Questions from a non-trader

<i>no one can teach you to trade</i>

Especially not any "home study course" or "day trading university." If you ever read the testimonials of these places, they all sound great. That's because they ask for the recommendation at the end of the class or training. The student has been pumped full of enthusiastic bs, and this is the perfect time to ask for the testimonial.

What you very rarely, if ever, read is: XYZ Guru College is great <b>and I make money using what I was taught</b>
 
Originally posted by Don Bright
that there is no book, chart, system, or anything else that will make you any money.
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I'd have to respectfully disagree. I have no qualms with the book and system mention of your statement but the chart part isn't what I'd call accurate. What will make you money, then, if it isn't charts? Tape reading? If you want to take pennies out of the market tape reading is definitely the way to go. If you want to take points out of the market you'll need to look at some charts. People do, I do.

Sure, you may sleep much easier at night taking pennies and being flat by the end of the day but I'll be spending the day as stress-free as daytraders are spending their nights ;)

Ik
 
Originally posted by Cdntrader
> What is a realistic return to expect while swing trading.

If you are in the top 10% of traders

10-20% a month.

If you are in the other 90%

less than 5% month.
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Hmmmmmm, I need to meet some 'o dese guys.

Let's see, how about a nice LONG grueling stretch of performance. 3 years seems right. After all, we want to be young enough to spend the millions we'll be making.


Now the guys that can only muster a feeble 10% a month , with a starting stake of only $50,000, well, they can expect to have the modest sum of $1,545,634 after the 36 months are up. Not bad, beats flipping burgers.

And the really GOOD traders, the 20% a month guys , like the ones that post here :D , they need to find a good mattress to hold their $35,440,093.


Good thing only 10% of traders are doing this, otherwise it would be really hard to make living.
 
I don't think Don was saying that charts aren't useful. I think he just meant that there is no single "magic" chart and that a chart is only as useful as the person that knows how to interpret what is on the chart.
 
Originally posted by echo
I don't think Don was saying that charts aren't useful. I think he just meant that there is no single "magic" chart and that a chart is only as useful as the person that knows how to interpret what is on the chart.
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Oh, point withdrawn then if that is the case. Ditto to there being no magic chart.

Ik
 
Cohiba,
You sound like you might benefit from trading in an office setting with a professional firm. I was in your situation not long ago and this is what I did and it has benefitted me greatly. I had some trading experience, but decided to do this fulltime. I had enough money saved up to live for a year, and some other income sources to stretch that out a little longer. I started with $40k and a solid grounding in the fundamentals of trading and risk management.

The advantages of a professional firm vs. retail have been discussed to death on this board, but for your situation I think the access to as much capital as you need to trade the strategy you want (within limits) and the environment that you'll be in will be a big plus. When trading with a pro firm, you tend not to think in terms of % return on your account, but real income amounts. This is because the size of your account doesn't mean much. If you see a trade and want to take it, you do it. The capital is available and you use it to earn as much as you can. Of course you have to consider your account size when determining your risk.

I spent a few months in a professional firm's office and was usually there 12-15 hours a day, every day of the week, completely immersed in my business and surrounded by serious minded professionals who shared their ideas and perspectives. I learned more about trading for a living in that time than I learned in seven years of semi-serious trading/investing. It's tough to do this when you are older and have dependants, so when you are young and single take the opportunity while it's available.

Corey
 
Originally posted by stock777
Hmmmmmm, I need to meet some 'o dese guys.

Let's see, how about a nice LONG grueling stretch of performance. 3 years seems right. After all, we want to be young enough to spend the millions we'll be making.


Now the guys that can only muster a feeble 10% a month , with a starting stake of only $50,000, well, they can expect to have the modest sum of $1,545,634 after the 36 months are up. Not bad, beats flipping burgers.

And the really GOOD traders, the 20% a month guys , like the ones that post here :D , they need to find a good mattress to hold their $35,440,093.


Good thing only 10% of traders are doing this, otherwise it would be really hard to make living.
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HAHA! I love this post!! yeah, only 5% a month?? WTF? That's like 60% a year! Most professional money manager will sell their souls to get that kind of performance!!But then again, maybe because they are managing hundreds of millions and it's very difficult to have anything even remotely close to 20% annual compounded return over long periods of time. Even the legendary investor Warran Buffet has "only" 30% annual compounded return and that's over decades. If these traders that make just 5% a month then they will have more wealth than Warren Buffet in half the time and make it to Forbes Richest People list in a decade! LOL!

I think people underestimate the effects of compounding! If you can make "just" 1% a day that's like over 250% a year! You can't sustain that level of compounding...

Maybe that's why it's so easy to sell the holy grail trading systems as advertised in trading magazines.. People lack numeric skills to see the flaws in these ads.

trader99
 
true about the compounding.
the problem in your argument is that you should see that pro traders are not seeking compounding, amateurs are.
(fund managers are another story and it depends).

trading like a business implies no compounding, because the revenues you generate are income to your business. it's not an investment.
all profitable companies, whatever the activity, must do the same. they have to generate a lot of cash to pay bills, infrastructure and salaries. Do the math, it's a big % of 'profits' before you deduct all these expenses. It has to be, otherwise the company can't survive. And they do this for years and years (hopefully).
Well, trading as business is the same. You need to generate that much and you don't compound because you need to expense the profits.

So it's possible to sustain this kind of return for a very long time. It's a misconception to think otherwise. That's what capitalistic enterprise is about.

Of course, you are right when you say the minute the trader tries to compound his return, it quickly becomes more and more difficult to sustain the %. But again, only amateurs or large funds try to do that.

tntneo
 
tntneo is right. It is common for professional traders making well into 6 figure incomes to sweep their account to $50k at the end of each month. They might make 20-50% on that money for the month and make a phenomenal return on their "investment" by year end, but they don't think in those terms. It's just a business and you try to earn as much as you can.
 
Originally posted by tntneo
true about the compounding.
the problem in your argument is that you should see that pro traders are not seeking compounding, amateurs are.
(fund managers are another story and it depends).

trading like a business implies no compounding, because the revenues you generate are income to your business. it's not an investment.
all profitable companies, whatever the activity, must do the same. they have to generate a lot of cash to pay bills, infrastructure and salaries. Do the math, it's a big % of 'profits' before you deduct all these expenses. It has to be, otherwise the company can't survive. And they do this for years and years (hopefully).
Well, trading as business is the same. You need to generate that much and you don't compound because you need to expense the profits.

So it's possible to sustain this kind of return for a very long time. It's a misconception to think otherwise. That's what capitalistic enterprise is about.

Of course, you are right when you say the minute the trader tries to compound his return, it quickly becomes more and more difficult to sustain the %. But again, only amateurs or large funds try to do that.

tntneo
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Exactly, the difference between traders, investors and fund managers.
 
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