jonnyy40
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I was hoping my question was vague enough to allow room for discussion without seeming too confrontational,but it wasn't,so i'll be a little more specific. Coming into trading in this country is like being born new into the world! Where to start? Who to trust? What to believe? (in fact i'm too old to believe or trust anything,but it scans nicely!) When I asked about big British names,I was hoping for a lead. If none have made it i.e. there aren't any trading household names,none have published or no-one's selling systems - why not? Take an American,Linda Bradford Raschke. In (new)? Market Wizards she states: " I never worried taking a loss, I always knew I'd make it right back!" If (reputedly) so great,how is it that she's still running a trading company and not counting the gold in her own vault? - The truth is that 999 out of 1000 of us will always be followers. Without a serious maths and economics background we can't be anything else! So before I put my toe (or like Princess Margaret,both feet!)into the hot water of risking real cash. Could anyone point me in the direction of a published British trader or any good mathematical studies of trading? are there any strategies that work as well today as 5 years ago?
OK . Try following NAZ's posts on this BB. He trades and tutors USA L2 stocks. Compared to 5 years ago, trading can be down to split second timing ( if you want), or you can sit back and watch paint dry and trade longer term UK stocks. Dunno if Nas is in Lida's league, I could be insulting either of them by saying that. Just because someone Tutors, doesn't mean to say they can't earn megabucks from trading. Cash is not everything and tutoring is a nice respite from the hectic world of daytrading......
I'd like to earn $1000 in a day, then I could take the rest of the day off and have 4 days holiday.
I'd like to earn $1000 in a day, then I could take the rest of the day off and have 4 days holiday.
reactor
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jonnyy40
if you just look at daily open and close prices then it'll look like you can't make serious money, but if you look at an intraday chart, it'll be pretty obvious that you can. there is no universal equation for making money in this. you will definitely lose some money on the way.
studies of CAPM say you can't make money from trading, but small samples are used along with only monthly data rather than intraday. bear in mind capm is in the light of investing, which should not be confused with trading. you will have to work for your money.
it's more than likely linda bradford raschke does it for status. it's better to be someone important than not and its even better if you can be rich at the same time. it's like asking the queen to step down because she is wealthy enough to retire, or j. k. rowling not to publish her harry potter books.
trading might not be right for you.
if you just look at daily open and close prices then it'll look like you can't make serious money, but if you look at an intraday chart, it'll be pretty obvious that you can. there is no universal equation for making money in this. you will definitely lose some money on the way.
studies of CAPM say you can't make money from trading, but small samples are used along with only monthly data rather than intraday. bear in mind capm is in the light of investing, which should not be confused with trading. you will have to work for your money.
it's more than likely linda bradford raschke does it for status. it's better to be someone important than not and its even better if you can be rich at the same time. it's like asking the queen to step down because she is wealthy enough to retire, or j. k. rowling not to publish her harry potter books.
trading might not be right for you.
Personalities
There are numerous very successful traders in the UK. However, they are typically found in the Hedge Fund world- Marshall Wace, Egerton, Odey etc as examples. With all the benefits of both management and performance fees and sheltered from tax by being domiciled offshore.
Regarding your question of successful traders, you need to specify type of trader- Day-trader, Position trader, Event driven trader (distressed stocks,Regulation D), Arbitrage trader, Option, Futures trader, Fixed Income, Global Macro etc.... All require different skills. You allude to mathematics, which is not necessary for day/position trading, but vital for option/arb trading.
Most commentators, when discussing trading, stress there is no single route for success. However you need to find an approach that suits your personality (so that you love what you do).
RE your question about a strategy that has worked over a number of years. Please remember that one of the key skills required in trading is FLEXIBILITY. Markets are dynamic, always changing. Note the switch in emphasis that the market puts on economic reports. One year it is employment numbers, the next money supply. You cannot control what the market does, but you can control your reactions to the market.
The key to trading is having an open mind, extreme discipline to cut losses immediately and bet sufficiently small that any loss is emotionally immaterial. ( ie act like you are running a business- don't go for broke on day 1). The key is survival in order to be ready for tomorrow which brings more opportunities.
There are numerous very successful traders in the UK. However, they are typically found in the Hedge Fund world- Marshall Wace, Egerton, Odey etc as examples. With all the benefits of both management and performance fees and sheltered from tax by being domiciled offshore.
Regarding your question of successful traders, you need to specify type of trader- Day-trader, Position trader, Event driven trader (distressed stocks,Regulation D), Arbitrage trader, Option, Futures trader, Fixed Income, Global Macro etc.... All require different skills. You allude to mathematics, which is not necessary for day/position trading, but vital for option/arb trading.
Most commentators, when discussing trading, stress there is no single route for success. However you need to find an approach that suits your personality (so that you love what you do).
RE your question about a strategy that has worked over a number of years. Please remember that one of the key skills required in trading is FLEXIBILITY. Markets are dynamic, always changing. Note the switch in emphasis that the market puts on economic reports. One year it is employment numbers, the next money supply. You cannot control what the market does, but you can control your reactions to the market.
The key to trading is having an open mind, extreme discipline to cut losses immediately and bet sufficiently small that any loss is emotionally immaterial. ( ie act like you are running a business- don't go for broke on day 1). The key is survival in order to be ready for tomorrow which brings more opportunities.
Mr. Charts
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jonnyy40,
I assume you are talking about traders like myself and Naz who trade full time on their own account, rather than institutional traders? There are a lot of us around, we just don’t make a big song and dance about it, unlike some of our American friends.
This is not a business of household names and who wants a life of fame and attention anyway?
