I do not believe their is one person who is a member of this web site that get's his money from trading. That's my opinion. But I back it up with the fact that not one person can prove it.
Look, if someone was in my face about not being a successful trader, and asking for proof, I'd get on a plane or a car or a bicycle to get to your front door, and shove it in your face. I would shove it in your face. No more sentences written about how funny it is for someone to even ask the question, nothing else said, just shove in your face.
Why would someone who's successful go out of their way to shove anything in your face other then their balls? Being so enthusiastic at having something in your face it would be hard to resist letting you have a go.
1. Is trading your primary source of income?: Yes.
2. Do you make over $100k/year in trading? Yes.
3. How long did you trade prior to making trading your primary source of income?: 5 years.
4. Number of years trading?: 10 years.
What you did not ask was:
5. What was the total cost of your trading education (how much money have you lost)?: $20,000.00.
6. Before you became a full-time trader, how many times did you feel like quitting?: 2 times.
7. Are you on a Retail or Institutional trading platform?: Institutional (65%). Retail (5%).
8. Do you hold cash in assets other than the primary instruments that you trade?: Yes. Gold & Platinum (30%).
9. What difficulty ranking (1 Very Easy - 10 Hardest Thing I've Ever Done) would you give to becoming a successful trader?: 10.
10. What was the worst drawback of becoming a successful trader?: The toll it took on family. The hours spend working were beyond anything a human being should have to do.
11. If you had to do it all over again - would you?: I don't know how to answer that question. I just don't know. It has been a difficult and highly stressful process and the cost was very high.
12. What's the largest purchase you have made with revenue from your trading business?: An undisclosed amount (literally - it was undisclosed by contract).
13. Are you now happy with your career choice:? Yes. However, it was a very difficult road to travel personally, given the level of work involved.
14. Would you encourage others to become traders?: Yes, under several conditions.
a) That the individual be single, not married and without children when they begin their study and research.
b) That the individual be in control of their emotions to the extent possible.
c) That the individual have no lingering heart or coronary problems.
d) That the individual be of sound mind and good judgement.
e) That the individual be of high ethical standing and intellectually honest.
f) That the individual have the capacity for long durations of mental focus and concentration.
g) That the individual have excellent organizational skills.
h) That the individual have an excellent strategic thought process.
i) That the individual have the natural capacity to think outside the box of convention.
j) That the individual have a natural capacity for creative thought.
k) That the individual have the capacity to maintain health work habits.
l) That the individual have a good reason for wanting to become a full-time Trader.
Some may be wondering: "what about having sufficient capital to start - don't you need that?" The reason I did not list that, is because with today's trading technology, you really don't need it. You can get very accurate trading simulation with the current technology now available, that was not available 20-30 years ago, when all you could do was paper trade.
Today, you can derive the same tactile sensation and some of the same "emotional" sensation that you can with trading a live account. Of course, the emotional variable goes up with real cash on the line, but that can be done with a smaller amount these days.
For example: I reserve 5% of my capital on a retail trading platform, expressly for the purpose of trading new concepts that I integrate into a research version of my active trading system. So, I don't lose the tactile sensation and I have a little real money on the line. This keeps the appropriate neurons in my brain firing when they are supposed to - which I would not get with pure paper trading. So, you do need some real cash trading experience before going live with 100% capital, but that can be done these days with a relatively small outlay in a retail test account, just to make sure the neural networks in your brain are properly trained.
Pure paper or pure demo trading, if done over a prolonged period of time, does not allow for full neuron (neuro network) development, which is vital to being able to rely upon the decision making process in real-time cash based trading. The neurological aspects of trading (decision making) won't be fully understood or fully appreciated by the new trader. But, the first time they put real money on the line, after spending an untold amount of time developing their system or methodology, the concept will become crystal clear to them.
You have to train your brain to handle the business of training, too. A very much overlooked and underrated topic, but one that the new trader should learn to appreciate before they get too deep into Demo/Paper Trading. In fact, I would say to skip the Paper altogether and just do Demo mixed with a small (real) Cash account. Your brain has to get up to speed in the idea that real cash is on the line and the decisions have to be consistent, just like in Demo trading.
