Originally posted by nwbprop
I read in another thread that you guys have 20+ years of trading. I was just wondering if your total profit/loss at year end hit a plateau or continues to rise since there is theoretically an unlimited profit potential. It probably depends on the market condition but i am throwing the question out there anyway.
thnx in advance
jc
Like Gnome, I have had setbacks as well. For me, the second half of 2001 wiped out my gains for the first half (fortunately, I had been paid already on the first half gains). So if I were trading for myself, I would have actually lost money for the year. I did for the guy I work for.
This would have been my first negative year ever. I have been trading since late '79, but not full time until the mid 80's.
There seems to me to be a limit for me in the kind of trading I do. It was easier for me to make, on a dollar per share basis, more when I traded smaller size. Trading larger size actually can move the markets, and for a daytrader this is huge. If I were making the trades for a mutual fund, where time and timing are not as crucial, it would not matter if I wanted to buy an enormous number of shares. But intraday, pennies matter big time.
I trade with one guy who's only limit is his dollar amount per position. He can trade $2.5 million of one issue...no share limit, just dollars. I honestly don't know how he does it and consistently makes money. (I must add however that he does not trade on a daily basis as I do, so I suppose that has a lot to do with his style). He is just a better trader than I am...or very different at least. I could not trade like he does in a million years. I have seen him trade into earnings and be wrong, and double up on his position many times. This is something I could never bring myself to do. I am NEVER that confident. But he has the results to let our backer trust his judgement. So I guess there really is no limit. But for me, I have been comfortably trading the same size for several years, and have no desire to trade more. I never use all my buying power. I mean NEVER! My only desire at this point is to have more flexibility in what I do. As of now, I can only trade equities. I wish I could trade derivatives as well, but the guy I work for is not comfortable with that. This despite the fact that he knows I was a market maker on the CBOE, PHLX, PSE and AMEX and for a brief time, a floor trader at the CBOT. Plus I did some trading on the MERQ (S&Ps), And successful at all. But it is his money, so he makes the rules.
I could trade for myself and do whatever I wish I suppose, but as I stated in another thread, I have not had great success without the accountability of trading for someone else. I guess this is a major weakness on my behalf, but I do recognize it, and it is something I just live with. And besides, I do not have the kind of money to trade on my own in the style I have developed trading as I have.
So I guess the answer to your question is anything is possible. Just not for me. I have reached a "plateau". Fortunately, it is adequately high enough to satisfy my needs.
I do try and stay fiscally responsible knowing that my income can be erratic. I trade less in the summers, and make less in the summers. I try and budget myself for this. I think all traders need to keep in mind that there will be some bad times to get through. Elation in the good times should be reserved. Don't think that when you hit a hot streak, it will last indefinitely. When things are going badly, you must know that you will do better in the future just as you have in the past. Ups and downs are part of the life of a trader. Funny thing is, when I pay my taxes, my year end earnings are really surprisingly consistent.
Hope this sort of answers your question. It is a tough question because you can get 100 very different answers from 100 different traders. So keep that in mind. What I have said applies only to me.
Best,
RS7
