalink)
Day Trading Fool
Southwest US
 
 
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If you are consistent in this business, you will get very wealthy - it's the power of compounding.

Now that is what I like to hear.

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  #126 (permalink)
 MetalTrade 
 
 
Posts: 1,081 since May 2010


Snoop View Post
$200 per day I spend more than that on average... Living in a low cost of living area is a nice advantage for those that have it.

A few people mentioned - "I don't want to get rich, I just want to be consistent"
Well, it's nice that one isn't greedy but the fact is:
If you are consistent in this business, you will get very wealthy - it's the power of compounding.

The problem with most profitable daytraders is that they take out monthly the money to live, so they don't compound. In compounding you will have to increase your size with every month.

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  #127 (permalink)
 LukeGeniol 
Italy (IT)
 
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MetalTrade View Post
The problem with most profitable daytraders is that they take out monthly the money to live, so they don't compound. In compounding you will have to increase your size with every month.

Why take out all money u earned? Just leave there enough money to increasing a little your positions every time.

Take your Pips, go out and Live.
Luke.
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  #128 (permalink)
 MetalTrade 
 
 
Posts: 1,081 since May 2010

Most systems are based this way :

example: You start with $25.000/$50.000 and you try to earn a living of let us say $5000 a month, they take out that 5k to live from and are happy that their account is staying the same. Not a lot of profitable day traders who trade for living use compounding.

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  #129 (permalink)
 Private Banker 
La Jolla, CA
 
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Snoop View Post
$200 per day I spend more than that on average... Living in a low cost of living area is a nice advantage for those that have it.

A few people mentioned - "I don't want to get rich, I just want to be consistent"
Well, it's nice that one isn't greedy but the fact is:
If you are consistent in this business, you will get very wealthy - it's the power of compounding.

Snoop, you're right on with that. Simple math will tell you that over time, the compounding will really add up. Let's say you've become consistent enough to net $200 per day on average with $4,000 per month net on average trading one contract. You withdraw $2,000 of your gains each month and keep the remaining $2,000. Once you've accumulated enough in gains, you add a second contract and your daily average has now doubled.

The trick in this is to figure out the proper amount to take out each month to meet your income needs without stumping your trading capital. Let's say $2,000 per month is all you would need. Well, it's pretty obvious how quickly you could grow your account based on a $200 per day net. The key factor in all of this of course is consistency which would include a sound trading strategy with good money management. Also, there are limitations to how many contracts one can trade relative to the market they are in. You can't just dump 100 cars on TF and expect to get a consistent fill. As your trade size grows, you have to fine tune how you enter and exit into positions relative to the market you are trading, which is another topic in itself.

For those who are just getting started in trading, establishing simple, attainable goals is a great first step to building consistency. You have a trading plan in place and you need to now build confidence. This is where it begins.

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  #130 (permalink)
 Private Banker 
La Jolla, CA
 
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MetalTrade View Post
Most systems are based this way :

example: You start with $25.000/$50.000 and you try to earn a living of let us say $5000 a month, they take out that 5k to live from and are happy that their account is staying the same. Not a lot of profitable day traders who trade for living use compounding.

I'm sure there are a handful that subscribe to this but you're right, you're stuck in a box withdrawing all your gains.

From my experience, there's a few ways to address this. If you're looking to grow your account and your required monthly income is equal to what you are gaining through your trading, you'd better have an alternative source of income to supplement your trading income or have enough savings set aside to supplement your trading income to start. You have to leave some of your gains in your account to accumulate enough for additional contracts. This is the only way you will grow.

For those who withdraw all of their gains, you should have already grown your account to a level where you don't need to keep your gains for further leverage. This is very subjective based on a trader's needs/goals of course. Let's say you're pulling 30 ticks out of CL net on a daily basis trading 10 lots. You would obviously need to be well capitalized in your trading account and your gains are withdrawn for living expenses and passive investments. You're good to go at that point. You've most likely paid your dues and are in a good place now. This doesn't apply to the majority of traders out there however so, being in the "account growth" mode is what most should be doing.

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  #131 (permalink)
 MetalTrade 
 
 
Posts: 1,081 since May 2010

The theory is very nice about compounding (Einstein also liked it) but I saw a theory here that the psychologic maximum level is 40 cars per trade.

40 cars per trade on most futures is ALOT. Even for the CL and the FDAX for example.

I know nobody daytrading in and out markets trading 40 cars per trade.

Big traders (institutions) trade mostly over the counter/swaps, HUGE amounts of money per deal, they don't like the public traded market at all. Most of them stay away from it.

You could trade easely large amounts on the FOREX though, on the major pairs.

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  #132 (permalink)
 Snoop 
Toronto, Ontario
 
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Private Banker View Post
Also, there are limitations to how many contracts one can trade relative to the market they are in. You can't just dump 100 cars on TF and expect to get a consistent fill. As your trade size grows, you have to fine tune how you enter and exit into positions relative to the market you are trading, which is another topic in itself.

It really depends on your method. I'm not a micro scalper as alot of people seem to be. Slippage is much more of a concern for small reward/risk trades - such as scalp trades. I set out from the beginning to learn to trade more profitable setups (3 to 1 reward/risk). I can trade many multiples of what I do now and the slippage would be minimal.



MetalTrade View Post
The theory is very nice about compounding (Einstein also liked it) but I saw a theory here that the psychologic maximum level is 40 cars per trade.
40 cars per trade on most futures is ALOT. Even for the CL and the FDAX for example.
I know nobody daytrading in and out markets trading 40 cars per trade.
Big traders (institutions) trade mostly over the counter/swaps, HUGE amounts of money per deal, they don't like the public traded market at all. Most of them stay away from it.
You could trade easely large amounts on the FOREX though, on the major pairs.

I'm sure someone has a theory but I know it's not true. If you believe it though, it will become reality for you.
I guess it's all in the eye of the beholder: 40 cars ISN'T alot in most markets. But as I said above, if you are a scalper, it's a different story regarding slippage and therefore your ability to execute your system to desired results.

I've traded for both a brokerage and a few funds. Institutions do use futures as well as swaps (and OTC options) - but it depends on the purpose. If you're looking to hedge or take any view in the shorter term, futures are a great product. You get the best price and it's a transparent market. Swaps offer better liquidity at a longer date but you pay the broker a healthy margin. But should you need to get out early, you'll take another hit as there won't be a market for you.

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  #133 (permalink)
 jaikumarm 
Palo Alto, CA
 
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No
No
About 1-2 hours for the first couple of years and 3-5 hours in the last 2-3 years. (damn that's a lot time)

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  #134 (permalink)
ArnieM
Fort Morgan, Colorado, USA
 
 
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1. NO
2. NO
3. Not found that yet

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  #135 (permalink)
 gg80108 
Castle Pines N, CO.
 
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Even in "successful" trading rooms , 95% lose.. Those of u have revisited trading rooms maybe years apart: there are always a new group pigeons..
oh yes there is always so and so isn't in the room anymore and here is why...

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  #136 (permalink)
 cory 
the coin hunter
virginia
 
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MetalTrade View Post
The theory is very nice about compounding (Einstein also liked it) but I saw a theory here that the psychologic maximum level is 40 cars per trade.

40 cars per trade on most futures is ALOT. Even for the CL and the FDAX for example.

I know nobody daytrading in and out markets trading 40 cars per trade.
...

40 seems like a right number

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  #137 (permalink)
Hard 8
Cheyenne, WY
 
 
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95% lose and 100% of those who claim they made it are liars.

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  #138 (permalink)
RiskControlMaster
California, USA
 
 
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cory View Post
40 seems like a right number

20 points in 2 hours is pretty nice move.

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  #139 (permalink)
 dowtrader 
London
 
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1. Yes
2. Not yet
3. About 3000 hours. But in the early days most of that was probably just nervous tick-watching as price went against me.

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  #140 (permalink)
felixtjung
Australia
 
 
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1. No, I don't think it'll ever be. My ideal income will be diversified across other asset e.g. property. Every trader has drawdown. If someone tell you he doesn't has any drawdown, don't walk away, RUN! Because the chance is that guy know nothing about trading. Making primary income from trading meaning you are living with this drawdown. You could perform diversification in trading by:
* Trading different instrument (Stock, Future, Forex) OR
* Trading different strategy under same instrument
and pray there's no correlation problem between those. But, thesedays, "true diversification" is just theorical. You better off do something completely different to minimize correlation effect (say business or property). Every great traders do this. They open hedge fund get salary from it (essentially business), some of them make trading course, etc etc.

