Primary source of income: how many have made it? - Psychology and Money Management | futures io social day trading
futures io futures trading


Primary source of income: how many have made it?
Updated: Views / Replies:116,951 / 625
Created: by Day Trading Fool Attachments:37

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 37  
 
Thread Tools Search this Thread
 

Primary source of income: how many have made it?

  #261 (permalink)
Elite Member
Chicago, IL
 
Futures Experience: Advanced
Platform: NT7 Newest Version
Broker/Data: Ninja
Favorite Futures: TF, NQ
 
mmtrader4's Avatar
 
Posts: 33 since Mar 2010
Thanks: 36 given, 82 received


jstnbrg View Post

A question about these trading rooms, as I've never been in one: can you talk to the moderator? Can you ask him what he saw this time that made him deviate from his rules? If not, what are you paying for?


Yes, in the good rooms you can. I've been in four and (taken three trials also - curiosity and I DON'T trade live in a trial room nor recommend it) I will not divulge who any of the rooms are as this forum is not about sales pitches OK?. I am currently in one and do NOT take every trade, I am discretionary also. The moderator trades a live account and makes money DAILY, yes daily. NOTE!!- I didn't say there is never a losing trade, I said he (we) make money daily. And I am happy.
The difference between a good room / moderator / mentor trader is the really good ones know how to take money out of the market daily. It's about positive expectancy and law of averages with a proven track record. I KNOW you've heard it thousands of times; but it is true. Plain and simple. The good ones teach money management and are truly interested in your success. YES, there are people that give a damn about others. I am tired of hearing, " if his / her system is so good why would they want to share it with anybody." BECAUSE - Some people care! And trading is a lonely business. A room can be rewarding. Personally, If I was that good I would do it (be a room mentor moderator) because I've given back my whole life so it's in my mental makeup.
I was also in a room where the moderator was so confident in his methodologies he allowed PM's between members. You cannot get any better than that - he was that confident that traders could talk with each other.
The "bad" rooms prohibit any contact with other traders and some don't even allow you to post. STAY AWAY for obvious reasons.

I'm not advocating you all go out and join a room. I am just responding to jstnbrg. OK?

Reply With Quote
The following 5 users say Thank You to mmtrader4 for this post:
 
  #262 (permalink)
Elite Member
denver, colorado
 
Futures Experience: Intermediate
Platform: NT
Favorite Futures: ZS
 
Surly's Avatar
 
Posts: 704 since Mar 2011
Thanks: 628 given, 1,242 received

On the question of the relative importance of psychology

I hope this post is "on topic" enough for this thread...

I'm posting because the discussion of the importance of psychology has been critical for me and also very difficult for me to understand during my development and posting here will help me reinforce my own beliefs. My premise is that psychology becomes important only once a trader has developed an edge and that developing an edge is actually the most important (and difficult) piece of the puzzle in becoming consistently profitable. I think that developing traders would do well to understand that no amount of discipline, self-control, and clear thinking will help them until they have a robust method with a positive expectancy. That said, a developing trader will never be able to develop a robust edge without removing, at least to a large degree, the mistakes (both in perception and execution) that stem from insufficiently developed psychology. This may seem like a chicken-and-egg cop-out on the fundamental question but I think the distinction is important to consider.

We all know that it is easy to pick winning trades but that trading profitably on a consistent basis is a different beast entirely. So why do I think developing a method with a positive expectancy is more important than perfecting psychology? A post in forex factory I've kept with me from David Hanover (he's an excellent source of good thoughts on the subject of trading) mirrors my thinking:

"This must be about the 99th time I’ve posted this type of message.
It’s addressed to all of those well-meaning folk who believe that:

-- you can succeed in forex with MM and discipline alone
-- the system doesn’t matter; it’s all about the trader, his mindset, and his mastery of self
-- it’s possible to profit in the long term by using random entries
-- trading psychology books (like Mark Douglas'), and/or clichés posted on forums, tell you most of what you need to know

