How Long Does it Take to Make a Stable Income from Trading?

This is a discussion on How Long Does it Take to Make a Stable Income from Trading? within the New to Trade2Win forums, part of the Reception category; Originally Posted by tableturn So people who trade are guaranteed not to lose money? In my experience, people get too ...

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Old Apr 28, 2008, 4:55pm   #9
 
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Originally Posted by tableturn View Post
So people who trade are guaranteed not to lose money? In my experience, people get too jaded into thinking that trading is easy, but then get a smack in the face from reality when they make a loss.
If you know you are going to lose, it is stupid to get involved.
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Old Apr 28, 2008, 5:31pm   #10
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Unless you're managing OPM, you'll never get a stable income from trading - the best you can hope for is your ups + money management are enough to cover your downs.
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Old Apr 28, 2008, 11:14pm   #11
 
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What exactly is 'stable'?

I suppose an acceptable definition for most people would be to make enough money nearly every month. So that trading feels like a stable job or a stable business.

Speculative trading is probablistic and to have a high chance of making a profit every month means you have to do enough trades so that you come out ahead.

If you make just 1 trade a day, its unlikely that your system will have a high enough chance of making enough money nearly every month. (Lets say we are aiming to be adequately profitable for atleast 95% of all months).

But if instead you average 10 trades a day you have a much better chance of being profitable at the end of the month.

Really only those active enough (ie those making >100 trades a month) can expect to enjoy a monthly income from trading.

Long term trend traders, swing traders and even most day traders will have to tolerate longer periods of unstable income.

Last edited by donaldduke; Apr 29, 2008 at 3:24am.
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Old Apr 29, 2008, 1:33pm   #12
 
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That's a terrible hypothesis. That sort of attitude won't get you anywhere. Giving up or not getting involved because you are guaranteed to make a loss won't make you a good trader, and that sentiment is complete rubbish.

Did you stop trying to learn how to drive a car because of the distinctly high probability that you couldn't master it from the word go? Didn't you have to take several driving lessons in order to be deemed good enough to drive, let alone possess a license? If you had given up, then you would never have known whether you could drive anyway.

Traders need to learn the hard way - end of story. Whether you're full-time or just the occassional sniper/scalper. You're gonna lose money, and you're gonna have to put the hours in.
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Old Apr 29, 2008, 2:01pm   #13
 
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Trading for a living = self-employment = large variation in income = no stability

That does not mean it is an unstable way of earning a living, it means you must do it for a long enough period in different market conditions and then look at average income over that long period.
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Old Apr 29, 2008, 2:12pm   #14
 
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Originally Posted by FXSCALPER2 View Post
What is the point of going into business to lose money?

An interesting point.. one which a lot of people dont give any thought about.

Trading is a business just like every other business in the world. Where trading is different is that most dont treat it like one, and I'm not talking about dim or stupid people some very bright individuals dont grasp this concept either.

If you were looking to start a business say on the high street, the first thing you would do no matter how big or small it would be is to write a business plan

So whats the first thing a trader should do.... guess what, write a business plan
Step up and take trading seriously, know what your going to do and when your going to do it.

going back to the high street shop comparison, you would not expect a customer every day to buy something, sometimes you get a lot of people browsing, other times you issue refunds for unwanted items.

Trading is the same, dont expect every trade to be a winner... Is a monetary loss a looser? not if you did everything you said you ere going to do according to your plan before the trade.

So can you make a stable income from trading? Of course you can, but dont expect it to be easy or happen overnight. Most business statistic tout that new start ups last about 3 years before they make or break it... funny thing, thats about the same as trading.

Have a plan
follow the plan
be consistent
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Old Apr 30, 2008, 6:16pm   #15
 
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Trading success depends on may factors , but in general it will take 3-4 years to earn a living from it. Many successful money managers today will have screwed up previously and have possibly lost plenty of money along the way, for previous employers and clients. The current market behaviour is different to that which most traders had been used to before last summer and many seasoned traders and fund managers have been caught out, some very badly.

Success depends on one's ability to adapt to different market conditions and to control one's discipline. Risk management must also be reviewed and altered to meet the changing market conditions. A strategy that might have worked like a dream 12 months ago probably would not work at all today, because market fluctuations have changed dramatically. The recent reluctance of currency pairs to retrace in a meaningful way has burnt off many experienced positional traders, while price fluctuations of the order of 2 cents a day on an old reliable pair like EUR/USD has killed off a huge volume of the intra-day merchants. Many of the 'successful' traders may have opted out in recent times and these are possibly the only ones with any hair left, or money for that matter.
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Old May 1, 2008, 2:28pm   #16
 
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It took me about 5 years to trade with 25% loosing trades and 75% winner.And some days it's the reverse.The most important at the beginning is to learn how not to lose....not easy...
At the beginning trading seems easy...you buy low and sell high or you short high and buy low...easy isn't.
I remenber some of my bloody trades with a lost of more $1000 ....why...allways the sames mistakes HOPE.... and during this hope phasis , your trade is going down or a little up and when it becomes too painful, you sell...but it's too late , you just have to take your loss.....and cry....!!!
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