leaving a paying job to day trade-experienced day traders please help

[trad2ing]

IMNHO, I strongly you suggest wait until you have at least 50k in cash, or at least a year's worth of expenses saved(rent/mortgage, food, insurance, other necessities). Another factor you need to include is trading fees, software fees and other fees including trading.

I did exactly what you did, and boy do I regret it. The reason I regret it because my savings couldn't cover me for the "required" time to learn and be profitable.

God's Blessings!

 

[craig]

Quote from TraderZones:

A serious trading edge (positive expectancy) is like being a professional gambler. There are few of either

Many newbies convince themselves they have an edge, but paper trading results, a good backtest, or a several month papertraded track record are usually a lot more luck than a real edge.

Can i ask you a couple questions?

What do you consider to be a "serious trading edge"? Are you referring to a certain % win rate? Or could a system that had a 55% win rate but whose winners were much larger than the losers be considered in YOUR interpretation of an edge?

The second is a basic example of where a very small edge can be found and made into a very profitable trading style by ones psychology and MM to exploit that edge.

And second, Can you explain a little more why you believe a trader could Demo/Backtest a system/method for almost a year and have good results, but that data would be no more than just LUCK?

I just want to make it clear that these questions are in no way shots at you. I am simply looking to understand your point of view more clearly.

 

[TraderZones]

Quote from craig:

What do you consider to be a "serious trading edge"?

Positive expectancy - you have a profit factor that, after all trading costs are factored in, is reasonably above 1.0. If it doesn't make money, it is not an edge.


Are you referring to a certain % win rate? Or could a system that had a 55% win rate but whose winners were much larger than the losers be considered in YOUR interpretation of an edge?

Win% is irrelevant. That is a stat that new traders focus on and experienced traders generally ignore. Positive expectancy/Profit factor is a measure of edge. And there are further metrics that define the quality of that edge, such as Sharpe/Sortino, Drawdowns, and many others.


Can you explain a little more why you believe a trader could Demo/Backtest a system/method for almost a year and have good results, but that data would be no more than just LUCK?

A backtest is useless. Showing that something worked in the past is usually just cherry picking or curve fitting or coincidence, etc.. A backtest that is then walkforward testing for a large number of trades and/or over a number of different market situations MAY be an edge. But if you have 1,000 traders/methods, then 100 will be in the top 10% of performers just by PURE PROBABILITY. But newer traders rarely know the difference. I have watched (such as on the sites I mentioned for auditing) 1,000s of systems that people were convinced worked. I would say out of a 1,000 that MAYBE a couple are interesting.

That is why I said an edge is not an easy thing. Most newer traders think they have edge after edge, and then find out after trading real money or a blowout or after significant time, that they were badly mistaken.

 

[stilldon'tknow]

Quote from craig:

First off thank you for labeling me as an individual who has "little clue" about trading. This sort of forum talk seems quite common here at ET. Maybe statements like this make you feel powerful and in control i don't know, but whatever the reason they are destructive to the forum name and the people who are trying to learn here.

I am very honored that my opinion contradicts the "overwhelming opinion here on ET" The overwhelming opinion on many forums are flawed. Forums are filled with people who know very little at best about the subjects they speak of.

I.E. Flawed Opinions!!

About me proving to you that making an edge is easy. Are you telling me you have not met other profitable traders who have different systems/methods than you? If so what makes that person so successful? their ability to find an edge? or their ability to execute a trading plan flawlessly without emotion?, to capitalize on winning trades without fear or greed taking over? to never listen to the little man on our shoulders? Their ability to take on positions with 100% confidence when their system/method is giving them a signal regardless of the fact that they have just suffered 3 consecutive losses? Their ability to exploit that edge to their fullest? I could go on and on.

An edge does not have to be big! If you are referring to an edge that provides a 90% win rate, then yes no doubt there are few of those and they are harder to find.

Profitable trading IS 95% psychological 5% system whether you agree or not i could care less.

Once again, your response was hostile to say the least. Very few of us on these forums have "made it" and very few of these people will come here to selflessly help others with posters like you out there.

i agree with you 100%! We must have had the same fellow teach us trading and system development. The vast majority of traders want something that works like clockwork, when in reality the markets don't work like clock work. The best system is the easiest to apply and adapt to! those are the ones that make you successful.Most good systems only work 30-40% of the time. The trick is to win much larger than you lose.

 

[R. Raskolnikov]

My experience has been the opposite. I find they do work like clockwork, the ES at least.

Quote from stilldon'tknow:

The vast majority of traders want something that works like clockwork, when in reality the markets don't work like clock work.

 

[stilldon'tknow]

Quote from R. Raskolnikov:

My experience has been the opposite. I find they do work like clockwork, the ES at least.

In saying that, you are implying that you have never had a losing trade, which would make the markets predictable which in turn would make all who know how to follow trends 100% winners!! Am i reading this right from you?

 

[6pst6]

Quote from stilldon'tknow:

In saying that, you are implying that you have never had a losing trade, which would make the markets predictable which in turn would make all who know how to follow trends 100% winners!! Am i reading this right from you?

You are implying that a "clockwork" system equates to every trade succeeding.

A "clockwork" system could also be defined as something that profits regularly with low drawdowns.

 

[R. Raskolnikov]

Why don't you take an absolute extreme and apply it to make yourself feel better? Oh wait, you already did that

No, champ, I'm not saying that 100% of trades work out. There are ALWAYS unknown forces that can come into play but.....a very high % of wins and very low draw downs is a reality for some, day in and day out.

Quote from stilldon'tknow:

In saying that, you are implying that you have never had a losing trade, which would make the markets predictable which in turn would make all who know how to follow trends 100% winners!! Am i reading this right from you?

 

[ammo]

"...a broken clock is right,twice a day

 

[thetrendfollowe]

Quote from TraderZones:

Quote from craig:

What do you consider to be a "serious trading edge"?

Positive expectancy - you have a profit factor that, after all trading costs are factored in, is reasonably above 1.0. If it doesn't make money, it is not an edge.


Are you referring to a certain % win rate? Or could a system that had a 55% win rate but whose winners were much larger than the losers be considered in YOUR interpretation of an edge?

Win% is irrelevant. That is a stat that new traders focus on and experienced traders generally ignore. Positive expectancy/Profit factor is a measure of edge. And there are further metrics that define the quality of that edge, such as Sharpe/Sortino, Drawdowns, and many others.


Can you explain a little more why you believe a trader could Demo/Backtest a system/method for almost a year and have good results, but that data would be no more than just LUCK?

A backtest is useless. Showing that something worked in the past is usually just cherry picking or curve fitting or coincidence, etc.. A backtest that is then walkforward testing for a large number of trades and/or over a number of different market situations MAY be an edge. But if you have 1,000 traders/methods, then 100 will be in the top 10% of performers just by PURE PROBABILITY. But newer traders rarely know the difference. I have watched (such as on the sites I mentioned for auditing) 1,000s of systems that people were convinced worked. I would say out of a 1,000 that MAYBE a couple are interesting.

That is why I said an edge is not an easy thing. Most newer traders think they have edge after edge, and then find out after trading real money or a blowout or after significant time, that they were badly mistaken.

+1