Consider this:

An EA will trade according to strict MM rules, and with perfect discipline. Writing an EA that “enters every emerging move, cuts losses short, lets profits run, and risks only 1% (or 2%) of your account per trade” is a very simple algorithm to program. An EA will trade 24/7, executing a plan flawlessly, consistently, tirelessly, emotionlessly. It removes the trader, his mindset, and any lack of self-mastery, from the equation altogether. An EA automatically guarantees all of the following: Adherence to strict MM rules. Perfect accuracy of execution. Endless patience. Unwavering discipline. No fear, greed or hesitation. Immunity from hunches, guesswork or outside ‘noise’. Around-the-clock trading that’s unaffected by tiredness, illness, stress, negative attitudes. No data entry errors. Much more recreational time for the trader, away from his PC.

But I think it’s fairly obvious that, if long-term profit was this easily attainable, then everybody would own such an EA, and we’d all be forex millionaires.

So here's my point: If MM and discipline are all that’s needed, and an EA addresses them perfectly, why do the vast majority of EAs ultimately fail? The answer is much the same reason why 95% (or whatever the number is) of traders do likewise. Their ‘market knowledge’ of how, when – and possibly why – prices move, simply isn’t good enough. Their analysis isn’t intelligent or accurate enough to locate ‘on-balance’ profitable price patterns, cycles, or behavior that’s potentially robust enough to last a lifetime. Or, failing that, they’re not smart enough to periodically evaluate whether such an inefficiency is still operating as profitably as it did previously, and if necessary adapt accordingly."

end-of-quote

It is so easy for developing traders (like I have done and may still be doing) to delude themselves into thinking that they DO have a winning methodology and it is because of their lack of psychological "prowess" that they are not consistently profitable. Our human nature and cognitive biases will cause us to mistakenly interpret our results to support whatever hypothesis we have about the importance of psychology vs. method. My message to developing traders is this: Do not delude yourself into thinking you have a winning methodology until you do. Psychology and method must evolve together and psychological "prowess" will only come into line when you gain confidence that your approach *WORKS*. You will only get to this point after you've put in enough screen time using a consistent approach - this is why Mike's challenge to leave everything the same for two weeks and Gary's excellent post here are both critical to understand.

Surly

Reply With Quote
The following 12 users say Thank You to Surly for this post:
 
  #263 (permalink)
Membership Revoked
Oslo, Norway
 
Futures Experience: Advanced
Platform: CQG, Excel
Favorite Futures: CL
 
Lornz's Avatar
 
Posts: 1,198 since Apr 2010
Thanks: 500 given, 1,235 received



jstnbrg View Post
The poster makes a good point. Almost all great pit traders that I knew could be very creative in getting out of bad trades. I was like that. Sometimes I would just take a loss, but often, for example, if the yield curve was very strong and I was long Five Year Notes, I would sell 30 year bonds against the trade and then just wait a long time. If the curve continued strong (and why shouldn't it, I'm basically saying it was a trend day) I could often scratch a bad loser. Of course, unless I continued scalping, I would forgo profit opportunities while I was waiting, often in the end a bad deal for a relatively high frequency trader. Guys who traded the curve for a living usually averaged into trades; their first entries on a FITE (five year/ten year spread) were often initially bad, and they would add more units at "better" prices, or they would "butterfly" off the trades, selling NOBs (ten yr./thirty yr. spreads) against their bad FITEs.

Sometimes I would have on a FOB that I had done deliberately, not selling 30 yrs. against a bad 5 yr. position but because I liked the trade, and it maybe would be a disaster. If one side of the spread was trending and the other was not, I might get out of the loser and just let the winner run. It was amazing how many times that worked, and often I'd go for a much larger profit on the good leg than I usually took while scalping. It was in the category of "heroics".

