Is it really possible to make money in this trading lark?

This is a discussion on Is it really possible to make money in this trading lark? within the First Steps forums, part of the Reception category; May I start by correcting one wrong assumption; at no time did I say that my capital is 50,000 and ...

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Old Oct 18, 2004, 6:43pm   #36
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May I start by correcting one wrong assumption; at no time did I say that my capital is 50,000 and I make 1,500 per week in profits. Nobrainer, that was a reference to a few lines in your post, personally, I would view that as mediocrity itself. There are obviously those that would be very happy with such a return/profits but not me. Good luck to those who are making that and are content, as the saying goes, to each his own.

For those who asked genuine questions as opposed to being cynical or trying to make snide remarks I will say the following -

My friend has traded financial markets in various ways since the 1980s, he used to trade from a dedicated office in America and employed a clerk and a secretary. He made quite a lot of money in the markets and lost it all in real estate. He returned to this country about 8 years ago and monitored the markets whilst working out different systems and methods.

He came to the conclusion that for him (you can make your own choice) it comes down to risk/reward; ROCE/percentage return and compounding his capital as he went along. He trades forex, indices and shares and is not interested in anything else. As I said before, he works very long hours and trades the Far East markets; Europe and the US. He uses 100 point stops on all major currency crosses (does not bother with the others) and looks for a return of 25 points. His aim is to achieve a profit of 100 points per day in profits and then run every trade thereafter for maximum profit potential, he may also have multiple positions running at the same time. Under no circumstances will he go against the markets in any trade, he prefers to stand on the sidelines watching. As for the FTSE100, DAX or CAC he places a stop of 25 points looking for 10 points; with the Hang Seng and Nikkei it is a stop of 300 to get 100. With individual shares it is much more complex so I will not bother going into any details.

For those that think my friend will possibly go broke, do not hold your breathe, he has just paid 1.2m (cash) for a luxury house and bought another 3 properties for cash (buy to let). Poor people worry about tax, the rich and successful hire accountants. He has made his money in choppy markets and I believe that that is harder than in bull or bear markets.

I hope that this has given you an insight into how my friend has managed to turn a paltry amount into a huge profit doing it HIS WAY.
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Old Oct 18, 2004, 7:43pm   #37
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Is your friend called Harvey.
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Old Oct 18, 2004, 8:53pm   #38
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ive noticed a few people on here saying trading is a zero sum game - or for every loser there is a winner. I cant agree with that.

If I buy a share at $100 and sell it at $110 then who is the looser on this transaction????

My profit or loss is completly down to a change in market sentiment. No one has lost money through me making $10.

Or am i missing something.

kazza, for me learning to trade has taken a while. I first started out with months of paper trading, testing different theories etc until I thought I had some chance. I started trading with small amounts and realised how little I knew and what impact it has when you put real money down. I then fed my experiences back into my theories and tried again, and again and again.

I wouldn't consider myself successfull yet but this has taught me a lot about how the market works and has made me a lot more realistic in my approach.

For me I am convinced I can do it, and thats why I am willing to devote so much time to it.
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Old Oct 18, 2004, 9:23pm   #39
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Lion63,

Quote:
Under no circumstances will he go against the markets in any trade, he prefers to stand on the sidelines watching
Can you clarify what is meant by this because it can be said that if his stop is hit then he has gone against the market or does his risk model say that up to his stop is not classed as being against the market ?

eddie,

For share trading your example is partially correct but it ultimately relies on an ever increasing population. For futures then it is a totally zero sum game, in fact it is even less than zero sum when you take out the transaction costs. By this I mean that if someone is up $100 then then somewhere someone or several people have to, (in accumulation), be down by the same amount.


Paul
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Old Oct 18, 2004, 9:48pm   #40
 
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500 - 200,000 in 6 months?
I would have to see proof to believe such a claim.
Step aside George Soros, here comes 'my mate'!
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Old Oct 18, 2004, 9:49pm   #41
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ersatz99

That is very cute, I would not expect anything less from those that choose to believe that they are king of the hill. There are a few traders that make real money out there and they normally have one thing in common - the WILLINGNESS TO LEARN WITH HUMILITY.

Trader 333,

He accepts that some of his trades will cost him money and that he cannot be right all the time. Once his stop has been hit he views it that his strategy was wrong or that his assessment was wrong (in the end, they add up to the same).

As you well know, many of us will see a market/share falling and try to pick the bottom, he avoids that at all costs. He will only buy in such a situation when the market clearly turns in the other direction as opposed to forcing the issue.

One of his favourite sayings to me is that he is trying to take money from other people and he realises that they are not stupid or naive and more importantly, he is of the firm belief that a lot of traders out there are better equipped than he is (ie. more information available to them; better educated and have a better working knowledge of the financial markets).
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Old Oct 18, 2004, 9:51pm   #42
 
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Talking Re: Is it really possible to make money in this trading lark?

At this rate, in another 6 months, he will own the whole earth and everything on it!
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