2. Not yet. But it'll exceed that "according to the plan" within 2 years or more.

3. As I say, trading never be my "primary income", it'll however become "one of my major income" if you like to put it that way. To make $100k / year, I have "on average" 100% growth per year (with 10% stdev) trading system + 50k account size + full time job (roughly will produce +$3k / month to my account size).

Assuming my system will be underperformed, so: 100% - 3 * stdev = 70% / year.
A simple mathematical equation below can be used to calculated what's the expected time i'll reach at least $100k / year income from trading.

$100k < (50k * (((1 + 70%) ^ x) - 1)) + 3k * ((((1 + 70%) ^ (x-1/12)) - 1) + (((1 + 70%) ^ (x-2/12)) - 1) + (((1 + 70%) ^ (x-3/12)) - 1) + ... + (((1 + 70%) ^ (x - x)) - 1))
(This can be simplified as follow)
100k < 1.7 ^ x (50k) - 50k + 3k * Sum(i = 1, 12 * x, 1.7 ^ (x - i / 12)) - 36k * x
where
x = the number of years needed to satisfy the equation

Equation: income = 1.7 ^ x (50k) - 50k + 3k * Sum(i = 1, 12 * x, 1.7 ^ (x - i / 12)) - 36k * x
Plotting the following equation above will give us:


Therefore, we could see the boundary solution from the picture above. Hence,

x = 1.6 years (roughly)

We now have the approximation in years, in order to answer your question, I have to convert to the number of business days and multiple it to the time that I spent everyday on screen.

Nowadays, I only spent about less than 5 minutes / day. (YES, no more than 5 minutes / day).

so final answer is:

business_days = 52 * 5 = 260 days / year
hours_on_screen_per_day = 5 / 60 = 0.083333 hour / day

hours_on_screen = 1.6 years * 260 days * 0.083333 hour/day = 34.666 hours (When my trading automation is perfect, I don't even need to see the screen everyday. So, I overestimate the number of hours.)

It just seems that the number is soo small compared to 90% of people here. But that's sensible answer don't you think?

You might think I'm a complete nerd! ABSOLUTELY!!! But the message that I'm trying to convey is, trading is all about the "PLAN". Get your trading plan right first, and you'll be just fine. Many people try to shoot to the moon without knowing how they gonna achieve that. In the process, most of them will think, that is impossible.

But if you start doing little by little, without you realising, you'll be there in a blink of eye. One chinese philosopher - Lao tze - once said "Journey of thousand miles away begin with the first step". In above calculation, if I start thinking how do I gonna calculate the precise time for me to get $100k / year from trading, I will be overwhelmed and NEVER finish it. But I did everything little by little, and I finished it, I bet 80% of you will just give up when faced with problem above. Am I spot on?

"Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment." - Buddha
* Do not dwell over past => Forget all the mistake you have made(e.g. if you have blown up several account). It's always a waste of time to think "I wish I didn't do that". Well done! if you blew up your past accounts because the truth is you learned much much more than other people who "never" makes mistake. It happens to me, so I know it. The key is "NEVER GIVE UP".
* Do not dream of the future => Do not procrastinate. Procrastinate will not get you anywhere.
* Concentrate the mind on the present moment => Just put everything what you got to complete the task in front of you. Get rid of them one by one, proceed to the next one and never look back.

Again, my 2 cents.

Edit: Nvm reverted.

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  #141 (permalink)
 mattz   is a Vendor
 
 
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Many here compare between business success and trading success. different animals.
Yes, success in all fields requires determination, drive and the willingness to learn, but the market is not forgiving as the business environment. In fact, I have a theory; Your biggest success characteristic that has drove you to success could be your biggest weakness in the trading world.

Engineers, think in system, a leads to b, always logical, not flexible in the market place.
Sales Guys, great with being persistent, a weakness of stubbornness and impatience in the market.
Accountants, used to procedure, lack the ability to adopt to new situations fast.
I am sure the above professions could become successful, and not trying to insult anyone, but I often thought how skill is not easily translated from one place to another(trading).

Think of Trump. Would he be a good trader with his ego? never. Yet, look at the guy!

For all beginner traders: Greed is relative. wanting 2 points, $200 per day is greed.
Don't think reward when you come to the market place, think of the execution your method.
Think where you want to stop and quit, not what would make you happy.

There is a complete transformation of psychology you need to go through, but I would leave that to others successful traders to share their story.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
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  #142 (permalink)
 dmane 
Sydney NSW Australia
 
Experience: Intermediate
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I've got a friend who works at prominent trading companies in Sydney as a programmer. He says that these companies are jolly friendly places to work in with one problem. The newly retired guy comes in with his $400K payout ready to start his new career as a trader and 8 months later it's all gone. And it happens over and over again. He tells me that after a while some of his co-workers can't take it.
Another guy told me that in the market making companies where he was working, all clients are categorized as winners or losers. The losers are fine for the market making company but what they do with the winners is the company puts on a real trade to make up for what they have to pay to the winners. What percentage are losers? 90%. How many change category? None he said.
That's the bad news but now, the good news. I went on a bit of a campaign to find the winners and actual winners not just the hopeful. It wasn't easy but I did find some and what I saw was that there are guys who make an absolute fortune but from the second they crack it they go as silent as the tomb. Not a word, sometimes their friends don't even know what these guys actually do for a living. So, I'm pretty sure it's not all that bleak.

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  #143 (permalink)
 mmtrader4 
Chicago, IL
 
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It's not that bad. The percentages may be correct, however, I believe the proliferation of garbage systems and hype on the Internet is what has killed accounts. Greed and inexperience is a killer.
I literally have thousands and thousands of hours of screen time. This is not an easy business and it costs money to get an education. . . in losing trades and in genuine educational material and forums like Big Mike's!Do some make it right out of the gate? Yes. But they are few and far between. After three plus years of trading futures (prior I was an options trader) I finally had my first $10K month (not bragging! as to MANY futures traders 10K a month is mere pocket change - believe it. -- It is a fact of patience, a plan, and sweat!!! yet maintaing the plan takes mental discipline for sure) I came in several years ago looking for the golden goose and was I rudely awakened; but I had a passion for this and stuck with it. Now, will I make 10K every month? It would be nice, but no guarantees - however I know now I can be consistent because I "see" the same setups over, and over and over and now am not afraid to trade them.

Good Luck and Happy Trading

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  #144 (permalink)
 swedein 
Jonkoping, Sweden
 
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Hi y'all.
I'm a new member of BM trading forum. I really liked this thread.
I spent some money on loosing trades and gave up trading a few years back. The reason I decided to quit was that I couldn't concentrate on my trading, I had other pretty complicated business to run as well. The trading business I tried to start was doomed to fail from the beginning. It was treated more like a hobby.
Like any business there is risk of loosing everything, I have been successful and then lost everything. Like a trading account. I still have 5 wonderful kids and a beautiful wife.
After rebuilding some funds and simtrading for a while I now feel ready and want to focus on trading alone. I feel pretty comfortable with TF. Trading with the trend, unless there is a big divergence at a confluence area. I'm also interested in developing methods for gap closing.
It's a risk of getting initial high costs when you start your trading business, but that is the initial risk in any business. You need to write down your business plan, but business plans are documents under constant development, so you need to work on it, improve it.
When you get too confident you might get a little bit lazy, this can will increase your costs of trading. When you're not focused, for any reason, you will probably do a bad job and increase the costs as well.
I have the benefit of watching the markets develop during the day and then enter the opening TF at 3.30 pm Swedish time. That gives me time for study, develop and test new ideas until the market opens. I will then trade between 1-2 hours depending on how the market moves.
I think it's like any other business, in many ways. If you want to earn a living from it, you need to live it.
I'm a good trader when I'm in the mood and focused.
I have this terrible cold so today I'm not trading.
In order to filter out the noise in the market you need to filter out the noise in your head.
I think we all can be good traders, if we are in the mood and focused.

Thank you Mike for this forum.

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  #145 (permalink)
 jstnbrg 
Chicago, Illinois
 
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Bobcat View Post
4 ticks a day to financial freedom...

