Trading for a Low-Paying Living
- Thread starter smilingsynic
- Start date
Great post. I have been witness to accounts being built up from the 3-10k range into very large accounts (low six figures to low seven figures) on a handful of occasions. In all the times, with one exception, it was not done by daytrading. It was always done by position trading and it was always done quite quickly. Kinda goes against accepted trading wisdom. Also the amount risked was generally over 5 percent in strong trends. Oftentimes way more than that. People in general do not start out with alot of money trading. Often times, they can do the best. Especially, if they walk into the right market and push it. Most of what I have seen big money fast over my trading career goes against traditional wisdom. All you guys out there that are NOT where you want to be in your trading career should realise one thing. Often this one thing is not stressed anymore IMO. You can make alot of money quickly in this business. It can and does happen. It is often a curse. But you can make money as fast you can loose money.
Sooooo you think 1000 is a small sample, you think the CPA was unethical (he wasn't) well here is a confirming stat. on 70,000 traders/investors!
I read the following in an email from John
Mauldin
(whom I consider a very reliable investemt
advisor). You might want to check out his free weekly newsletter if you want some comments and a good education from a real pro-----
_________________
There are some 70,000 investors who trade a hypothetical $1 million
at the website www.marketocracy.com run by California investor Ken
Kam. Only 2% have records of beating the S&P both long-term and
monthly. Kam picks the top 100 managers to actually run a fund.
However, last year, the fund lost 4% while theS&P
500 gained 11%.
It's a tough world out there.
I read the following in an email from John
Mauldin
(whom I consider a very reliable investemt
advisor). You might want to check out his free weekly newsletter if you want some comments and a good education from a real pro-----
_________________
There are some 70,000 investors who trade a hypothetical $1 million
at the website www.marketocracy.com run by California investor Ken
Kam. Only 2% have records of beating the S&P both long-term and
monthly. Kam picks the top 100 managers to actually run a fund.
However, last year, the fund lost 4% while theS&P
500 gained 11%.
It's a tough world out there.
Quote from Remiraz:
Great post!
Trading should be done as a hobby or side business while working/studying. I know many idiots who quit their day job to go into trading and get all emotional about staying positive and how they cannot fail.
In fact...i used to be one!!
Thanks for that, and I used to be one as well.
OK then you use him.... maybe he can collect your statistics and use them to write a book or open a website, or god knows what ....
Once a CPA is disclosing customer information of any type in public they have lost the trust of most of their potential customers....
Thank G_d someone said it.
I want my accountant to freaking broadcast to the entire world and market that i made money and how much and all of my stats. I want him to do this in order for him to attain a higher level of success and a better reputation. Unbelievable this thread hasn't been axed.
My accountant would have my permission to do an outside audit because i wanted to take on some hedge fund accounts or manage a sub account for a fund--or if i wanted my competitors to suffer and fear me. Reputable....ha! Read about distorted reputations and the people who believe in them. It's no wonder why the entire world thinks the majority of americans are idiots. It's a shame the intelligent, smart, and hard driven ones have to live around stupidity day in and day out.
A great way to lose money. Certainly some individuals will find that trading is a bit like spinning the wheel.Quote from Remiraz:
Great post!
Trading should be done as a hobby[...]
However, for those who want to be around for a while and grow, trading should never be seen as anything less than a business. Your account is your corporation and you are the CEO, the board, the CFO, attorney, secretary all in one package. When you sit down to trade, you are running a business with your attention fully focused on it. That means that you don't trade in a living room with your kids running around and you don't trade while watching some movie (I don't even watch CNBC... BloombergTV, maybe, but not CNBC while trading... it is practically one continuous advertisement). Once you are in the seat, you are at the head of a corporation that is seeking to grow and expand. What else does this require..... all the usual things that go with a corporation:
- a business plan (trading plan)
- a risk assessment study (risk plan)
- a financial plan (money management plan)
- a financial projection (a set of goals for where you want to be in a given period of time with your trading skills... not trading money)
Just think of it this way, would you show up in a boxing ring with the heavy weights only to throw a few punches? Would you jump on the court in the middle of an NBA game so you can "shoot around"? You can... but it is not good for your health or confidence.
There is no market for starting or hobby traders on the major exchanges.
Good luck to all of you.
Quote from FuturesTrader71:
A great way to lose money. Certainly some individuals will find that trading is a bit like spinning the wheel.
