Who is actually making money trading?

Yes, some other people must be making money; I am. It can be done.

If you can't ignore the negative people and let the vitriol slide off your back, these forums are going to be a very bad place for your head. The meanness is not about you; it is about whatever happened to these people when they were in diapers.
 
Honestly everybody on this forum either has a make believe perfect strategy that makes them money in every market or makes it sound like trading is absolutely impossible and can't be done at all. I think a lot of people on this forum are sour because they never succeeded. I've heard stories of angry people calling trading coaches
 
Yes it can be done, but not by everybody (obviously). More than 3/4 of my income is made from my trading activities.
I don't have any losing month (anymore) and a losing week is always a difficult time, psychologically.

What is needed to constantly extract money from the markets?
1/ A real desire to make money, not to trade, code or analyze.
2/ A real understanding that the 1st objective is capital preservation, and what should be done to preserve it.
3/ Dedication.
4/ Diversification (markets, strategies, day & swing...)
5/ A good starting capital will allow diversification. A large trading capital will bring down the profit potential. (7.5% of 1M DD is a lot more than 15% of 100K DrawDown)
6/ No need to make money (!) to pay for the groceries.
7/ Having an entrepreneurial spirit (sorry, I cannot describe what it takes for that)
8/ Treat trading like a business. Write down everything and follow procedures.
9/ Monitor and understand our own actions, market reactions, and results.
10/ Backtest or if not possible, manual backtest (going back on time and see what you could have done, bar after bar), and paper trade each new idea before risking any penny.
11/ Do you own peer review and financial analysis of your business, at a frequency that makes sense to you.
12/ Take time to understand what works and what doesn't. Don't do what doesn't work again and again.
13/ Be positive, not destructive.
Nothing new I guess.

Investing is for the long term, trading is a game for a large majority of people, and extracting money from hourly or daily market moves is a serious business.

I guess that a lot of people will disagree with me. A lot will be doubtful or negative. That is absolutely fine. If that can help only one person to realize that yes is it can be done, and what to do about it, that is not that bad.
Good trades!
 
Fonz said:
Yes it can be done, but not by everybody (obviously).
Nothing new I guess.
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Other than the advent of speed racing (HF, algos, bots) isn't that usually the case ? Stands up over time !
 
ironchef said:
The bull market of the past few years lifted all ships so there must be quite a few among us.:D
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That may be true but one has to be able to trade down markets as well. Playing the short side and/or trading ETF's like SDS (2 x inverse of S&P) has to be part of ones plan IMO. My analogy is only playing the long side would be like a football team only running the ball (and never passing). One has to use all the options they have to succeed, whether on the football field or in trading.
 
DHOHHI said:
That may be true but one has to be able to trade down markets as well. Playing the short side and/or trading ETF's like SDS (2 x inverse of S&P) has to be part of ones plan IMO. My analogy is only playing the long side would be like a football team only running the ball (and never passing). One has to use all the options they have to succeed, whether on the football field or in trading.
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Yes, those are the pros.

For me, the sell (short) side is very hard to master and I have not been able to profit much from shorting calls or puts.:(

Do you have any suggestions for me?

Thanks.
 
Fonz said:
Yes it can be done, but not by everybody (obviously).

What is needed to constantly extract money from the markets?
4/ Diversification (markets, strategies, day & swing...)
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I agree with everything else except I have a question on #4:

It is hard to diversify. I found it very difficult to even master one aspect of trading let alone multiple aspects, be it long, short, equity, indices, commodities, currencies, futures....

So, how does one diversify without become a Jack of all trades but a master of none?.

Thanks
 
ironchef said:
Yes, those are the pros.

For me, the sell (short) side is very hard to master and I have not been able to profit much from shorting calls or puts.:(

Do you have any suggestions for me?

Thanks.
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After we've had a run (up) I just look for stocks that have high percentage moves and look to go short. I'm not looking for crappy companies. The ones I look at are often semiconductors and they may have great fundamentals but all stocks get overextended at times. And I'm merely looking for a slight pullback. I don't get greedy on the short side since there is no limit on your potential loss. A long position can only go to zero. I also look at stocks that have a beta that's maybe 1.5 or higher. And initially, if you decide to try some shorts, set a predetermined profit goal.
 
ironchef said:
I agree with everything else except I have a question on #4:

It is hard to diversify. I found it very difficult to even master one aspect of trading let alone multiple aspects, be it long, short, equity, indices, commodities, currencies, futures....

So, how does one diversify without become a Jack of all trades but a master of none?.

Thanks
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I only trade stocks. I know I'm better focusing on just that aspect. Long vs. short is often a gut feel on what I think the market psychology is.
 
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