It is likely that most dreamers have punched numbers into a calculator or a spreadsheet and said if I can only get 4 ticks everyday, and double my account to $10K in less than 3 months. Then I could add another contract and get to $15 K by the end of month four, And then by the end of the year I could be making nearly $3K per day. All on just 4 ticks a day. I could get to a $million before the end of the second year. But I'm only dreaming, and I like to dream big.

Has anybody actually accomplished this task? Ok maybe not to a $Million, maybe $100K? It seems simple enough, its just not that easy to do.

Any takers?

That is exactly what I did and it's an approach that can work well if you tend to trade too frequently or lose self discipline once you're up money. After I adopted that method I went 6 1/2 years without a losing month, following 3 years struggling. I went from being a 5 lot trader in my pit to being a consistent 500 lot trader. My goal was 20 ticks/day ($312.50) trading 5 lots, or 4 ticks/day per contract. I was trading in a very low volatility contract. When I reached my goal, I left as soon as I closed out my position. It was an approach that psychologically allowed me to take only rock solid setups. And yes, my account did grow exponentially.

The reason I was trading 5 lots is that pit brokers don't want to trade with someone trading odd quantities; it messes up their count. (If you are filling 200 contracts in a fast market and someone wants to buy a 17 lot from you, it's easy to become confused about your count and over or under fill the order. You are personally on the hook for whatever losses occur). Sometimes if a market was running I would stay in a position beyond my goal, but once I hit the goal I became very protective of my profits. My unit of size was one contract/$2000 in my account (not a unit I would recommend to a trader starting out on the screen; I think you need at least $20,000 to even think about trading. I had people willing to back me if I needed help). In the course of that six years there were a few bumps along the road, mostly from withdrawing money from my account for a home renovation.

I've been off the floor for 8 years now, since trade has moved to the screen. I had some good periods on the screen before algorithmic high frequency trading became common, which I think happened in about 2004, but I've struggled since then and so have most of the guys I know with similar backgrounds to my own.

Trading with an easily attainable money goal is an approach I still favor. For me at least, it keeps me from getting too piggish or stretching for a high risk trade.

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 jstnbrg 
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webart View Post
The figures come from brokers, actually the figures for those that make money for more than a year are 98%/2% according to a CBOT lecture I was listening too ... and they should know.

Yes, how it works, is the professional traders, get there money from the newbies, and there is a constant supply of newbies into the market convinced by the marketing of the educators (who also feed on the newbies) that they will be able to make a living using their $5000 account. The market works by offering Hope, but not delivering what was Hoped for, that is what keeps the market moving.

The problem with making a living out of it, is the amount of capital you really need to have to handle draw downs and to give yourself the leverage you need and that's assuming you know what your doing (which takes years). When your under capitalized you have scared money, so you run tight stops and make poor decisions.

If you can make 2% per month consistantly, then you are up there with the best traders.

And no, I don't make 100K per year from trading !

There are much easier ways to make money than from trading.

Professional traders do not make the bulk of their money fleecing newbies. They make their money taking the opposite side of hedgers' orders.

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 jstnbrg 
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Day Trading Fool View Post
I keep hearing the 95/5 percentage of failing/successful traders used. This sounds reasonable to me.

I found myself wondering - how many on this forum have been able to make trading their primary source of income?

So - assuming that this ratio (5/95 = 1/19) is fairly constant at any given time, and assuming that members of futures.io (formerly BMT) forum are representative of the playing field as a whole, how about a little poll?

And realizing that people have varying measures of primary income - and a little bit of trivia for me personally, and if you don't mind sharing - how many make over $100k/year?

Here we go:

1. Is trading your primary source of income? (Yes or no)
2. Do you make over $100k/year in trading (Over, under, NA)
3. How long did you trade prior to making trading your primary source of income - or if not primary income yet, number of years trading? (Approx. # hours on screen)

1. Yes, for 24 years.
2. On average, over $100K
3. It took me three years to become consistent. See my previous reply.

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 jstnbrg 
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jungian View Post
I do and DONT understand the fixation on account size. At the end it all boils down to "profitability/drawdown/trade opportunity/risk/money management".

For example:

Starting Account Size $5,000
Average trades per day = 10 to keep it simple

70% wins 30% losses

Average Loser 8 ticks
Average Winner 6 ticks.


Statistically on average the results would be as follows

1. Win 5
2. Win 6
3. Lose 8
4. Win 4
5. Lose 8
6. Win 6
7. Win 5
8. Lose 8
9. Win 6
10. Win 4


Thats a net win on average of 12 ticks per 10 trades.

Lets say half a tick ($5) of commission per trade and you have:

GROSS PROFIT: 12 Ticks
COMMISSIONS: 1/2tick x 10 trades = 5 ticks
NET PROFIT: 7 ticks


$70 net profit on an account of $5000 is 1.4% per day !



MORAL OF THE STORY:

Account size protects against the risk of ruin, and effects the number of contracts traded but has NOTHING to do with the Expectancy/Profitability of the strategy.

Your STRATEGY is what will dictate what your account size can be.


Obviously the sample size of 10 is very very small and does not represent the real life scenario of say 8 losers in a row.

So a drawdown of (8 x $80) = $640 is likely. But even in that case the drawdown on a $5,000 account is only 12.8% ( $640/$5000)

If you are netting on average 0.7 ticks per trade it would take you about 92 trades ($640 drawdown/ $7 per trade average win) to get back to even.

If the system generates 10 trades a day its about 2 weeks (10 trading days) to get back to even.

ACCOUNT SIZE MATTERS, don't get me wrong.

But telling people they need a $50,000 account is as crazy as telling someone they need one of those fire fighting helicopters with the giant bucket of water to fill a swimming pool.

A garden hose will do just fine. It just takes a bit longer


My 2 cents!
Jungian

"What's the best way to get a million dollars at the CBOT? Start with two million." Old joke on the floor, and true.

An account that is too large to begin with is in my opinion a handicap, because it gives you a false sense of security. However an account that is too small is also a handicap, for obvious reasons. The problem is that you need to pay for the heat and electricity and food, maybe the data feeds, etc. If you can live with Mom and trade in sim until you are adequately consistent, that is an ideal situation (as long as you and Mom can stand each other). Then you just need enough capital to avoid a string of losers that will wipe you out.

Some of the best traders I knew on the floor were badly undercapitalized and paid their dues trading in mini contracts at the old MidAm or in the Dow or Muni pits at the CBOT where you could lease a membership for $100/month. A friend of mine who over time became an absolute whale (in trading, not girth!) spent 4 years in the Midam before he graduated to the CBOT floor. On the other hand, I knew a guy who came from money who traded like a wild, immature asshole for years. I think eventually he may have made it, but his account size and his sense of entitlement handicapped him badly.

One thing you failed to mention is that after that drawdown of $640 your $5000 account is now only $4,360. To generalize, a 50% loss does not require a 50% gain to get back to breakeven, it requires a 100% gain on the capital remaining in your account.

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 jstnbrg 
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vegasfoster View Post
First, there is a difference between making money from something and earning a living from something. I have rental properties that I make money from, but I earn a living from trading. Second, I would consider operating a trading website to be directly correlated to trading for a living. Third, regardless, things change. Fourth, I don't understand why people get pissed off or call Big Mike a sell out for possibly making money off this site. This is America, that's what we do here. Because the site is intended to help people he can never allow advertising? He can never charge a monthly fee? He had the ingenuity to create this site, he can do with it what he wants to. If he chooses not to, then he chooses not to, but people shouldn't be giving him crap for it either way.

This is the best site devoted to trading that I have found. I hope Big Mike is making money from it. The only way it would upset me was if Big Mike weren't being honest about his own results, i.e. sucking people into paying for the site based on a ginned up record. However I do not believe that is the case. Also, other successful traders post here regularly. I hope my posts will give people insight into how things look from the exchange floor (at least when the floor was relevant!).

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 jstnbrg 
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Slipknot511 View Post
Interesting. I'd like to know the stats for traders who stick with it for more than a certain period of time... like 5 years. That would also eliminate the ones who make an immediate windfall in a strong market, but get wiped out after a year or two when they learn that markets can also go down. (i.e. 1999). It seems that survival is the key to success. While I have wiped out many accounts, they were very small. It wasn't until I could not wipe it out that I decided to deposit enough money to get meaningful returns. Surprisingly it is so much harder to trade an undercapitalized account, that when you finally fund a real account, it seems easy by comparison.

