% of traders profitable at pro firms?

If traders come into Bright (or any firm) and they all trade the same system, why do some fail and some succeed? In your opinion Don, what seperates the winners from the losers?
 
I myself have seen many people come and go in trading, and would liken it to Baseball. Thhousands of guys want to become a professional ballplayer, and spend years in the minor leagues making virtually no money at all for the chance to play in the big leagues. 90+% of them will never see one pitch in the majors except from the stands.

Even then, the few players that do make to the majors, only a fraction of those become superstars and make the really big bucks. Be it born talent, or lots of hard work, or both, I have heard it said that for every 10,000 little leagers that want to be a pro, only 1 makes it.

Seems that professional trading has much better percentages than that, so let's stop worrying about how many guys make it as traders and worry about the real problem of misguided ambition -- shutting down baseball! :D (Just kidding by the way about shutting down baseball before everyone flames me, I love baseball!)

-Jim
 
The thread is titled with a question: "% of traders profitable at pro firms?"

Well, that answer depends:
What do you consider profitable? If someone nets $1000 in a year, that can be considered profitable and meet the title of this thread. But I wouldn't consider that profitable. For some people, $100K is profitable, yet for others, that's a pay cut.

What I'm trying to say here is that I think what people want to know is "Is this the firm that *I* can be the *most* profitable at".

If you're a successful trader, happy with your style and making money you like, then what you want to know is:
  • Is this firm financially sound and control risk?
  • Is the equipment better for my style of trading than what I'm using now?
  • Are the costs lower than what I'm paying now?
  • Are the "extras" (ie bullets, automated trading access, etc.) things that I have now or don't, but I can use to increase my profits?
  • Do I have the flexibility to get my money when I want and trade the way I want?
If you have positive answers to these questions mr. successful trader, you really don't give 2 cents if other traders at the firm are successful (as long as they don't come around bugging you for "your secrets" - and if they do, have the firm set you up to trade at home).

Now let's say you're new at the game. Then your questions may be totally different:
  • Is this firm financially sound and control risk? (either way, you want to be sure your money is secure).
  • Can I get good training and continual assistance as I learn to trade?
  • Are the systems adequate enough for me to trade in the style they show me to be profitable?
  • Do they foster an environment of support for new traders?
  • Do they have a proven track record of taking people in my situation and making them profitable to the point I consider being profitable (ie: more than at my existing career?)
You see, mr. newbie, if you just ask "% of traders profitable at pro firms?", then you don't get the answer you need. Let's say you take a firm where nearly all the traders came from existing firms and were already successful, but just came to the new firm for a better deal. Let's say everyone there makes 6 or 7 figures. Well, if you go there, it's highly likely you won't find what you need to succeed. Of course they'll have a high percentage of successful traders, but how does that give you an indication of how you'll do? If you want to compare, compare 2 firms that have been around and have a track record of working with people like you (meet some of their success stories). That's what you need to do. If they can teach you to trade and you become mr. successful, then look around and ask his questions.

So, let's all ignore the debate about statistics manipulation and whether staying a few months or a few years is successful, and whether less than $100K or more than $100K is successful. Just think about what you need to make you successful and then pick the appropriate firm.
 
Originally posted by liltrdr
If traders come into Bright (or any firm) and they all trade the same system, why do some fail and some succeed? In your opinion Don, what seperates the winners from the losers?
More...

The 'trite' reply would simply be "money"...but the factors that seem to repeat themselves are of course discipline (who da thought?) and more importantly we find that "game players" with a sense of risk/reward do much better than the purely analytical types (they tend to lood for too much "confirmation" before they enter trades).

I should point out there is no "system" - all traders are exposed to certain methods and strategies, but since there is no "system" (anywhere for that matter), each trader develops their own style of trading. It is important to remember that a trader must find a style that suits them, not try to adapt themselves to a certain discipline. A "fast and loose" individual cannot wait for perfect setups (kind of like sitting next to a video game and not picking up the joystick)...and an engineer cannot simply dive into a stock to "see where it goes" (even when based on sound theory).
 