Many years after the fact, my reaction to this seat-of-the-pants risk management is like the car ad where the caption warns "Professional driver on a closed course, don't try this at home". It's bad trading for all but the best capitalized and experienced traders, because if you are successful a couple of times you forget about your discipline. When I did it in the pit I still set myself an absolute "get out" point.

In my opinion, all trades can be categorized in one of 4 ways, each of which requires a different exit strategy. The four categories are, 1: a good entry level with a well conceived trade, 2: a poor entry level with a well conceived trade, 3: a good entry level with a poorly conceived trade, and 4: a poor entry level with a poorly conceived trade. In the first case the trade will never be much against you and you squeeze the trade for a large profit. In the second, you can afford to wait even though you initially take heat because the market will eventually make you whole. In the third you may get a quick profit, and you should take it because time is going to turn the trade against you. In the fourth you should take your loss the second you realize it was a poorly conceived trade, because time will just make it worse. The big trick is recognizing case 3, because the profit may blind you to the fact you made a mistake. I realize that some of this may seem odd to the non-pit trader; why would someone make a poorly conceived trade? The reason is because in the pit we did not always get to choose the trades we made. Our job was to create liquidity and that meant often taking trades we did not like. This was especially true in the 30 Year Bond pit. Harris Brumfield, founder of Trading Technologies and a truly great trader with cojones the size of watermelons, left the bond pit because brokers were constantly taking him out of trades he wanted to be in.

A question about these trading rooms, as I've never been in one: can you talk to the moderator? Can you ask him what he saw this time that made him deviate from his rules? If not, what are you paying for?

Thanks for sharing. I attended a seminar in Chicago a few years a back and I visited both the CBOT and the CME. It was quite an experience. Ben Lichtenstein of Traders Audio gave us a tour of the CME, it was really exciting to actually get to walk on the trading floor. I can only imagine how active it was in the "good ol' days".
I find it ironic that a lot of floor traders struggle to adapt to screen trading; I wouldn't have lasted five minutes in the pit!

Reply With Quote
 
  #264 (permalink)
Membership Revoked
Oslo, Norway
 
Futures Experience: Advanced
Platform: CQG, Excel
Favorite Futures: CL
 
Lornz's Avatar
 
Posts: 1,198 since Apr 2010
Thanks: 500 given, 1,235 received


Surly View Post
I hope this post is "on topic" enough for this thread...

I'm posting because the discussion of the importance of psychology has been critical for me and also very difficult for me to understand during my development and posting here will help me reinforce my own beliefs. My premise is that psychology becomes important only once a trader has developed an edge and that developing an edge is actually the most important (and difficult) piece of the puzzle in becoming consistently profitable. I think that developing traders would do well to understand that no amount of discipline, self-control, and clear thinking will help them until they have a robust method with a positive expectancy. That said, a developing trader will never be able to develop a robust edge without removing, at least to a large degree, the mistakes (both in perception and execution) that stem from insufficiently developed psychology. This may seem like a chicken-and-egg cop-out on the fundamental question but I think the distinction is important to consider.

We all know that it is easy to pick winning trades but that trading profitably on a consistent basis is a different beast entirely. So why do I think developing a method with a positive expectancy is more important than perfecting psychology? A post in forex factory I've kept with me from David Hanover (he's an excellent source of good thoughts on the subject of trading) mirrors my thinking:

"This must be about the 99th time I’ve posted this type of message.
It’s addressed to all of those well-meaning folk who believe that:

-- you can succeed in forex with MM and discipline alone
-- the system doesn’t matter; it’s all about the trader, his mindset, and his mastery of self
-- it’s possible to profit in the long term by using random entries
-- trading psychology books (like Mark Douglas'), and/or clichés posted on forums, tell you most of what you need to know

Consider this:

An EA will trade according to strict MM rules, and with perfect discipline. Writing an EA that “enters every emerging move, cuts losses short, lets profits run, and risks only 1% (or 2%) of your account per trade” is a very simple algorithm to program. An EA will trade 24/7, executing a plan flawlessly, consistently, tirelessly, emotionlessly. It removes the trader, his mindset, and any lack of self-mastery, from the equation altogether. An EA automatically guarantees all of the following: Adherence to strict MM rules. Perfect accuracy of execution. Endless patience. Unwavering discipline. No fear, greed or hesitation. Immunity from hunches, guesswork or outside ‘noise’. Around-the-clock trading that’s unaffected by tiredness, illness, stress, negative attitudes. No data entry errors. Much more recreational time for the trader, away from his PC.