While I do not have any absolute stats about failure rates, when I first came to the CBOT I was told that 80% of traders don't make it through the first year, but of those who do 80% wind up being able to make a living trading. Personally I think 80% is optimistic for both stats.

However in my experience the group of traders with the highest success rate is those who go to work for a proprietary trading group where they get capital, instruction, and support. Being undercapitalized is probably the biggest cause of failure, followed by trading "for the action" rather than as a business.

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  #151 (permalink)
 jstnbrg 
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Slipknot511 View Post
That would also eliminate the ones who make an immediate windfall in a strong market, but get wiped out after a year or two when they learn that markets can also go down. (i.e. 1999).

This is a good point and there is another related element as well. It is possible to make money in trending and volatile markets and it is also possible to make money in markets that are not moving much as long as there is some volume. A trader who either decides to make his/her living trading just one instrument or who is forced into it by the circumstance of being a market maker in just one instrument will learn to make significant money in either type of market. However when the market changes modes, as recently happened in Treasury futures, that trader will lose until he or she adjusts. One danger of having too much success early in one type of market is that you will absolutely get killed when the market switches. I knew a guy in a prop group who started trading the yield curve in a non-volatile period. He made about $600,000 his first year fading small moves. Then one day the market suddenly got volatile, and he lost $1 million on a single trade because he had never seen a market trend (seriously, it was that slow for that long!) and he just kept adding to his loser as the market trended, expecting the curve to come back to unchanged like it did almost every other day he traded.

The point is that it is not just trading a market that always goes in one direction that can make you a legend in your own mind, but also not having enough experience to know that the market can also change character, which will require a different style of trading.

I am trying to learn to watch and trade multiple markets at the same time so I can pick and choose the ones with the characteristics I want.

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 jstnbrg 
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CWchang Forex Trader View Post
New here but here is my experience


5years trading (4full time)

2 Accounts completely loss for a $18k loss

Now consistent 32k last year on 2-3contracts about a MC Donald Mgr salary

It is very hard frustrating but I am my own boss in a very bad economy.

Also this 32 k does not support my family my wife works as well as a RN.


Possible to make some money but I feel this being more and more like a dream to reach 100k


Good luck to all.
Cw

If possible, what you need to do is throw all of your trading earnings back into your account and increase your trade size proportionately to your account size. Do this net of expenses and taxes. DO NOT SPEND ANY OF THE MONEY YOU EARN TRADING, TRY TO LIVE ON YOUR WIFE'S INCOME. When you first start trading bigger you will probably experience a loss of performance. The toughest jump for me was going from being a one lot trader to a two lot trader, not so much because of the extra risk but because I got greedy. At twice the size, I thought I should make a FORTUNE, and I forgot to take profits. Where I had been making money consistently as a "one lot Louie", I started losing daily when I went to trading two lots. I wound up solving the problem by scaling out. If the trade was a winner, I would take a one tick profit on one of the two contracts every time until I became comfortable with the extra size.

One thing that happens if you make your trade size proportional to account size is that eventually you get accustomed to increasing your size. Also you trade just at the edge of discomfort, which I think makes you sharper.

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 jstnbrg 
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Private Banker View Post

Begin trading live when YOU feel most comfortable and are completely clear and confident in your strategy whether that takes 1,000 SIM trades or 3,000 SIM trades. The only thing that matters is your confidence in what you've developed that has proven profitability. Just keep it real simple at first.

I like this but I would add a step. Once you are confident in the skills you have developed sim trading, set yourself a sim money goal that will take a while to achieve from a specific start date, maybe a month or two. That start date should be after you have decided you are ready, not looking back to days when you took experimental trades. Trade the size you plan to trade live. When you have losing days, this will push back your "live" start date. Especially as you get close to trading live, my experience is that the sim trading will start to feel very real and the pressure of sim trading will feel like the pressure of live trading, because losing days in sim delay when you get to start making real money.

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 jstnbrg 
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Private Banker View Post

Another thing about stops as they relate to a strategy. Many new traders pick a market to trade and then create a risk-reward ratio. The problem is they typically base the stop on the amount they are willing to risk with no regards to the volatility of that particular market. For example, You're willing to risk $100 to make whatever amount, say $500. You've chosen to trade crude oil. The likelihood that you get stopped out on each trade is far higher than you reaching your target as crude oil is a highly volatile market. Stops need to be placed where your particular trade is no longer valid which means a more volatile market will require a larger stop range in fact, CL will jump one point ($1,000) in a few seconds. This leads to selecting the appropriate market relative to your account size. This is one of the biggest mistakes newer traders make and probably one of the biggest account killers that exist and leads to overtrading.

Absolutely terrific point! In addition to mini contracts which can sometimes be illiquid, there may also be something that correlates highly with the instrument you want to trade but is less volatile. For example, you may want to trade 30 year bonds but they are too volatile for your account size. A less volatile contract is the five year note, which usually but not always trades in the direction of the T bond but anyway has a dynamic all its own and is liquid and tradable.

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 jstnbrg 
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tigertrader View Post
Yes, but what separates the good traders from the great traders. What separates Tiger Woods from all the other golfers, and what separated Michael Jordan from all the others?

It's something intangible...

How do you define "good trader" vs "great trader"? I would argue that in the end it comes down to the bottom line. Consider two traders:

Trader #1 has a winning methodology or methodologies, great risk/reward stats, great discipline, is capable of trading many markets and many different types of market, but uses his trading income to live and does not grow his account, so his income, while consistent, does not grow fast.

Trader #2, is a "one trick pony" who makes money consistently enough but not as consistently as trader #1. He lives with his Mom so he doesn't spend any money. Instead every time his account grows by $5000 he increases his size one contract. He reinvests all his money in his trading business rather than spending it, and winds up being a much larger and much more profitable trader on a dollar basis than trader #1.


Who is the better trader? Clearly trader #1, but I would argue it doesn't matter. The fact is that trader #2 has the better business plan and winds up making more money. I think if you look at trading as a business and set up a business plan that includes growth as part of the plan, you can do very well indeed even if you are just OK as a trader.

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 tderrick 
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jstnbrg View Post
How do you define "good trader" vs "great trader"? I would argue that in the end it comes down to the bottom line. Consider two traders:

Trader #1 has a winning methodology or methodologies, great risk/reward stats, great discipline, is capable of trading many markets and many different types of market, but uses his trading income to live and does not grow his account, so his income, while consistent, does not grow fast.

Trader #2, is a "one trick pony" who makes money consistently enough but not as consistently as trader #1. He lives with his Mom so he doesn't spend any money. Instead every time his account grows by $5000 he increases his size one contract. He reinvests all his money in his trading business rather than spending it, and winds up being a much larger and much more profitable trader on a dollar basis than trader #1.


Who is the better trader? Clearly trader #1, but I would argue it doesn't matter. The fact is that trader #2 has the better business plan and winds up making more money. I think if you look at trading as a business and set up a business plan that includes growth as part of the plan, you can do very well indeed even if you are just OK as a trader.


Yes, but trader two still lives with his mom and is therefore deemed a geek... ; )

good points...

In the end... if you trade for a living, you must live off your profits. Just keep your lifesyle simple
so you can re-invest SOME of your gains....

In time both traders are driving Dino's.....


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 itrade2win 
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jstnbrg View Post
How do you define "good trader" vs "great trader"? I would argue that in the end it comes down to the bottom line. Consider two traders:

Trader #1 has a winning methodology or methodologies, great risk/reward stats, great discipline, is capable of trading many markets and many different types of market, but uses his trading income to live and does not grow his account, so his income, while consistent, does not grow fast.

Trader #2, is a "one trick pony" who makes money consistently enough but not as consistently as trader #1. He lives with his Mom so he doesn't spend any money. Instead every time his account grows by $5000 he increases his size one contract. He reinvests all his money in his trading business rather than spending it, and winds up being a much larger and much more profitable trader on a dollar basis than trader #1.


Who is the better trader? Clearly trader #1, but I would argue it doesn't matter. The fact is that trader #2 has the better business plan and winds up making more money. I think if you look at trading as a business and set up a business plan that includes growth as part of the plan, you can do very well indeed even if you are just OK as a trader.

