Is it really that hard to make money the first year in trading?

JB3...Wow, you have nailed exactly what I went through from August July 08 to Nov. 08, now I'm getting back on track....wonder where I'm heading to next.


Quote from JB3:

It's easy when you are winning, no pressure, no big deal.

It gets infinitely harder when you don't have a job, and the market is the only way you can make money. Having a small stake won't help any.

Then every once in awhile, you will be tested, you will know that one mf'ing trade that is just dead set on killing you. From the moment you hit that entry button, it starts to run against you. If you fight it, and hold on praying it will come back, then that when it has you by the balls, and you end up losing big on that 1 trade whether it just nosedives away from you or you compound the problem by averaging down. Then the fear will take over, and you will start second guessing everything, and looking for the holy grail. As part of your new system development, you will filter out all the bad trades, but also the good trades. You will be a discipline freak because you know the consequences of not following rules.

And this is where people are stuck in perpetually until they find an edge. And this is why it takes so long because edges are not easily identified, especially by a newbie. And most of the time, every system snake oil salesman is luring you to some unprofitable system, and everyone has their own opinion of what the right way to trade is. You have to wade through all that garbage. Some take a few months, while others take years, or never. In trading, the amount of time you put in does not equal success, it does involve work, but also a lot of luck, intelligence, and discipline. So maybe momentum trading is your thing, you may be the lucky few that is successful from the start. Just know that at one stage or another, you will go through what I just wrote.

And after all that if you make it there, then you have a chance.
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Gubinec, yes very hard to make money within your first year simply because you need to see DATA print ad nauseam before you can truly find correlations that you feel comfortable taking advantage of (and that work!). Sure as a noob you'll catch a few weeks were it seems incredibly easy to make money and...BAM...the market switches gears and you'll give it all back and then some. It happens to EVERYONE. The true players learn from these subtleties and adjust the next time around.

Seriously man, expect 1-2 years MINIMUM before seeing any profits that are consistent (daytrading perspective). If you are going to get into the trading trenches everyday, its going to take 1000's of hours of screen time and a full force effort as you go. I've been doing this ~ 10 yrs now.
 
A lot of great and very honest posts here! When you are sick to your stomach choking down the tears in your eyes while watching the market wipe out the last dollars from your account then you will finaly understand what all these guys were talking about in their war stories. You'll be sweating blood before you start consistently taking money from the markets. But don't let this spoil the dream that brought you here. The feeling that a lot of money is just within your reach is intoxicating. This feeling will keep you at this game for a long time even after you no longer believe in Eldorado. I am not trying to scare you but maybe it will prepare you for the reality and the first fall won't be that hard. Try not to be too hard on yourself.

Welcome and Enjoy the ride. :)

Good luck!
 
Quote from Gubinec:

Yeah Brandon, I realize that I should really tone down my optimism and play it safe....

What was your experience trading for the first year if you dont mind sharing? Did you trade retail or at a prop firm?

Thanks!
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I traded at a retail firm, MBTrading. Started off back in the days when commissions ran $25 each way.

My original plan was to buy when Cheetah said to buy and sell when Cheetah said to sell. That did not work out too well for me, I started off with $25,000 and turned that into about $17,000 in 6 months.

So then I had a very smart plan, which was to sell when Cheetah said buy and buy when Cheetah said sell. On the surface it seemed like pure genius, at least to me, but it turned out to be more like <b>J</b>ENIUS coz following that plan I turned my $17,000 into a quick $10,000 in about 45 days.

Lucky for me at that point I sanity started to come back into my life. I stopped dreaming about the house on the hill, the fast cars and the hot chicks and started to worry about simple stuff...like not going broke and just sticking around to be able to trade the next day.

That was kind of a point where I learned, the hard way, that there is not really an easy button to success in trading (or anything else in life for that matter) and that I was actually going to have to WORK at it. So, I really dug in and studied technical analysis. Luckily at that time the market was trending pretty well..so I was able to focus on simple bullflag patterns in uptrends. Just basic 1-2-3 pullbacks with a narrow range day, then buy the breakout...that was actually the first setup for me that was profitable.

Then what I did was I worked with that setup. I looked for it each night using TC2000 and wrote down all the potential setups I liked. I built my account back up. Once I'd built my account back up and started to profit a little bit I started to look for another setup I could use. Basically what Id do is say..Ok I can risk $100 on this 1-2-3 narrow range pullback and it was my bread and butter thing. Then I'd say..ok I'm going to work on learning this other gap setup..but I dont know it as well..so I can risk $50 (not including commissions) on it. This way I'd be able to support myself with my "good" setup while I worked on the next one. Then the gap setup starts to work..so now I risk $100 on the gap setup and the 1-2-3 setup..and I start looking to find another setup that works for me. I go to these wide range day rebound (oops) setups and started out again...risk $50 and develop my feel for that setup until I'm doing very well with it. I basically was able to take those three setups and bring my account up to just under $200,000.

I basically built myself up like that.

Hope that helps.
Brandon
 
Quote from JB3:

It's easy when you are winning, no pressure, no big deal.

It gets infinitely harder when you don't have a job, and the market is the only way you can make money. Having a small stake won't help any.

Then every once in awhile, you will be tested, you will know that one mf'ing trade that is just dead set on killing you. From the moment you hit that entry button, it starts to run against you. If you fight it, and hold on praying it will come back, then that when it has you by the balls, and you end up losing big on that 1 trade whether it just nosedives away from you or you compound the problem by averaging down. Then the fear will take over, and you will start second guessing everything, and looking for the holy grail. As part of your new system development, you will filter out all the bad trades, but also the good trades. You will be a discipline freak because you know the consequences of not following rules.

And this is where people are stuck in perpetually until they find an edge. And this is why it takes so long because edges are not easily identified, especially by a newbie. And most of the time, every system snake oil salesman is luring you to some unprofitable system, and everyone has their own opinion of what the right way to trade is. You have to wade through all that garbage. Some take a few months, while others take years, or never. In trading, the amount of time you put in does not equal success, it does involve work, but also a lot of luck, intelligence, and discipline. So maybe momentum trading is your thing, you may be the lucky few that is successful from the start. Just know that at one stage or another, you will go through what I just wrote.

And after all that if you make it there, then you have a chance.
More...
Very good post. I marvel at those people who can go through this cycle in a matter of months. It took me more years than I'd care to admit to get my footing.
 
Quote from Gubinec:


I did some simulation trading when I was interviewing with a firm and it seemed to me so easy to make money there.
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Simulator and real money are two different worlds. You're not battling emotions yet. Also, you're not dealing with execution & slippage.

Other than that, either you have an edge or you don't. It takes time to develop & hone an edge. There are very few, if any, inefficiencies & tricks left to exploit nowdays, at least in US equities.
 
As a paper trader you read about fear and greed and may understand it from an academic level.

I went in thinking that trading was like an analytical exercise. I never truly understood the impact of emotions until I had real money on the line. It is easy to get overconfident. You can be smart, analytical, able to recognize patterns, well read, and have followed markets for years - but when money matters your emotions can really screw with you.

If you have emotional issues - it will probably show up in trading. Needing to be right, anger, how do you handle frustration, etc.
 
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