Futures are the toughest instument to trade. Leverage is a double edged sword, it looks easy to make a few points a day but it's just as easy to lose that amount. You also have to deal with the spread and the commissions.
Anyone here actually profitable?
- Thread starter Rutro
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Yes I’m profitable but I have had some down quarters and it’s important to remember that you’re not going to get everything right.
Strategy research and development should take 6-12months and then be a constant feature of your trading. Profitability depends on your strategy — are you trying to harvest betas or capture alphas? Very different game and different benchmark.
If you’re just trying to generate wealth then you need to start with broader asset allocation, add a tactical dimension, and then search for alphas within each asset class.
If all you’re doing is chart reading NQ or ES then good luck LOL.
Strategy research and development should take 6-12months and then be a constant feature of your trading. Profitability depends on your strategy — are you trying to harvest betas or capture alphas? Very different game and different benchmark.
If you’re just trying to generate wealth then you need to start with broader asset allocation, add a tactical dimension, and then search for alphas within each asset class.
If all you’re doing is chart reading NQ or ES then good luck LOL.
A trading edge is a 'misnomer', profit means can anyone produce Alpha above a benchmark namely inflation or S&P, very few can do this usually targeting 1-2% per month above zero not benchmark, today they will be lucky to hit half that but they define it as profitable, which it's not but makes a good headline for something to talk about while helping them feel they are 'succeeding'.
Everyone is following 'the flow of money', but they can only do it at a specific standard deviation level, if they try to curve fit to another standard deviation they induce drawdowns and losses not just to profits but also capital, this is what basically happened to Livermore.
What I do differently is that I help setup, incubate, trade family office and hedge funds as well as my own accounts, by having access to a fund management platform at both trading and investing grade using institutional fintech, it has strategies that covers all core deviation levels in the markets.
They were going to provide access to it for traders along the lines of Bloomberg $2k/mth but found the problem is when you give a multi-level platform to people who can only trade one level, which is everyone, they over trade trying to take all setups, the key is you still only take one level as the trade foundation, which can in this case be any level on that timeframe, but you can layer in to the trade at the other levels increasing profits 2x, 5x, 10x.
The net effect of this is that you can pick your own Alpha to generate, 50%, 100%, 200%, depending on how hard you want to work that day, week, month, year, this is the part I like the most, however this doesn't come for free as the drawdowns can increase with higher returns profiles creating more market exposure if you mistime the entry as the foundation changes, fortunately I have the experience to offset this.
What you are seeing in every book, in every comment, is their micro view in to the money flow but as they do not have the entire picture their end goal is to make sure their profits compensate the losses, which nets out to a return on capital, basically one level will only cover 10-15% of market moves hence every trader's approach is to reduce the losses on the other 85-90% to below their profits, called a strategy.
Stocks will make you more profit but need capital, Futures usually offer the best return on capital, Forex is usually better for diversification, true professional trading is intensely boring requiring a simple stress free life to compensate taking trades, I live near the beach in 72f most days just going for a walks and having a coffee, if you read about top-tier airline pilots on large commercial jets then that is the equivalent, algos do most of the work for me, all I need to worry about is takeoff, landing, training for unexpected events and there's enough fuel (money management).
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Thanks… just trying to give you another option. It took me a long time and a lot of pain and loss to figure this out.
You're right about profit. Interactive brokers says the profitable/unprofitable split is between 40/60 and 50/50: https://www.interactivebrokers.com/en/general/about/performanceCustomerForex.php
What they fail to mention is how profitable are the profitable accounts. Does having $1 in profit count as a profitable account? How much are they profitable over benchmarks? I can never seem to find this data. The term "profitable" seems meaningless when you actually think about it.
In regards to deviation levels, is this because most traders are just focusing on scalping a few points or using charts to time entries/exists without being able to see the whole picture? I think I understand what you are saying in regards to losses as well, almost as if the setup works 10-15% of the time due to market conditions, the remainder of the time is trying to protect against drawdown when market conditions are not there and the setup no longer works.
I get the feeling that having a deep, contextual understanding of world markets would be a far better predictor of success than backtesting strategies (which seems to be the most common strategy of most people). I don't see how computing when to buy or sell can hold relevance to knowing how money is changing hands at a large level. I could be wrong.
Do you mind if I ask how long it took you to get to your level, and if you had help or did this completely on your own? Does it take a village or can a lone genius do it? I get the feeling that if I had just gone and tried to work at a trading desk at a bank I'd be leagues ahead of where I am now. Almost as if I have to go where the action is and quit wasting my time going over stats on previous market movements.