I would prefer to be Trader #3, who makes money consistently who has a winning methodology or methodologies, great risk/reward stats, great discipline. Who takes between 30% to 50% of equity growth for income and the remaining 50% to 70% stays in the business account and when my account grows by $5000 I increase my size one contract. I don't live with my mom, but have living expenses LOL!!!

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 jstnbrg 
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Private Banker View Post


But to the point of what separates the ultra successful traders from the pack is something that comes from a lot of blood, sweat, tears, determination, crazy natural ability and most importantly 100% confidence and belief in themselves through their past experiences in trading and developing a winning edge. These traits can be found in every truly successful person alive. This is something every trader should strive for but it takes a lot to get there.

In my opinion, what separates the ultra successful trader from the pack is the ability to trade size as though you were trading one lots. The kind of money we all aspire to earn comes from trading large size. If you can develop a winning methodology trading small and gradually increase you trading size as your account grows, the limit to your income is determined by the liquidity and depth of the markets you trade.

My posts on this subject are not aimed at the trader who has not yet figured out how to make money consistently and who has not learned to trade in a variety of market conditions from glacial to wild. You will blow yourself out if you trade larger than your capital and your skill set allow. My point is that as you build your trading business, growth needs to be part of the plan.

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 jstnbrg 
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tderrick View Post
In my limited experience live trading, It seems to always boil down to one thing. Your mental strength.

Can you take AND hold on to the trade you've taken a thousand times in practice and know works
most of the time.

The 95 to 5 ratio is undoubtedly correct.

So... It boils down to this. Do YOU believe you are a 5%er? Have you always tried harder than everyone else?

Here is my breakdown....

The first 75% - You mean I'm going to have to study? I need to read books? Man, this is too much like school..
I'm out. I thought this would be easy money...

The next 10% - I will study my brains out and learn it all!! Oh wait, I have no guts... I am not fearless...
I'm out

The Last 10% - I can't seem to find a balance between all the immense knowledge I have gathered over the last couple of years and the simple ability to pull the trigger at the correct point in Price Action.
I am always at break even. This is taking too much of my time.
I'm out


...

People simply don't realize what they are getting into...

Love this post. IMO, "The next 10%" and "The last 10%" are really the same thing. Also, among the 95% who don't make it are many with the guts and the toughness but who lack adequate capital to take them through the learning curve. Some people simply do not have the freedom to live in Mom's basement. They have people depending on them who need to be fed today. Those people should not have started trading in the first place.

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 tderrick 
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jstnbrg View Post
Love this post. IMO, "The next 10%" and "The last 10%" are really the same thing. Also, among the 95% who don't make it are many with the guts and the toughness but who lack adequate capital to take them through the learning curve. Some people simply do not have the freedom to live in Mom's basement. They have people depending on them who need to be fed today. Those people should not have started trading in the first place.


There are markets available for anyone to learn this game...

A teenager with an allowance can trade the Forex Nano... Anyone with enough determination can win.

To never try is the true mistake...


AJ
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 Private Banker 
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jstnbrg View Post
In my opinion, what separates the ultra successful trader from the pack is the ability to trade size as though you were trading one lots. The kind of money we all aspire to earn comes from trading large size. If you can develop a winning methodology trading small and gradually increase you trading size as your account grows, the limit to your income is determined by the liquidity and depth of the markets you trade.

My posts on this subject are not aimed at the trader who has not yet figured out how to make money consistently and who has not learned to trade in a variety of market conditions from glacial to wild. You will blow yourself out if you trade larger than your capital and your skill set allow. My point is that as you build your trading business, growth needs to be part of the plan.

Thank you Jstnbrg. Nice to meet you. This is correct. I eluded to this earlier here:

Cheers,

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  #162 (permalink)
 jstnbrg 
Chicago, Illinois
 
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swedein View Post
I'm a good trader when I'm in the mood and focused.
I have this terrible cold so today I'm not trading.


This is an important point. Others have made the point that your state of mind is important when you trade, but few if any have talked about the importance of monitoring your state of mind. You can do considerable damage to your account if you become emotional for whatever reason: big losses, big wins, distractions, personal issues, etc. As a pit trader I always either left for the day or at least walked away for an hour or so if I had three losing trades in a row, both to reflect on why I might have lost money and also to make sure I didn't start trading emotionally. If I lost money three days in a row I would take at least two days off just to calm down and get far enough away from the losses that fear wouldn't impact my objectivity.

Pay attention to your state of mind, both when things are going badly and when they are going very well. If you sit down in the morning barely able to see your screen, it's going to be tough to trade well, especially when things start to go against you. The same thing goes if you've just had an unusual string of winners.

Overconfidence has done me more harm in the past than fear by a wide margin. I once lost a year's living expenses in 15 minutes because I had been absolutely killing 'em for two weeks running. I broke every important rule I had laid down for myself several times on the same trade. How could I be wrong? The previous two weeks had proved I was God Himself.

One of the greatest traders I ever knew, a pioneer in financial futures trading and a legend in the business, was worthless the year he got divorced. I can't think of a trader I've known including myself who didn't pay in spades for building a trophy house, even if he could easily afford it.

One of the reasons I like trading for a specific goal every day is that it helps keep me on an even keel. Being on an even keel is critical, and you need to be aware of your emotional state to be sure that your decision making is dispassionate.

"You don't need a weatherman to know which way the wind blows..."
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  #163 (permalink)
 jstnbrg 
Chicago, Illinois
 
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itrade2win View Post
I would prefer to be Trader #3, who makes money consistently who has a winning methodology or methodologies, great risk/reward stats, great discipline. Who takes between 30% to 50% of equity growth for income and the remaining 50% to 70% stays in the business account and when my account grows by $5000 I increase my size one contract. I don't live with my mom, but have living expenses LOL!!!

Me too. But not everybody can be Michael Jordan. The Steve Kerrs of the world can make their mark too, and still be amply compensated for it.

"You don't need a weatherman to know which way the wind blows..."
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 jstnbrg 
Chicago, Illinois
 
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Private Banker View Post
Thank you Jstnbrg. Nice to meet you. This is correct. I eluded to this earlier here:

Cheers,

I've liked all of your posts. I was working through the thread from the oldest posts first and just commenting as I saw them. After I wrote this I came to all of the comments about compounding your winnings.

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  #165 (permalink)
 Private Banker 
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jstnbrg View Post
I've liked all of your posts. I was working through the thread from the oldest posts first and just commenting as I saw them. After I wrote this I came to all of the comments about compounding your winnings.

Thank you! You've posted some great insight as well! Keep'em coming!

All the Best,
PB

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 itrade2win 
New York
 
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jstnbrg View Post
Me too. But not everybody can be Michael Jordan. The Steve Kerrs of the world can make their mark too, and still be amply compensated for it.


I don't want to be, or am trying to be Michael Jordan or even Steve Kerr. I just want to be me and make my own mark in life and in this world. And who says that I can't be better than Michael Jordan or any other trader in the world? No one and I know for a fact that NO ONE works harder than ME. I spend every waken moment studying charts, reading books, writing in my journal, taking notes and creating statistics 18+ hrs a day. I have sacrificed everything to this point to be a professional trader. When I mean professional trader, I am talking more than just being consistent. I will master this and I will succeed beyond most imaginations. I have done this before with other business ventures and I will do it with trading.

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 MetalTrade 
 
 
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itrade2win View Post
I will master this and I will succeed beyond most imaginations. I have done this before with other business ventures and I will do it with trading.

Good luck, I hope you make it. But your efforts are no guarantee for success. Unfortunately.

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  #168 (permalink)
 tderrick 
Nashville, Tennessee
 
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itrade2win View Post
I have sacrificed everything to this point to be a professional trader. When I mean professional trader, I am talking more than just being consistent. I will master this and I will succeed beyond most imaginations. I have done this before with other business ventures and I will do it with trading.


oooo.... I like that!

I feel we have a similar mindset. I, however, have a career that a love that leaves me not as much time
as I would like to master trading. I am , nevertheless , learning everytime I trade or read. I am already
steadily at BE. Just a little more refinement and I'll be making that %50 drawdown back....

By the time I can't hear well anymore... soon, if I keep monitoring the way I do ; ) , I'll be ready for my
second career...