But I think it’s fairly obvious that, if long-term profit was this easily attainable, then everybody would own such an EA, and we’d all be forex millionaires.

So here's my point: If MM and discipline are all that’s needed, and an EA addresses them perfectly, why do the vast majority of EAs ultimately fail? The answer is much the same reason why 95% (or whatever the number is) of traders do likewise. Their ‘market knowledge’ of how, when – and possibly why – prices move, simply isn’t good enough. Their analysis isn’t intelligent or accurate enough to locate ‘on-balance’ profitable price patterns, cycles, or behavior that’s potentially robust enough to last a lifetime. Or, failing that, they’re not smart enough to periodically evaluate whether such an inefficiency is still operating as profitably as it did previously, and if necessary adapt accordingly."

end-of-quote

It is so easy for developing traders (like I have done and may still be doing) to delude themselves into thinking that they DO have a winning methodology and it is because of their lack of psychological "prowess" that they are not consistently profitable. Our human nature and cognitive biases will cause us to mistakenly interpret our results to support whatever hypothesis we have about the importance of psychology vs. method. My message to developing traders is this: Do not delude yourself into thinking you have a winning methodology until you do. Psychology and method must evolve together and psychological "prowess" will only come into line when you gain confidence that your approach *WORKS*. You will only get to this point after you've put in enough screen time using a consistent approach - this is why Mike's challenge to leave everything the same for two weeks and Gary's excellent post here are both critical to understand.

Surly

Great post! This sums up my stance perfectly.

I think there might be some confusion, or possibly disagreement, with regard to terminology .

Poor risk and money management might, or rather will, ruin a profitable system. But there has to be a an edge to begin with. To say it's easy to find a system with positive expectancy is a fallacy, and I think it's dangerous for traders to delude themselves with such thoughts.
Know what your system is. Discretionary traders are actually using an automatic system too. They're relying on the pattern recognition and modelling done by the marvelous biological computer that is our mind. Intuition comes from the subconscious and/or unconscious mind. This means one can not necessarily easily quantify one's method, but it does not mean calculations aren't being performed.
If you have a profitable method, you can program it. There would be no discretion needed. If you can't program it, that means your system is a grey box. The grey, in this case, is referring to your own grey matter. It might be that the process is subconscious and one can "dig up" the information if one tries, or your impulses might stem from the unconscious mind and you are at the mercy of the unknown.

It's impossible for a retail trader to compete with the HFT machines, but it's not impossible to run profitable algorithms from one's own home. The opposite is usually perpetuated by those who failed develop such algorithms.

In both cases psychology plays a big part. You need rational and logical thinking to be able to trade either way. If one's perception is not clear, one will not be able to develop and/or execute a solid system.

Good luck, and good trading!


Last edited by Lornz; April 27th, 2011 at 06:22 AM.
Reply With Quote
The following 3 users say Thank You to Lornz for this post:
 
  #265 (permalink)
Membership Revoked
 
Futures Experience: Beginner
 
Posts: 1,081 since May 2010
Thanks: 2,092 given, 595 received


Lornz View Post
Thanks for sharing. I attended a seminar in Chicago a few years a back and I visited both the CBOT and the CME. It was quite an experience. Ben Lichtenstein of Traders Audio gave us a tour of the CME, it was really exciting to actually get to walk on the trading floor. I can only imagine how active it was in the "good ol' days".
I find it ironic that a lot of floor traders struggle to adapt to screen trading; I wouldn't have lasted five minutes in the pit!