If someone like me were willing to go "all in" and become a fanatic about making money, is there places to go and people to talk to that might open doors? I get the feeling that people trading for years and putting in all this effort is them mostly just doing random things that don't make sense and not really putting in the intense, focused effort required. I'm ready to go the distance but need a target to aim at, if that makes sense.
To answer for me is a qualified yes. Swing trading yes. It is basically investing short term. It is pretty simple actually, the problem is it ties up too much capital and risk adjusted there are better choices.
You are asking is it achievable for you, with the time and resources limits you are setting.
I would say NO. You mentioned dozens of books. Try over 100 books. You only get one or two insights per book, imo. You mention your psychology and discipline. I question if that enough. Maybe enough for some endeavors, but not for trading. No trader who succeeds:
- Gives up that easily or even consider it so early.
- Considers the money primary motivation. We are concerned with the nuts and bolts of trading. If you get that right the money arrives. That is BASIC trading mindset.
- You cannot develop a novel strategy. Nor can you cobble parts of ones together. This shows a lack of skill. A lack of trading acumen.
- You have not learned and corrected from your trading losses. Everyone fall down, it is what you learn from it and how you keep on moving forward.
Don't feel anything about these comments. Trading is a HORRIBLE fit for many, if not most people. You might be awesome taking on something you actually enjoy and understand.
Best of luck.
Thats the thing, trading looks really easy. All those big moves look easy in hindsight.
In reality you get stopped out very often, on half your trades or more.
So 8 points a day is unrealistic, aim to be happy averaging only 20 ES points per month.
Netting just 20 ES points a month with 50 lots = $50,000 a month.
But first you got to average 20 points a month with 1 ES lot, that is $1000 a month, can you even do that Not many wannabe traders can pass such a simple challenge. The losing trades are what gets them and they end up losing what little discipline they had after the first string of losses.
Will all due respect stick with just giving advice on trading stocks - your forte.
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All very good points, you will not find true profitable numbers anywhere (measured against benchmark for Alpha) because it's below 1%. The levels are to do with the money flow and net worth/aum, a person or fund and often institution can only target one level, yes contextual understanding always outranks backtesting because the markets usually rhyme but rarely repeat.
The hedge fund architecture was built over a decade timeframe by some of the best architects in the world who consulted at board level for the largest banks, oil, gas and insurance multi-nationals, it is not possible to build that yourself without C-Suite knowledge, the closest you can ever get is eSignal GET (Elliott Wave) but even then it's only an 80% solution and you need 95% as a minimum these days, I used the system before eSignal bought them out, it was excellent because it was simple and focused, not so much via their integrated platform.
The only option for everyone is to perfect and protect one level (deviation) of returns and limit the losses the rest of the time for a given timeframe set, 1hr/4hr/1dy are usually good starting points, everyone has a solution that works for them with only a fractional amount transferable to someone else, working for a bank and you are the fraction in the ecosystem, the difference is having access to the fintech, to the knowledge base, to the money management, for some it works, for others it doesn't, usually they switch to another bank to maintain access unless they have deep connections to set up their own fund.
I’m kind of between situations the past months, I spent over a year setting up and incubating a hedge fund for someone but even though the wealth managers told them what to do they kept getting corona, and ignoring the consultants requirement to scale back their expectations from 100% to 50% for the fund to limit over trading and limit investor demands, it was their platform after all .
Now I'm in the slow process of fund managing myself which takes a year and more, but am struggling how intensely uninteresting 15-20%pa is as it's close to income, so the wealth managers and architects came up with a pure Alpha approach over benchmark this year to generate capital, however still need to exclude most people via KYC simply because low levels of initial capital (under $10,000s) means the fee on Alpha over benchmark needs to be 50% and above.
The markets are designed to make sure you do not succeed, you can generate income via a single deviation level where everyone calls 1-2% per month over zero benchmark success except it's not transferable to the next person, but it seems like that's not what you are looking for, you want to generate capital (the 2x 5x 10x). That needs you to be able to see the money flow in the markets and then 'tag' the moves layering in to them, we use a database which exchanges themselves use to process the data for the algos in realtime to show the flows before (based on probability) and as they happen on all levels, everyone else will see them at 85% to 100% completion on a single level, that's the difference between capital and income.
Here's a little fact of life, if you try and make it better you will invariably make it worse which is where debt comes in because that's the ultimate goal of taking on debt, it's difficult to service with income and ultimately needs capital, everything you will come across in the markets is to create income (single level visible at 85% to 100% of move completion), I ran family offices for people creating capital using the architecture which dropped the timeline down to months, even with access to architecture and algos it would take you 2yrs to learn how to create capital, on your own it would be up to 10yrs because you have to design and build it yourself (there is nothing publicly nor privately available to help you), income is great to survive, but if you want to live you need capital!
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