AJ
Nashville, Tennessee


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  #169 (permalink)
 rassi 
the congo
 
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itrade2win View Post
I don't want to be, or am trying to be Michael Jordan or even Steve Kerr. I just want to be me and make my own mark in life and in this world. And who says that I can't be better than Michael Jordan or any other trader in the world? No one and I know for a fact that NO ONE works harder than ME. I spend every waken moment studying charts, reading books, writing in my journal, taking notes and creating statistics 18+ hrs a day. I have sacrificed everything to this point to be a professional trader. When I mean professional trader, I am talking more than just being consistent. I will master this and I will succeed beyond most imaginations. I have done this before with other business ventures and I will do it with trading.

i appreciate your dedication is impressive but when it comes to actually trading it is this attitude that will be most effective in ensuring you do not make it.

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 itrade2win 
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MetalTrade View Post
Good luck, I hope you make it. But your efforts are no guarantee for success. Unfortunately.


Efforts alone are never enough to guarantee success. Being emotionally and psychologically strong will put the odds in my favor. Nothing else really matters.

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 itrade2win 
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rassi View Post
i appreciate your dedication is impressive but when it comes to actually trading it is this attitude that will be most effective in ensuring you do not make it.

I understand why you had said this, but you have no idea what you're talking about. Perseverance alone will never bring success without the proper mental and psychological tools and mindset. Trading IMO is 95% psychological.

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 aquarian1 
Point Roberts, WA, USA
 
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Day Trading Fool View Post
I keep hearing the 95/5 percentage of failing/successful traders used. This sounds reasonable to me.
Here we go:
1. Is trading your primary source of income? (Yes or no)
2. Do you make over $100k/year in trading (Over, under, NA)
3. How long did you trade prior to making trading your primary source of income - or if not primary income yet, number of years trading? (Approx. # hours on screen)

I have been working on my systems for 2 years for daytrading - full time and living on my savings. So daytrading is my sole source of income though no income. I traded a bit earlier on before I was ready, lost some money, and quickly stopped. While my system is not yet ready for prime time - I must start trading soon as I am approaching the end of my savings. I am on the computer from 6:30 CT to 8:30, "on screen" watching the ES, doing hand graphs and calculations form open 8:30- 15:15, and 15:15 to 17:00 or 18:00 doing end of day wrap-up.


1. Yes
2. No
3. NA

Thank-you for posing the question. I think it is a good one.

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 aquarian1 
Point Roberts, WA, USA
 
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sharky View Post
rassi i dont have any systems everything i post is to teach people what to look at and to train their minds on how to see price action easier,to let them pratice stuff on sim over and over again until a light goes off and they say oh thats what he means,i look at charts 15-20 hrs per day for about 5 years and paid thousands and thousands for my school and mentored under real traders its not easy or cheap to trade i sacerficed relationships and lost friends,its a long hard lonley road and you have to decide how bad do i really want this and is there a eaiser way to make a buck...sharky

Thank-you Sharky for this great post!

Your sharing of the investment in time, education, dollars, practice and relationships that you sacrificed is helpful to others who have chosen this challenging endeavor.

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  #174 (permalink)
 rassi 
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itrade2win View Post
I understand why you had said this, but you have no idea what you're talking about. Perseverance alone will never bring success without the proper mental and psychological tools and mindset. Trading IMO is 95% psychological.

you do not understand why i said it then. sometimes trying to hard and wanting it too much inhibts you from succeding, this is especially true in trading.

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 theucreport 
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aquarian1 View Post
I must start trading soon as I am approaching the end of my savings.


Be careful with that. Trading with your last savings is extremely dangerous. In that situation your chances to succeed drop drastically. It's because of an emotional issue, nothing to do with your system...
Before get to that point look for alternatives (i.e. a part time job, a trade sabbatical, etc.).

UC

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 itrade2win 
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rassi View Post
you do not understand why i said it then. sometimes trying to hard and wanting it too much inhibts you from succeding, this is especially true in trading.


I do understand why you said it, and I appreciate that. But, you don't know me. And that's why psychology is the MOST important factor. I have my methodology and money management in tact. My main focus is on me psychologically. Reading only psychology books, but keeping a journal and statistical records of winning % of my setups is only part of the game.

All I'm saying is to me, trading is a game of mental strength. And if you can't take the challenge and prepare yourself to win then no, you won't be successful at trading or in most businesses.

I have overcome some of the highest odds against me in the past. And it wasn't because I worked 80+ hours a week. It was because I had the mental toughness to achieve the high levels of success. I have acquired levels of success that most people can only dream of. I know my DNA and I know that I will accomplish my goals

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 Private Banker 
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itrade2win View Post
I don't want to be, or am trying to be Michael Jordan or even Steve Kerr. I just want to be me and make my own mark in life and in this world. And who says that I can't be better than Michael Jordan or any other trader in the world? No one and I know for a fact that NO ONE works harder than ME. I spend every waken moment studying charts, reading books, writing in my journal, taking notes and creating statistics 18+ hrs a day. I have sacrificed everything to this point to be a professional trader. When I mean professional trader, I am talking more than just being consistent. I will master this and I will succeed beyond most imaginations. I have done this before with other business ventures and I will do it with trading.

itrade2win,

Sounds like you are making all the right steps in the beginning of your trading career. Because you've pursued other business ventures in the past, I would assume you have a solid business plan which would include your strategy, money management, goals and any contingency plans. I believe if you stick to your plan, have a positive mental attitude and a profitable edge, you will make it. Whether you want to be compared to another athlete, that's up to you. No one will ever know how successful you are (other than your broker) but it doesn't matter. You're in it to win and have a comfortable lifestyle for yourself and not for bragging rights. Don't listen to nay sayers. You've sacrificed everything so there's no turning back now. You can do it.

These conversations are very high level and at the risk of going a bit off topic from the original question but I'll keep it going if allowed. As I mentioned somewhere on this forum, trading is a very individualistic, cognitive activity. It will bring out the best and worst in you. It's how you handle it all and stick to your plan that defines the winners from the losers.

On the lighter side of things, from the words of the great Rocky Balboa "Let me tell you something you already know, the world ain't all sunshine and rainbows. It's a very mean and nasty place and I don't care how tough you are it will beat you to your knees and keep you there permanently if you let it. You, me or nobody is gonna hit as hard as life. But it ain't about how hard you hit, it's about how hard you can get hit and keep moving forward. How much you can take and keep moving forward. That's how winning is done! Now, if you know what you're worth, go out and get what you're worth! But you've gotta be willing to take the hits! And not pointing fingers saying, you aren't where you want to be because of him, her or anybody! Cowards do that and that ain't you! You're better than that! "

As funny as it may seam (and the risk of sounding crazy), his message has some very valuable advice when it comes to trading. You should always be managing your risk and keep moving forward. Take your stops when they need to be stopped, follow your plan and the money will take care of itself. The over all concept is fairly simple. The hard part is the psychological aspect. Just remember what Rocky has to say

Best,
PB

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 MetalTrade 
 
 
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itrade2win, I wish you all the best. But you sound like a little too overconfident, what I read from you did not made me profitable, it was not only psycho stuff, so probably I take your money faster in this game than you can blink your eyes.

Why ? Because you will be focused on your psycho strength and you will have that in the back in your mind while trading, and meanwhile I will have your money.

The only psychological thing for me is that there is no emotion left anymore. Zero.

People do not become profitable because they read the right books, believe in themselves or treat trading as a business. These 3 items are heavily overrated. In fact, normal business rules don't apply to trading, that's why TREATING TRADING AS A BUSINESS IS PLAIN BULLSHIT.

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 jstnbrg 
Chicago, Illinois
 
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itrade2win View Post
I don't want to be, or am trying to be Michael Jordan or even Steve Kerr. I just want to be me and make my own mark in life and in this world. And who says that I can't be better than Michael Jordan or any other trader in the world? No one and I know for a fact that NO ONE works harder than ME. I spend every waken moment studying charts, reading books, writing in my journal, taking notes and creating statistics 18+ hrs a day. I have sacrificed everything to this point to be a professional trader. When I mean professional trader, I am talking more than just being consistent. I will master this and I will succeed beyond most imaginations. I have done this before with other business ventures and I will do it with trading.

I was not actually the one who brought up Jordan in the first place, but being from Chicago and having watched him in his glory years I like to use his skill set as a metaphor for a trader who has it all. Jordan played great offense, great defense, was a great clutch player and a great team player, and was a motivator for his teammates. Steve Kerr was a role player who made critical contributions to the team, but he did not "have it all" like Jordan.