That's because the edge that pit traders used is gone completely on the screen. Fortunately.

Reply With Quote
 
  #266 (permalink)
Membership Revoked
Oslo, Norway
 
Futures Experience: Advanced
Platform: CQG, Excel
Favorite Futures: CL
 
Lornz's Avatar
 
Posts: 1,198 since Apr 2010
Thanks: 500 given, 1,235 received


MetalTrade View Post
That's because the edge that pit traders used is gone completely on the screen. Fortunately.

Yes, I am aware of that. I was just pointing out that I would be eaten alive in such a stressful environment, regardless of edge...

Reply With Quote
 
  #267 (permalink)
Membership Revoked
 
Futures Experience: Beginner
 
Posts: 1,081 since May 2010
Thanks: 2,092 given, 595 received


Lornz View Post
Yes, I am aware of that. I was just pointing out that I would be eaten alive in such a stressful environment, regardless of edge...

Bah, strange remark. In fact, I think the stress level on the screen is bigger, because it's harder to make money.

It was way easier for the boys in the pit to make money.

Reply With Quote
 
  #268 (permalink)
Membership Revoked
Oslo, Norway
 
Futures Experience: Advanced
Platform: CQG, Excel
Favorite Futures: CL
 
Lornz's Avatar
 
Posts: 1,198 since Apr 2010
Thanks: 500 given, 1,235 received


MetalTrade View Post
Bah, strange remark. In fact, I think the stress level on the screen is bigger, because it's harder to make money.

It was way easier for the boys in the pit to make money.

I don't get stressed when it comes to screen trading, I actually find it soothing. The vastness of information easily accessible by a keystroke gives me a "zenlike" feeling of being in control. On the other hand, having people yelling and shoving me around, I find quite stressful....

Just to clarify, I grew up playing sports and the problem is not that I am physically impaired. It's just that, at least for me, trading is an intellectual exercise. And my intellect is far more efficient in less disturbing atmospheres. I'm not claiming that my experiences are indicative for all traders, I simply conveyed my thoughts on the subject from a personal perspective...

Reply With Quote
The following user says Thank You to Lornz for this post:
 
  #269 (permalink)
Elite Member
Castle Pines N, CO.
 
Futures Experience: Advanced
Platform: NinjaTrader
Broker/Data: Amp Futures/Zen-Fire)
Favorite Futures: ES
 
Posts: 201 since Jul 2009
Thanks: 196 given, 124 received

Battle of the BOTS, pure execution/ rules no psycho

I find it amazing that more don't follow the "Battle of the Bots" since this shows pure rules/execution at its core. Maybe there is a big silent majority following these? no psycho involved /flawless execution .(2/3 of the grail? )..

Reply With Quote
 
  #270 (permalink)
Elite Member
U.S.A
 
Futures Experience: Intermediate
Platform: mt4, NT
Favorite Futures: CL, TF, 6E
 
Posts: 8 since Sep 2010
Thanks: 6 given, 1 received


The comments here reaffirm my belief, no matter what the percentages of success vs. failure or method used, that trading is still the hardest way[path] to make[ing] an easy living.

Reply With Quote

Reply



futures io > > > Primary source of income: how many have made it?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
A new (open source?) trading platform Big Mike Platforms and Indicators 140 January 6th, 2017 03:15 PM
Income while learning to trade MWinfrey Traders Hideout 25 December 12th, 2011 08:11 AM
Zenfire C# API with source code tinkerz Reviews of Brokers and Data Feeds 3 July 24th, 2011 02:35 AM
tick data source kittyan Traders Hideout 5 July 25th, 2010 03:43 AM
Primary URL change, from forum to www Big Mike Feedback and Announcements 1 January 15th, 2010 05:24 PM


All times are GMT -4. The time now is 01:26 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-14 in 0.20 seconds with 20 queries on phoenix via your IP 54.234.255.29