Can an average guy make a living at trading?

Ed,

Here are my views... even in the most benign market conditions, it has not been possible to be merely average and make a living trading... trading appears deceptively simple, overbearingly deceptively simple, and the dream of making it big in trading continues to draw in the crowds of neophytes; the relative handful who have survived, and the even smaller handful of us who have actually made a living out of this game were once neophytes ourselves, and were similarly drawn in by grandiose visions of being the best trader on the planet... "surely, failure couldn't happen to me?" is the usual thought process...

Well, let's be blunt... it has always been my solidly held view that the vast majority of people perusing these boards are net losers... there are just too many levels of difficulty and too many areas that need to be mastered for the majority of traders here (or anywhere) to be net winners... in order to be joyfully immersed in the simplicity of trading, you need to successfully traverse the minefield of the complexities of trading... anyone who has been trading for a while will know precisely what I mean by this...

The thread originator asks about the "average"... another way of asking if the "average" guy is able to make it at trading is to ask if 50% of traders are profitable... this is clearly not happening... the average guy cannot make it, until he stops being average... trading is simply not a game for the average guy... if you want to make a living as an average guy, get a salaried office job... in normal (current) market conditions, I suggest that the intraday learning curve could take up to 2 years before a guy is in a position to simply know whether or not he has a viable shot of making it as a trader... those first 2 years are likely to be breakeven at best, and more probably net losing years (hence the pre-requisite to be handsomely capitalized at the onset)... and even after the first 2 years, the odds are still stacked against a well-capitalized trader becoming consistently profitable...

These are the views of a guy who started out being blessed by fantastic market conditions who made a lot of money and then slow bled a significant chunk of it away as market conditions normalized... it was then that I had my arduous learning curve... it's possible to make a great living at trading, and several of us here are blessed that we have successfully emerged out of the dark tunnel of pain into a life of consistent trading success... for those of us who have, I guarantee you that not one of us will state that the journey has been easy enough to warrant a claim that trading is for the average guy...

Be a realist... recognize the overwhelming probability that you will be a failure, but strive to defy the odds by using a highly surgical approach to conquer the multiple skillsets required to succeed...

May your journey bear your sought destination...

Candle
 
In the game of trading there is only Excellence or Failure. Failure as far as I'm concerned can take three forms: 1) blowout, 2) slow bleed, 3) breakeven or not enough profits to meet your basic needs. There is virtually no middle ground in this business. A trader who is merely "average" is statistically a loser. 85% of all traders consistently lose money. 10% make a small amount, but not enough to live on. And only 5% make a good living from trading. Therefore, the "average" trader is a losing trader. I wish the numbers were better, but they're not.

Does this mean, however, that if you are average right now you cannot attain excellence further down the road? NO. If you are *truly* committed, are willing to work hard (on yourself just as much as on your trading), and you have a love for trading the markets that is your burning passion, you might just have a chance to achieve excellence.

Here is a little tidbit that I think is important: There is absolutely no subsititute for experience in the business of trading.

PEG LEG
 
Quote from candletrader:




The thread originator asks about the "average"... another way of asking if the "average" guy is able to make it at trading is to ask if 50% of traders are profitable... this is clearly not happening... the average guy cannot make it, until he stops being average... trading is simply not a game for the average guy...

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Great point.
 
Quote from easyrider:

Ed
Youve got about as much chance as a frog on the freeway at rush hour. If that doesnt discourage you then jump on in.
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lol

just the other day i was driving down a pretty busy street and i saw, of all things, a damn TURTLE trying to get across. it was right in the middle of the road.

being someone who doesn't even kill bugs, i wanted to go back and help it across...but then i realized that by the time i got there, it would probably be too late. :-/
 
Quote from peg_leg_joe:

85% of all traders consistently lose money. 10% make a small amount, but not enough to live on. And only 5% make a good living from trading. Therefore, the "average" trader is a losing trader. PEG LEG
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Can the 10% borrow money from the banks to double or triple their income ? After all, trading is a business, most founders of an enterprise need to borrow money at the beginning. Just curious.

:p :p :p
 
To make a living off trading is no harder or easier than creating a small business that is functional and profitable.

To make a good living off trading is no harder or easier than creating a good small business that is functional and very profitable.

You need capital, knowledge and the correct attitude to trade.

So if you insist on trying your hand, expect that just like the start up of a small business, you will have no income for quite a while and plan for the worst - a cut loss point for giving up.

No one is good at everything. If trading is not for you, there are plenty of things to do.

BTW, trading is very addictive :)
 
Quote from candletrader:

The thread originator asks about the "average"... another way of asking if the "average" guy is able to make it at trading is to ask if 50% of traders are profitable
More...
That would be a paraphrase of the thread originator's question if his question was, "Does the average *trader* make a living?" By asking if the "average guy" can make a living at trading, he's asking if someone along the mean in skills, smarts and resources can have what it takes to trade for a living. That's even before if and when that average guy becomes an average trader, no? BTW Candletrader, this is not a knockdown of your post, which I thought was excellently written.

To EliteEd, I'd recommend reading first. "Trading in the Zone" by Mark Douglas to get the mindset, and Tharp's "Trade Your Way to Financial Freedom" basically for the position sizing ideas, which may be new to him. Then, after learning about indicators, oscillators, patterns and price, don't daytrade. Position trade small amounts, and see how you do. When you get real good at it, then maybe you'd wish to consider daytrading. By then, you'll be much more the trader and able to know more about what you're getting into.
 
My advice to anyone starting out is learn to Swing Trade. You can use a simple MACD, channel and trend lines to help you time your moves. That way you will not churn up your account with daytrading, nor stay in too long.
My suggestion is to trade QQQ or SPY or DIA. Little lots to start with. Individual stocks are harder to do. :D
 
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