However, for those who want to be around for a while and grow, trading should never be seen as anything less than a business. Your account is your corporation and you are the CEO, the board, the CFO, attorney, secretary all in one package. When you sit down to trade, you are running a business with your attention fully focused on it. That means that you don't trade in a living room with your kids running around and you don't trade while watching some movie (I don't even watch CNBC... BloombergTV, maybe, but not CNBC while trading... it is practically one continuous advertisement). Once you are in the seat, you are at the head of a corporation that is seeking to grow and expand. What else does this require..... all the usual things that go with a corporation:
- a business plan (trading plan)
- a risk assessment study (risk plan)
- a financial plan (money management plan)
- a financial projection (a set of goals for where you want to be in a given period of time with your trading skills... not trading money)
Just think of it this way, would you show up in a boxing ring with the heavy weights only to throw a few punches? Would you jump on the court in the middle of an NBA game so you can "shoot around"? You can... but it is not good for your health or confidence.
There is no market for starting or hobby traders on the major exchanges.
Good luck to all of you.
I think you miss the point of the statement. The point, to use your boxing analogy, is that you wouldn't attempt to step into the practice ring with Mike Tyson and all the while claim you are a professional boxer. You risk your health.
So, you don't risk your financial well-being on something that you are unskilled at. Most people on this board are coming from occupations they make a living at. When most of those people transition, drop the other occupation, and claim they are "professional traders", they fail. They have to pump themselves up and worry everyday about trying to have certainty in the markets, and set themselves up for failure.
To take something as a 'Hobby' doesn't mean you don't take it seriously, plan diligently, practice, and perfrom. For example, playing piano was a "hobby" of mine for 15 years before I played professionally. I also played collegiate tennis, which, incidentally, paid for my undergraduate college. And, when I started, it was a "hobby." I think this perspective of slow development of "hobbies" has helped me succeed in areas requiring varied highly developed abilities.
At 3, it would be unprudent of my parents to expect me to pay their and my bills with my developing music ability. I eventually did it, and I didn't lose my childhood in the process of that development.
I think you just missed the point here. Yes, in your end of the business, which is 100% prop, you need a trader to "make it" trading all day long for you. I did it that way, and didn't succeed. I pulled back, developed my other talents into businesses, and began trading just two hours per day, instead of the normal 6. Guess what? I kicked ass, and I still do. I didn't sacrifice my financial life, my social life, or my interests in other things.
So in two hours of scapling per day, with no research, no systems tests (anymore) and no news reading, I make a good living. I spend other hours developing other things. I committed the same time per day because it allowed me to have a great life in other areas. And since my trading time is worth more than $500.00 per hour, on average, those extra hours not spent commuting are very rewarding.
I did the 'full immersion' thing, ((I traded prop unsuccessfully and salaried MA very successfully) and all I am saying is that its not necessary, and for most traders that ask questions here on Elite or are making the transition from other fields, it is simply NOT necessary.
The business is all about risk and reward. If you are new to a business, but successful in other areas, you want your entry into the business to have a chance of success with the lowest risk.
Obviously your position, from your post, is you must trade in an office (the wife and kids running around comment above), and there "is no place for starting....traders on the major exchanges."
I did work for an arb firm for two years, and that was the expectation. Its absolutley NOT necessary to be in an office to be a phenomenal trader. In fact, if you are a good trader, you will be better than 90% of everyone else in that office, so why hang around their hangups? You can lease a small office near your home or create and environment inyour home to trade. If you are a good manager, then likely your wife and kids won't be running around bothering you while you trade at home either.
I want to go on, but I respect your perspective for what it is. You are a prop firm owner, as you mentioned eariler, so you have certain beliefs about what it takes to make it your way. So many woudl be helped if they understand they don't have to do it that way, and there are more complete, even if slower, methods of developing their trading skills than the one path you elude to.
You may recall that we talked one time on the phone. I had just left a prop firm (yes I failed there). I recall you mentioning that you ahve traders move to chicago in order to trade. Well, obviously, that won't work for those who live in other areas of the country, and to be honest, Chicago isn't really on the list of most desirable places to live in this country. So for the rest of us, that like the state where they live, see commuting as short term solution, and enjoy overall success, taking trading on as a hobby at first is likely one of the best long term success plans there is.
There are countless examples in all area of professional life where the best successes started out as hobbyists, using the time and resources they could safely afford to allocate. I find your statements about the gradual or hobby approach to trading extremely limiting. And I believe traders on this board will do well to determine what balance of time and money they can afford to use in order to learn the skills of trading. You don't have to bet the whole farm timewise or moneywise in order to get really really good over time. Don't let anyone convince you otherwise.