Competing Objectives...Who Wins?

[Don Bright]

Quote from happyheartsmile:

The bottom line is still the question ? What is the percentage of traders that make it and can scrape up a Min $50-75k+ yrly- regardless of their background , trading habits , holding patterns , scalping etc. And for that , if it is an extremely low amount (like way below 15% or some number akin to other professions) the trading profession (like any other) must answer for it ! One way or another .

As reported to the regulators, and on this board a zillion times. About 50% of new traders don't make it the first year at BT. After one year, approximately 70% are successful (profitable), and only the "Successful Minority" will thrive. As in any business, only a few will do well. Those are the traders we are always looking for.

I figure that people can choose to "fail" at whatever they like. As for me, I like the people who at least have the confidence in themselves to attempt business (ours or any other).

Don

 

[theShadow]

All prop firms should be required by the SEC to document the trailing performance of all traders accounts. And this document should be made available to all "newbies."

i.e. Failure rate, amount profitable (per trader), accounts traded to zero...

This document should be in a prospectus type format.

Attempting to trade at a prop firm is EVEN MORE SERIOUS than making an investment in an IPO. We are talking not only about committing money but precious time.

Would you take a job knowing that you have the potential of making $2000 per month in the second year of employment? And that's if you are one of twenty who make the attempt. Otherwise, you lose thousands of your capital and earn NOTHING for going to work for 1 to 2 years?

 

[candletrader]

Quote from theShadow:


Would you take a job knowing that you have the potential of making $2000 per month in the second year of employment? And that's if you are one of twenty who make the attempt. Otherwise, you lose thousands of your capital and earn NOTHING for going to work for 1 to 2 years?

Two words to counter this: "delayed gratification"... I can only recommend that you read some of Robert Kiyosaki, who coined the expression...

 

[theShadow]

ADEQUATE DISCLOSURE is the subject here.

not risk/reward, determination, etc.

(PS. I was fortunate to learn about trading with a salary and trading profits for several years in a non-prop environment)

 

[TraderJimR]

Quote from theShadow:

All prop firms should be required by the SEC to document the trailing performance of all traders accounts. And this document should be made available to all "newbies."

i.e. Failure rate, amount profitable (per trader), accounts traded to zero...

This document should be in a prospectus type format.

Attempting to trade at a prop firm is EVEN MORE SERIOUS than making an investment in an IPO. We are talking not only about committing money but precious time.

Would you take a job knowing that you have the potential of making $2000 per month in the second year of employment? And that's if you are one of twenty who make the attempt. Otherwise, you lose thousands of your capital and earn NOTHING for going to work for 1 to 2 years?

Would having such a document have kept you out of the business? I think no matter what the success/failure rate is, we all also know people who made six figures in their first year of trading and have made millions since. And once you put that in the same document, I think everyone is still going to keep signing up to see if they are cut out for this. Because the question would also be, would you take a job that had a chance to pay you $500K in your second year of employment?

And no, that's not the norm, but it happens. And that's why we are all here, isn't it? Did we come here for some job that is going to pay us a salary, any salary? I don't think so, that's not why I came into this business. I came here because I like being my own boss and I wanted to have the chance to be one of the millionaire success stories of trading and live like a rockstar if I so chose. Because as much as the people who lose everything in the market hate to admit it, success does happen to quite a few guys.

My point is, even if someone published a document that said 99% of traders fail, but that 1% lives better than Donald Trump, I think we'd all still give it a shot to see if we could be that 1%. Case in point, I'm sure we've all heard the stats that say the biggest failure rate of any business in the US is the restaurant business, and yet new restaurants open all the time. Why? For the same reason as people flock to this business - if you are successful, the payoff can be huge.

 

[xtrader]

I am chuckling with all who read this thread.

In my opinion, disclosure is not about encouraging or discouraging.

Shadow has a simple point.

It seems some readers get bent out shape by taking statements out of context. Amazed by the sensitivity of the posters here.

Go start a new thread instead of attacking...

 

[sambatrade]

Quote from theShadow:

ADEQUATE DISCLOSURE is the subject here.

not risk/reward, determination, etc.

(PS. I was fortunate to learn about trading with a salary and trading profits for several years in a non-prop environment)

agree. imho, don's percentages are extremely optimistic. gross positive maybe 50% in first year, NET POSITIVE, in this market environment, probably close to 2% in their first year. it's a negative sum game right now (short term trading). unless commissions come down, it's a significant hurdle to trading in the current market environment. If you're in this business to make 50k a year you'd better re-evaluate what you're doing. "500K your second year of trading"? hmmm, maybe back in 2001 but not now. 50k/month consistently in your second year will probably only be accomplished by less than a dozen traders in america this year.

 

[trader99]

Quote from sambatrade:



agree. imho, don's percentages are extremely optimistic. gross positive maybe 50% in first year, NET POSITIVE, in this market environment, probably close to 2% in their first year. it's a negative sum game right now (short term trading). unless commissions come down, it's a significant hurdle to trading in the current market environment. If you're in this business to make 50k a year you'd better re-evaluate what you're doing. "500K your second year of trading"? hmmm, maybe back in 2001 but not now. 50k/month consistently in your second year will probably only be accomplished by less than a dozen traders in america this year.

Yeah, this environment is extremely difficult to be HUGELY net positive. $500K the 2nd yr? What have you been smoking? hehe. I think most daytraders would find it even hard to grind out a tenth of that 50K.

It's very difficult to be consistently up in this market unless you have such an incredible edge and can apply it consistently and probably trade multiple securites adn multiple markets. I trade both equities, ES/YM, and bonds to make sure I can cover the bases.

trader99

 

[sambatrade]

Quote from trader99:




Yeah, this environment is extremely difficult to be HUGELY net positive. $500K the 2nd yr? What have you been smoking? hehe. I think most daytraders would find it even hard to grind out a tenth of that 50K.

It's very difficult to be consistently up in this market unless you have such an incredible edge and can apply it consistently and probably trade multiple securites adn multiple markets. I trade both equities, ES/YM, and bonds to make sure I can cover the bases.

trader99

re: 500K the 2nd yr, i'm quoting TraderJimR. I think he's smoking something. it's definately a negative sum game right now. extremely negative after commissions. the only guy making money now is the house. if they wise up before the game really dies, then hopefully commissions will get lowered and the nyse will make some positive changes. but i'm not holding my breath for it.

 

[limitdown]

Quote from Don Bright:



As in any business, only a few will do well. Those are the traders we are always looking for.

I figure that people can choose to "fail" at whatever they like. As for me, I like the people who at least have the confidence in themselves to attempt business (ours or any other).

Don

I agree with this one, because at some point we all have to:
..take stock of our performance
..choose to accept it, improve it or change it.

I was able to devise a few trading styles that allowed me to benefit from the current market conditions (at that/those times) and succeed. I was able to see only 1:9 others do the same. Others simply folded and went their way; others spent their sponsor's grub stake into the ground and never figured out that they were at the cusp of success.

Money managers generally are familiar with the 30% drawdown rule and you're closed as a fund. A similar self disciplinary rule works well with money and trades management.

That's one of the best pieces of advise that all those expensive classes ever imparted. My recommendation is that one should either find out about that/those MMgmt rules or how they can implement them in their trading styles.

Cheers