Just ask any athlete to put this into perspective for you. You're live performance will be very much the way you practice. Trading is a business and it is meant to be taken seriously. No different than any other serious minded business.
I hope that this helps the dialogue somewhat.
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If 95% are failing, as the saying goes, then that means that all of the businesses dependent on new traders (new blood), has to basically replace 95% of its clientele every X number of weeks, months or years. Of course, the rate of wash-out will be staggered through time, so the rate of replacement will be the same. It is not like on Tuesday, October 2nd at 5pm local, a particular Broker will have to replace 95% of its customer base - that's not what I'm saying. But, I am saying that at some point that year, they will have replaced 95% of their client agreements on file.
I don't even think McDonald's has that kind of new customer turn-over rate - do they? It seems very high on the surface. So, how can what is supposed to be a much more stable business model, have such a turn-over?
I agree with almost everything you said, until you typed that line above.
It's funny, when you stop to think about it - all the different experiences that people have had down through the years. I really (honestly) don't know of any other way to not just make money, but build real wealth, than from trading. I think it really depends on the edge that one ultimately develops and how much of what they have learned, they can then apply to their trading.
Example: Let's take two traders, Earl and Jane.
Both have been conducting research on their respective trading system and/or trading methodology for exactly the same length of time. Both are technical traders. Both strongly believe in the absolute need to verify and certify their trading ideas and theories through rigorous back testing and forward testing, over equal periods of time. Both come from very disciplined professional backgrounds and so both bring to their respective trading, an equal amount of mental focus, acuity and decision making ability. Both start with $30,000.
In less than 5 months, Earl is down to $5,000. In that same time span, Jane, is up to $55,000. What happened - they were thought to be equally matched technical traders?
Well, both do have a tremendous amount of research, testing, analysis, verification, design, development, engineering and implementation of their respective systems under their belts. No doubt, they both worked very hard in developing their systems. However, like all human beings, some of us do things a little bit different.
You see, when Earl was conducting all of his back testing, he did the same thing that Jane did. They both tracked the MFE/MAE ratio in their back testing. However, when Earl, set-up his forward testbed, he dropped the MFE/MAE ratio capture, so only Jane was getting that performance data.
Well, when you dump both Earl's and Jane's order history into Excel and you analyze the Stop/Limit locations on all of their trades, something starts to stick out like a sore thumb. When Earl was conducting his back testing, he used a different Stop Level for each of the different trade types that he made, that were based on his pain tolerance threshold (how many times have we heard that). Earl, also used a different Limit Level that had to do with his "feelings" about how much he should be making as a trader.
But, when we look at Jane's performance, we can clearly see that she used a Stop Level that was a percentage (%) of the high range of the back tested MAE and the forward tested MAE. Jane also adjusted her Limit Level, using a similar algorithm based on both the back tested and forward tested MFE data.
Fewer of Jane's trades got stopped out and more of limit levels got struck, while more of Earl's stops got hit and fewer of his limit ever came to fruition.
Both people were very capable traders. Both people put in the same amount of time, hard work and dedication. Yet, only one managed to figured out the importance of using a Stop and a Limit, that conformed to the market's technical tendencies, as opposed to how they felt about the trade, their tolerance for "pain" and how much the thought they should be making as a trader.
Moral of the story?
We spend so much time searching for that 100% perfect system, that we often times forget about the natural tendencies and dynamics of the market in relationship to the trades we make and our reason for being in the business in the first place - which is to walk away from every trade with profit that is inline with what the market will yield.
Jane, is on her way to becoming a full-time trader, while her counterpart who was every bit her equal, will probably blow his remaining $5k, less than a month later.
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Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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The following user says Thank You to Big Mike for this post:
The way I see it, all you need to be successful is a system with an edge (a positive expectancy) that addresses money management, and that fits well with YOUR attitude to risk, your account size and trading goals.
Then it becomes "95% psychological".
Just my opinion of what I think it takes to succeed.
Regarding taking advice from someone who is "below" you or who is a newbie - well, you wouldn't of wanted to of dismissed that person's advice if he was Warran Buffet just starting out in his career!
That newbie may possess knowledge and education that is superior to yours, so it's not wize to dismiss someone just because you've been in the trading game for a longer period of time.