The trader you aspire to be is Michael Jordan-like, i.e. someone who has it all. Your work ethic will get you far but it will not guarantee that you have it all. Superstars like Jordan, Tiger Woods, and Cristiano Ronaldo worked hard like you do but they also have huge talent or preparation from such an early age that it's indistinguishable from talent. My point was that even if you don't "have it all", for example if you discover that no matter how hard you try you simply can't make money in CL and GC but you do consistently well in ZN, ES, and 6E, or that you can make money day trading but not position trading, you can still make a huge fortune with the proper business plan. And trading in the privacy of your office, no one but you will know, and no one but you will care, if you "have it all". But if you have a successful business from trading with all the lifestyle perks that come with it, i.e. nice home, nice vacation home, nice car, nice spouse, etc. and most importantly the time to enjoy all those nice things, you will have the envy and the respect of everyone who knows you, as long as you are not a total dickhead. You will have made that mark, even if there is some aspect of the business you can not master.

I spent 6 years in cash grain trading offices, 16 years in the pits, and 6 years trading in arcades with other professional traders. Like tigertrader, I have spent my entire adult life, over 30 years, being exposed to probably a thousand other traders. I've seen traders with huge talent but huge egos and poor discipline make 8 figures on a single trade and then be in debt two years later. I've seen traders with much less talent but a great work ethic make a solid, high six figure income, never be considered a superstar, but still be in possession of their money and a very nice lifestyle indeed after 20 years in the business. I've seen one of the biggest names in the game, one of maybe the two most famous names in this business in Chicago with probably a nine figure lifetime income from trading, one of Jack Schwager's "Market Wizards", lose all his money in an unrelated business.

What all this exposure to other traders over decades gives a person is perspective. Not only have I had to win my own psychological and financial battles, I've gotten to witness hundreds of other traders coping with those issues in their own way. This is unfortunately a perspective that is does not exist for the trader laboring in the privacy of his or her own office.

So, after all this, I'm just saying, you can make your mark in this business just fine with a limited skill set, as long as you have the right business plan, and you can utterly fail in this business with a terrific skill set and a bad business plan. Don't give the plan short shrift because you spend all your effort at analysis.

"You don't need a weatherman to know which way the wind blows..."
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  #180 (permalink)
 jstnbrg 
Chicago, Illinois
 
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Private Banker View Post
itrade2win,

I believe if you stick to your plan, have a positive mental attitude and a profitable edge, you will make it. Whether you want to be compared to another athlete, that's up to you. No one will ever know how successful you are (other than your broker) but it doesn't matter.


Best,
PB

A little spooky. Are you my long lost twin or something?

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 Private Banker 
La Jolla, CA
 
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jstnbrg View Post
A little spooky. Are you my long lost twin or something?

Lol! Maybe!

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  #182 (permalink)
 jstnbrg 
Chicago, Illinois
 
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MetalTrade View Post
itrade2win, I wish you all the best. But you sound like a little too overconfident, what I read from you did not made me profitable, it was not only psycho stuff, so probably I take your money faster in this game than you can blink your eyes.

Why ? Because you will be focused on your psycho strength and you will have that in the back in your mind while trading, and meanwhile I will have your money.

The only psychological thing for me is that there is no emotion left anymore. Zero.

People do not become profitable because they read the right books, believe in themselves or treat trading as a business. These 3 items are heavily overrated. In fact, normal business rules don't apply to trading, that's why TREATING TRADING AS A BUSINESS IS PLAIN BULLSHIT.

Sorry, not only are you wrong about the business part, you fundamentally do not understand this business if you think it is about taking other traders' money. The futures business exists to allow commercial participants, eg farmers, grain companies, primary dealers at the Fed, and similar businesses to reduce exposure of their inventories to price risk. The big players in the game are not speculators at all, interested in making a speculative profit, but hedgers who don't care in the least if they make or lose money on their futures positions. All they care about is that they make money from the operations of their normal business activities; storing grain, moving Federal borrowing into market channels, etc. They pay us speculators to take the price risk they cannot afford to take.

It may feel like a game to you, but it is not one. It is a serious business, with a serious business purpose.

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  #183 (permalink)
 rassi 
the congo
 
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the key is the emotional attitude to risk, and no desire or hard work in the world can attain that or pshycological mind training. true there are many other important factors needed to be a success but with out this it wont happen.

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 tigertrader 
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jstnbrg View Post
I was not actually the one who brought up Jordan in the first place, but being from Chicago and having watched him in his glory years I like to use his skill set as a metaphor for a trader who has it all. Jordan played great offense, great defense, was a great clutch player and a great team player, and was a motivator for his teammates. Steve Kerr was a role player who made critical contributions to the team, but he did not "have it all" like Jordan.

The trader you aspire to be is Michael Jordan-like, i.e. someone who has it all. Your work ethic will get you far but it will not guarantee that you have it all. Superstars like Jordan, Tiger Woods, and Cristiano Ronaldo worked hard like you do but they also have huge talent or preparation from such an early age that it's indistinguishable from talent. My point was that even if you don't "have it all", for example if you discover that no matter how hard you try you simply can't make money in CL and GC but you do consistently well in ZN, ES, and 6E, or that you can make money day trading but not position trading, you can still make a huge fortune with the proper business plan. And trading in the privacy of your office, no one but you will know, and no one but you will care, if you "have it all". But if you have a successful business from trading with all the lifestyle perks that come with it, i.e. nice home, nice vacation home, nice car, nice spouse, etc. and most importantly the time to enjoy all those nice things, you will have the envy and the respect of everyone who knows you, as long as you are not a total dickhead. You will have made that mark, even if there is some aspect of the business you can not master.

I spent 6 years in cash grain trading offices, 16 years in the pits, and 6 years trading in arcades with other professional traders. Like tigertrader, I have spent my entire adult life, over 30 years, being exposed to probably a thousand other traders. I've seen traders with huge talent but huge egos and poor discipline make 8 figures on a single trade and then be in debt two years later. I've seen traders with much less talent but a great work ethic make a solid, high six figure income, never be considered a superstar, but still be in possession of their money and a very nice lifestyle indeed after 20 years in the business. I've seen one of the biggest names in the game, one of maybe the two most famous names in this business in Chicago with probably a nine figure lifetime income from trading, one of Jack Schwager's "Market Wizards", lose all his money in an unrelated business.

What all this exposure to other traders over decades gives a person is perspective. Not only have I had to win my own psychological and financial battles, I've gotten to witness hundreds of other traders coping with those issues in their own way. This is unfortunately a perspective that is does not exist for the trader laboring in the privacy of his or her own office.

So, after all this, I'm just saying, you can make your mark in this business just fine with a limited skill set, as long as you have the right business plan, and you can utterly fail in this business with a terrific skill set and a bad business plan. Don't give the plan short shrift because you spend all your effort at analysis.


Sounds like you are referring to Baldy. I was standing next to him when he took 5000 bonds long into unenjoyment. The Bonds broke 2 points on the number and TB was down 10MM. The clearing association sent someone into the pit, pulled him out, and made him write a check on the spot. He then came back into the pit and traded out of his position like nothing happened, except he was pissed off, for getting pulled out of the pit.

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  #185 (permalink)
 itrade2win 
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I have to laugh. I sit here and read these reply's and wonder who is really telling the truth about trading with a live account and who is really profitable. No one really knows other than yourselves. My philosophy is never to take advice from anyone who is at the same level or below myself. Not that any of you have to prove anything to any other person in this forum, but how do we really know that you know what you're talking about or if you're just full of shit and trading is just a hobby or if you're a wannabe's? So with that said I will say no more on the matter. I believe in the proof. At some point I am willing to share my monthly account statement with others and I bet none of you are.

Enough said, it all comes down to the individual person if their just dreamers or if they're for real. What I mean is only the individual person knows if they have what it takes to be a successful trader or not. We all know our DNA, our weakness and strengths. And if we can overcome from being an unsuccessful trader to becoming a successful trader. Nothing that any of you say can change another person only the individual person can overcome failure to success.

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  #186 (permalink)
 MetalTrade 
 
 
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jstnbrg View Post
Sorry, not only are you wrong about the business part, you fundamentally do not understand this business if you think it is about taking other traders' money. The futures business exists to allow commercial participants, eg farmers, grain companies, primary dealers at the Fed, and similar businesses to reduce exposure of their inventories to price risk. The big players in the game are not speculators at all, interested in making a speculative profit, but hedgers who don't care in the least if they make or lose money on their futures positions. All they care about is that they make money from the operations of their normal business activities; storing grain, moving Federal borrowing into market channels, etc. They pay us speculators to take the price risk they cannot afford to take.

