Switching Lanes

[Aquarians]

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I think it was Henry Ford who said “the harder I work the luckier I get”.

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We have to put in the study…the work…the time…the honing of skills…the psychology (this is a hard one) …the practice …before we submit great sums of money to the market to extract even more money. Start small and learn…practice…adapt..correct..…get good before going big. Simulators are good for practice although not exactly the same as real trading. But they can be used to hone skills. Just whatever amount you are looking to capture from a trade add two ticks to it. One for entry and one for for exit as price will have to trade through it. For instance, to give a simple example in ES. If you are looking to capture 1 point in real trading you will need to practice on a SIM capturing 6 tick move which in real trading will end up being a 1 point or 4 tick profit. Want to capture 3 points need to practice on Sim capturing 14 ticks. SIM is useful in some things..honing skills..discovering what will work for you or not work for you..etc. The psychological part if trading comes into play big time when one goes live. BUT IF YOU CAN’T make it work on a SIM you certainly won’t make it work with real money! Why throw real money at the market if one can’t make it work on a SIM?

One thing that doesn't get discussed enough is the probability of success of an endeavor.

My take is that if you start as a fat, middle-aged, out-of-shape guy, you got higher chances of success of making it into Premier League than starting as an intelligent, well-educated, resourceful college graduate and making it into trading. I DON'T KNOW ANYONE THAT GOT HERE WITHOUT CHEATING. It's literally setting yourself up to become Michael Jordan / Britney Spears / Tom Cruise / similar. Lottery ticket, with a lot more effort and money.

Talking about successful traders, I only know one guy that made it and he cheated, essentially used insider trading. Drinking with the right guys, finding out stuff before it hit general public ear.

Some day I'll write a Medium article how and why there's nothing left for the little guy.

But probability aside there's another reason why people choose trading. It's a religion.

Mind you, what would you say it's the fundamental trait of a religion? Faith you might say? Close but not quite.

It's HOPE.

It's https://en.wikipedia.org/wiki/Pandora's_box.

Investing your hope in winning an extremely unlikely lottery ticket in trading is far less delusional than adhering to some traditional religion, especially since here you also have a semblance of self-determinism and control over your own fate. Or, wait a moment, you have that in regular religions as well. So I guess the only difference is in real probability of realizing that hope.

 

[Laissez Faire]

Talking about successful traders, I only know one guy that made it and he cheated, essentially used insider trading. Drinking with the right guys, finding out stuff before it hit general public ear.

Please define successful.

Also, would be interesting to know specifically what you did in your journey as a trader so far which failed.

Personally, I don't think success in trading is that hard if you have modest expectations. Just trade with very low leverage and a lower trading frequency.

Most people (me included) seems to want to get rich from trading starting out with a small capital base. This requires super successful trading on a daily basis and high leverage. I think that's a big reason for why so many fail.

 

[Aquarians]

Please define successful.

Also, would be interesting to know specifically what you did in your journey as a trader so far which failed.

Personally, I don't think success in trading is that hard if you have modest expectations. Just trade with very low leverage and a lower trading frequency.

Most people (me included) seems to want to get rich from trading starting out with a small capital base. This requires super successful trading on a daily basis and high leverage. I think that's a big reason for why so many fail.

>> Please define successful.

Guy I know became a billionaire. As far as I know in two steps, one where he first made some $20MM (million dollars), followed by a $300MM one.

>> Also, would be interesting to know specifically what you did in your journey as a trader so far which failed.

I have enough experience at this point to know that:

1) Directional is relegated to the stupidest of the stupid (including guy I knew, he was a football player who found a way to predict direction with 100% certainty and used it two times )

2) Arbitrage is divided between:
a) High frequency, where you need to have at least 10 billion dollars to even count in the competition.
b) Mathematical, on which I almost got a PhD but then I realized it's all very fascinating but at this point in time it all falls back to #a

>> Most people (me included) seems to want to get rich from trading starting out with a small capital base. This requires super successful trading on a daily basis and high leverage. I think that's a big reason for why so many fail.

Count me in on your observations. I still am not hopeful but certain I'll become a billionaire starting and doing exactly what you described. Only not in capital markets but another, 7 billion souls market where I can sell my product.

 

[Laissez Faire]

Guy I know became a billionaire. As far as I know in two steps, one where he first made some $20MM (million dollars), followed by a $300MM one.

If that's where you set the bar, I'd say very few qualify. Especially if this is a retail trader.

I imagine he started out with considerable capital as well?

1) Directional is relegated to the stupidest of the stupid (including guy I knew, he was a football player who found a way to predict direction with 100% certainty and used it two times )

Specifically, what do you mean? Are you saying it's impossible to predict or even just follow direction in the markets?

2) Arbitrage is divided between:
a) High frequency, where you need to have at least 10 billion dollars to even count in the competition.
b) Mathematical, on which I almost got a PhD but then I realized it's all very fascinating but at this point in time it all falls back to #a

I don't see why a retail trader would even attempt to compete in these subsets of trading.

From my point of view, programming and mathematics are simply tools. They have no inherent value on their own. If they did, every programmer and mathematician would have solved the markets.

I think it took Jim Simons over 10 years to solve the markets. And he had a pretty impressive background starting out and a strong team to back him.

Only not in capital markets but another, 7 billion souls market where I can sell my product.

Sounds good.