Can an average guy make a living at trading?

Candle-


Bravo! very well stated. I'd like to add one thing to that line
of thought, because I wholeheartedly agree. That is to say, consider
at the onset of your journey before encumbering the "overwhelming"
odds, that you seek out a successful Trader. A Trader of any market.
So long as he/she is consistent and has say.. 10+ years of exp.

This can/will put you light-years ahead.
I'm speaking here from my own exp., and what my mentor did for me mentally as well as technically, gave me an edge right out of the starting gate.

Some coming to this board looking for, "Getting Started Advice" may be very bright, very sharp people. Might even be well capitalized-100K+. Even so, the benefits of learning from someone whose made some serious mistakes as well as made some very right choices are obvious. a.k.a. - Why reinvent the wheel...


Focus, discipline, patience and above all persistence will tilt the odds in your favor as well.


all the best to you-



momo



Quote from candletrader:

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
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The Report!
All trading in the accounts was analyzed and evaluated (4,093 trades in 26 accounts). Seventy percent of the accounts lost money and were traded in a manner that realized a 100% Risk of Ruin (loss of all funds).

Only three accounts of the twenty-six evaluated (11.5% of the sample), evidenced the ability to conduct profitable short-term trading.

The statistically significant day trading (2,754 trades in 17 accounts) was evaluated. Sixty-five percent of the accounts lost money and were traded in a manner that realized a 100% Risk of Ruin (loss of all funds)

There was only one successful day trading account in the 17 accounts analyzed, and this account did not have trading returns commensurate with the risks to which the account was exposed.

The most successful account in the study had limited short-term trading and no day trading.
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Here's a few things that have helped me greatly:

1. I think the #1 thing that kills you when you're beginning is the varied market conditions that occur in the course of a typical year. You have to change your thinking as the market changes personality and this is often seems counterintuitive when you're starting out.
2. Take the advice of some of the successful traders on this site (particularly in past threads). You'll quickly learn which ones know what they're talking about and which ones are just trying to sound impressive. Their good advice has saved me hours of wasted time.
3. You'll find that the stuff that's not emphasized in the standard TA books, like support/resistance, money management, trading psychology, etc. is much more important than all the indicators that you're going to learn about.
4. I know a lot of people say to paper trade, but I think you should trade from day one with at a little bit of your own money (not your life savings please!). Why? It's got to HURT when you lose. You learn some of the basics real fast (that they generally don't tell you in the beginning books) when you see your account bleeding!

Good luck...
 
the #1 thing that kills beginning traders, and experienced traders is a lack of money management. Everything else is just entry strategy, and there are probably 100 different perfectly decent entry strategies, and only a few decent money management strategies. If you got no money management skills, you have no business pretending to be a money manager.
 
the answer to the question in the title of this thread is a simple "NO".

the average trader doesn't make money, they lose money. Not only that, but if you have a good year your first year in, you have no way of knowing that it isn't just a hot streak. If you made money in the late 90's it means absolutely nothing.
 
Quote from dotslashfuture:

the answer to the question in the title of this thread is a simple "NO".

the average trader doesn't make money, they lose money. Not only that, but if you have a good year your first year in, you have no way of knowing that it isn't just a hot streak. If you made money in the late 90's it means absolutely nothing.
More...

I could not disagree more. First, the title of the thread is "Can an average guy make a living at trading?" Yes - provided he puts in the time and effort to study and learn, and develops the patience and discipline necessary to make proper entries and exits.

Keep it simple. Always keep learning. Exercise patience and discipline.

Good luck.
 
Quote from EliteEd:

Looking for help and information from the more experienced and knowledgable traders. I am 59, recently laid off and am looking for a new career to take me into retirement. ....
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If you have been successful in a past profession then you know the skills that are required in trading. The transition will be in some ways easier if your background is engineering related: however, you will also be at an advantage if you have run money since it requires good money mangement and finance skills to excel once you get to certain point. Good books that you should at least be familiar with are the old classic "technical analysis of stock trends" by edwards and Magee and the Financial Books by Fabozzi which cover Mortgage backed securities and Bond markets and pricing. Ther are many other good books. Also check out the Merc Website and the NYSE websites. Capital ? The more the better. It is very difficult to make a living on a trading account of 50K or under and at even 100K you will need to have good skills to continually succeed.

Dont be fooled though: this is a tough business to excel in and if you have no background you will need to get some mentoring as you start. If you cant find any other deal then trading in a prop shop for a few months or even a year will at least get you a jumpstart: just be very careful in these waters as every shark will be after your money and may not be interested in training you in any way. However, many prop type shops are losing numbers with respect to their traders so there are quite a few open desks about and if you ask the tough questions and cut a good deal you might get some decent training ....
 
No.

The average guy does not have the capital or the tenacity to
survive the learning curve.

This thread is a serious wake up call to all newbies.
Dont buy the "trading is simple" BS you hear from
some traders.

How simple can it be with these kinds of failure rates?

It takes some people over a decade to become profitable.
(Including some market wizards). It takes most people
at least several years and a wad of cash with no guarantees
in the end.



peace

axeman
 
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