It may feel like a game to you, but it is not one. It is a serious business, with a serious business purpose.

It's clear you never created a succesful business, because if you would you would understand that trading is a complete different ballgame

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 tigertrader 
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Isn't all this debate just a question of semantics. Does it really matter if we refer to trading as a business or a game? Personally, I think an argument can be made for both classifications. Obviously, it is a very large and important business whether it's futures trading or equity trading. They both serve the functions of price discovery and risk transference, and in the case of equities, capital formation. Trading is also a game for obvious reasons; you are competing against the market, you are keeping score, there are winners and losers, etc. What is universal in both cases, is trading is a performance based activity, and if you do it for a living, a very serious activity.

And can we all agree, that to achieve a high level of performance, which would result in a subsequent high degree of success, it requires an integrated approach. In other words, there are many factors or components in this process that must be be mastered in order to achieve maximum performance, i.e, Planning and Preparation• Evaluation• Market Monitoring• Trade Selection• Trade Management• Trade Exits• Mental State/Emotional Control (Focus, Confidence, Patience,Discipline)• Physical State (Energy, Health and Well-being), and Learning and Education.

Also can we all agree that it is under our own control how we deal with these factors, and that it is up to us to work on the skills that may need improvement. But, that ultimately, becoming adept at these skills, will give us the best possible outcome in our trading?

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 jstnbrg 
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tigertrader View Post
Sounds like you are referring to Baldy. I was standing next to him when he took 5000 bonds long into unenjoyment. The Bonds broke 2 points on the number and TB was down 10MM. The clearing association sent someone into the pit, pulled him out, and made him write a check on the spot. He then came back into the pit and traded out of his position like nothing happened, except he was pissed off, for getting pulled out of the pit.

That's a famous story. I think he talked about it in "Market Wizards" and I had heard it elsewhere as well. What happened to him in the end is a cautionary tale to us all.

Did you go to the lecture he gave about trading for the CBOT Education Department? There were hundreds of us there. I asked him a question about how you know when it's time to get bigger and I was never satisfied with the answer he gave, which was basically that when it's time, you know. I was already a large local in my own pit, and I had done it very incrementally, in just the manner I've discussed in this forum. Given that his own story was that he got big really fast, I always wondered how much luck was involved at the beginning of his career. Obviously he was one of the all time greats, but it seems that's a career that might never have gotten off the ground if some big event had swept him away in the early days.

How well do you know him?

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 jstnbrg 
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MetalTrade View Post
It's clear you never created a succesful business, because if you would you would understand that trading is a complete different ballgame

\

OK, educate me.

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  #190 (permalink)
 tigertrader 
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jstnbrg View Post
That's a famous story. I think he talked about it in "Market Wizards" and I had heard it elsewhere as well. What happened to him in the end is a cautionary tale to us all.

Did you go to the lecture he gave about trading for the CBOT Education Department? There were hundreds of us there. I asked him a question about how you know when it's time to get bigger and I was never satisfied with the answer he gave, which was basically that when it's time, you know. I was already a large local in my own pit, and I had done it very incrementally, in just the manner I've discussed in this forum. Given that his own story was that he got big really fast, I always wondered how much luck was involved at the beginning of his career. Obviously he was one of the all time greats, but it seems that's a career that might never have gotten off the ground if some big event had swept him away in the early days.

How well do you know him?

I stood next to him for years, both in the South room and in the old grain room, but not in the new building. Rob and John Moore brought him into the business, and he was a cocky s.o.b. from day one. Initially we traded the same size, but he left me standing in the dust when he started taking 500 at a crack and then thousand lots. I really wasn't comfortable trading more than 50's outright, but I would have as many as 2000 spreads on during roll. Tommy got big so quickly, because he would never turn down a trade from a broker, no matter how big the order. It used to literally freak me out, the kind of size he would trade. Of course, the bigger the size of the order, the bigger edge he demanded, and I also used to freak at the size of the edges he would get. But, he always manged to get the quote out. IMO, Tommy's "skill" had more to do with the size of his balls and his ego, than his technical trading skills, but I guess that's just another example of how important the mental aspects are to successful trading.

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 jstnbrg 
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rassi View Post
the key is the emotional attitude to risk, and no desire or hard work in the world can attain that or pshycological mind training. true there are many other important factors needed to be a success but with out this it wont happen.

I agree that one key is the emotional attitude to risk along with some form of pattern recognition ability, but I think the correct attitude can be learned or developed over time. I am by nature risk averse compared to many traders I know in the areas of my life that do not involve trading. I don't gamble, I don't invest aggressively, I don't skydive, etc. And my parents would definitely have characterized me as being a cautious kid. But I've been trained since I was 22 to take the business risks associated with trading, it was the job I was being paid a salary to do, and I learned to do it.

My attitude is that all businesses involve some degree of risk, even if the business owner doesn't think about those risks. You paint houses for a living, you may fall off a ladder. You drive a truck, you may slip on an icy bridge. You have a legal or medical practice or accounting practice, you risk malpractice lawsuits. You make markets, you have a lot of losing trades, but at the end of the day you take home a paycheck. The point is to figure out ways to manage risk, both emotionally and in how you conduct your business.

I have outlined a way to get over the hurdle of the emotional resistance to trading bigger, which is to do it incrementally and to make a habit of it. It worked exceptionally well for me and allowed me to build substantial capital even though I am no Michael Jordan.

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 jstnbrg 
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MetalTrade View Post
I'll buy you 10 times and it didn't took me 30years.

@tigertrader: Sound like an Israeli we both know? "I vill BURY you!"

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 jstnbrg 
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tigertrader View Post
But, he always manged to get the quote out.

I.e. the broker traded through a bunch of orders to get a one piece fill and let Tom figure out how to deal with it. That's exactly the kind of legal risk I DIDN'T want to deal with. Like trying to explain ginzies to a grand jury.

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  #194 (permalink)
 tigertrader 
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jstnbrg View Post
@ tigertrader: Sound like an Israeli we both know? "I vill BURY you!"


Guidon, Yosi, or someone else?

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  #195 (permalink)
 jstnbrg 
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tigertrader View Post
Guidon, Yosi, or someone else?

Guidon was before my time, he was in London by the time I got to the CBOT. Yosi. Who else was there?

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  #196 (permalink)
 tigertrader 
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jstnbrg View Post
Guidon was before my time, he was in London by the time I got to the CBOT. Yosi. Who else was there?

Sam Judlo, in the beans is a Sabra.

Yosi was a stitch!!!

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 jstnbrg 
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itrade2win View Post
I have to laugh. I sit here and read these reply's and wonder who is really telling the truth about trading with a live account and who is really profitable. No one really knows other than yourselves. My philosophy is never to take advice from anyone who is at the same level or below myself. Not that any of you have to prove anything to any other person in this forum, but how do we really know that you know what you're talking about or if you're just full of shit and trading is just a hobby or if you're a wannabe's? So with that said I will say no more on the matter. I believe in the proof. At some point I am willing to share my monthly account statement with others and I bet none of you are.

I'm not sure who tigertrader is, but I guarantee that he and I are telling the truth. In case I didn't make it clear, I did well in the pit and for a couple of years after, but have not yet mastered swing/day trading. I don't think the problem is the way I deal with risk, I think it's partly insufficient pattern recognition and partly boredom. Best of luck to you, I think you are very much on the right track.

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  #198 (permalink)
 jstnbrg 
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tigertrader View Post
Sam Judlo, in the beans is a Sabra.

Yosi was a stitch!!!

I didn't know Sam Judlo. Yosi was indeed a stitch. Were you there the day Charlie D came up to him after the close and just screamed at him because of the way he had marked a back month?

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 LukeGeniol 
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  #200 (permalink)
 jstnbrg 
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LukeGeniol View Post
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If one of them was mine, I'm sorry, I was not trying to be offensive, but I must admit I was offended by a guy who talks like an expert but who posts things that display common misunderstandings about the business, misunderstandings which need to be cleared up for everyones' sakes, and who throws a lot of macho BS at people who are working hard to better themselves.

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