Newatthis,

I want to respond to your question and it is not easy to answer.Statistics can be manipulated by who ever uses them.70% of the traders in one of our offices are profitable and 40% make high six figure incomes. However,
we may have gone through 100 traders at that location to find 15 traders who are savy and 6 who are superstars. Generally in the industry, 1 out of 5 traders can make it in a good trading environment. In a bear market , when conditions are not favorable for trading , less new traders will be successful. If a trader makes it through the first year, he will have a much better chance of being successful. I think Don & Rob would probably agree with me on this, but I can only speak for myself. Trading is one of the hardest professions to be successful at, but also one of the most rewarding if you do make it.


Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
 
Nice Post Gene and Protrader.

One thing I tell someone who wants to be in this business is that they must WANT it. They need to think long term. Trading is a learning process. A traders needs to be able to survive the bad times to be around for the great times.

Robert Tharp
 
Gene is correct about "making it through the first year"...we feel that if a trader can make it through that much of a learning curve, then they should be ok.

We have had some improvement in new trader retention each year, probably due to the increased focus on weekly meetings and continuing education.

In the early 90's we had to run through about 50 people to get 10-15 that could cut it (20-30%), by now it is more like 50-60%...due in part to the Series 7 requirement (since people have to study for an exam, they are usually more dedicated).

And I am sure that Mr. Tharp will be thrilled to know that I agree wholeheartedly with his comment about desire...you must really want to do this to do well. Trading is simple, but it takes a lot of mental strength and determination (and a total lack of ego, at least at first).. :)
 
Originally posted by ProTrader
The thread is titled with a question: "% of traders profitable at pro firms?"

Well, that answer depends:
What do you consider profitable? If someone nets $1000 in a year, that can be considered profitable and meet the title of this thread. But I wouldn't consider that profitable. For some people, $100K is profitable, yet for others, that's a pay cut.

What I'm trying to say here is that I think what people want to know is "Is this the firm that *I* can be the *most* profitable at".

If you're a successful trader, happy with your style and making money you like, then what you want to know is:
  • Is this firm financially sound and control risk?
  • Is the equipment better for my style of trading than what I'm using now?
  • Are the costs lower than what I'm paying now?
  • Are the "extras" (ie bullets, automated trading access, etc.) things that I have now or don't, but I can use to increase my profits?
  • Do I have the flexibility to get my money when I want and trade the way I want?
If you have positive answers to these questions mr. successful trader, you really don't give 2 cents if other traders at the firm are successful (as long as they don't come around bugging you for "your secrets" - and if they do, have the firm set you up to trade at home).

Now let's say you're new at the game. Then your questions may be totally different:
  • Is this firm financially sound and control risk? (either way, you want to be sure your money is secure).
  • Can I get good training and continual assistance as I learn to trade?
  • Are the systems adequate enough for me to trade in the style they show me to be profitable?
  • Do they foster an environment of support for new traders?
  • Do they have a proven track record of taking people in my situation and making them profitable to the point I consider being profitable (ie: more than at my existing career?)
You see, mr. newbie, if you just ask "% of traders profitable at pro firms?", then you don't get the answer you need. Let's say you take a firm where nearly all the traders came from existing firms and were already successful, but just came to the new firm for a better deal. Let's say everyone there makes 6 or 7 figures. Well, if you go there, it's highly likely you won't find what you need to succeed. Of course they'll have a high percentage of successful traders, but how does that give you an indication of how you'll do? If you want to compare, compare 2 firms that have been around and have a track record of working with people like you (meet some of their success stories). That's what you need to do. If they can teach you to trade and you become mr. successful, then look around and ask his questions.

So, let's all ignore the debate about statistics manipulation and whether staying a few months or a few years is successful, and whether less than $100K or more than $100K is successful. Just think about what you need to make you successful and then pick the appropriate firm.
More...


Actually I'm not looking to join a pro firm. But as a speculator it's helpful to see how they operate....so that they can be traded against.

It's been great that they've exposed themselves in public along with their strategies.
 
The percentage goes up if the new people stick to basics the first few months, and don't try to get too smart too quickly. We have had several traders who made money too soon, thought they had a handle on a certain strategy, and then got bitten real badly. It does take some time.
 
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