Personally I’m happy earning what I feel is a good living and putting money aside to invest in property and other things and spending the most precious commodity, time, with my family, on holidays and doing the other things I enjoy exactly when I want. This might be far too modest a life for many people, of course.
As for Linda BR, actually I have met her and like her very much. She enjoys coaching traders as I do AND trading.
She is not short of money with considerable property interests and indulges herself with one of her other passions, horses. She deserves her success since she has earned it. She has a fine trading mind and happens to be a really good genuine person.
You don’t need a serious maths or economics background to trade the way I do, though such a background might help get a job in the City. But who wants to work for an institution? Not me. Part of this business is about not answering to anyone. No-one can sack you. You can go on holiday exactly when you want for as long as you want.
“Mathematical studies of trading”. Er….no. Frankly I think you’re barking up the wrong tree there if your objective is to make money trading.
Strategies that work now that worked five years ago. Yes and no. Some things do, but you need to adapt to the market you’re in. There isn’t a holy grail. Before the tech boom I invested and traded simple options and made money. Directional trades and selling ftse strangles as it sat in a range. When the tech boom was born I traded tech stocks and made money. When it died I shorted T10 and T25 for a while, then cfds before starting day trading the US stock market and futures. For the last three years I feel have really arrived at the ultimate for me. No overnight risk, a good income, save for my family when I’ve gone and a little coaching to add variety and meet many interesting people from all over the world.
So perhaps instead of spending precious time looking for that big British guru, you should learn about this business and start to discover how to make money doing something many of us really enjoy.
This is an excellent site for beginners with some added high quality imput from some of the pros so have a good look around.
Life, (and trading), really is what you make it if you put the effort in, learn, persevere, stay focused and treat it as a business.
If I can do it, anyone can - it ain't rocket science.
I assume you are talking about traders like myself and Naz who trade full time on their own account, rather than institutional traders? There are a lot of us around, we just don’t make a big song and dance about it, unlike some of our American friends.
This is not a business of household names and who wants a life of fame and attention anyway?
Personally I’m happy earning what I feel is a good living and putting money aside to invest in property and other things and spending the most precious commodity, time, with my family, on holidays and doing the other things I enjoy exactly when I want. This might be far too modest a life for many people, of course.
As for Linda BR, actually I have met her and like her very much. She enjoys coaching traders as I do AND trading.
She is not short of money with considerable property interests and indulges herself with one of her other passions, horses. She deserves her success since she has earned it. She has a fine trading mind and happens to be a really good genuine person.
You don’t need a serious maths or economics background to trade the way I do, though such a background might help get a job in the City. But who wants to work for an institution? Not me. Part of this business is about not answering to anyone. No-one can sack you. You can go on holiday exactly when you want for as long as you want.
“Mathematical studies of trading”. Er….no. Frankly I think you’re barking up the wrong tree there if your objective is to make money trading.
Strategies that work now that worked five years ago. Yes and no. Some things do, but you need to adapt to the market you’re in. There isn’t a holy grail. Before the tech boom I invested and traded simple options and made money. Directional trades and selling ftse strangles as it sat in a range. When the tech boom was born I traded tech stocks and made money. When it died I shorted T10 and T25 for a while, then cfds before starting day trading the US stock market and futures. For the last three years I feel have really arrived at the ultimate for me. No overnight risk, a good income, save for my family when I’ve gone and a little coaching to add variety and meet many interesting people from all over the world.
So perhaps instead of spending precious time looking for that big British guru, you should learn about this business and start to discover how to make money doing something many of us really enjoy.
This is an excellent site for beginners with some added high quality imput from some of the pros so have a good look around.
Life, (and trading), really is what you make it if you put the effort in, learn, persevere, stay focused and treat it as a business.
If I can do it, anyone can - it ain't rocket science.
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jonnyy40
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Alright- But I'm sure you can see my point? I thought it might be an alternative to simply asking - How much is everyone else making? Get 'em angry and they'll spill the beans! It's not often the prospector who makes it, more likely the hardware store. Reactor asks " maybe trading is not for you?" and he may be absolutely right! But I want to make as informed a decision as I can! Knowing that the average man/woman is making X or Y, then assuming average ability in myself, I can decide if it's worth the effort? No offence was intended (if any was taken) - That's hedging isn't it?! I've started to look around this BB and yes there are many points of interest,so I'll stick with it. Look forward to seeing you all in person somewhere down the line and getting a thrashing you couldn't pay for.
Trader333
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Hi Jonnyy40,
One of the problems with asking a group of traders a question is that you will get very different answers. An example would be as follows:
If you gave 10 traders the same information and even made them enter a trade at the same time in the same market, you could almost certainly guarantee 10 different profit and loss results from just this one trade. This is all down to the fact that you will get 10 different approaches to "Managing the Trade" The more successful traders are those that consistently manage their trades better than others. In my view is not the easiest of things to learn because if it were there would be many more successful traders out there than there actually is.
Cheers
Paul
One of the problems with asking a group of traders a question is that you will get very different answers. An example would be as follows:
If you gave 10 traders the same information and even made them enter a trade at the same time in the same market, you could almost certainly guarantee 10 different profit and loss results from just this one trade. This is all down to the fact that you will get 10 different approaches to "Managing the Trade" The more successful traders are those that consistently manage their trades better than others. In my view is not the easiest of things to learn because if it were there would be many more successful traders out there than there actually is.
Cheers
Paul
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jonnyy40 said:
Bear in mind that, according to statistics from brokerages, around 75% of investors/traders lose, 10% break even, and 5% win. Some say 70% / 20% / 10%, but the point is still the same - the vast majority don't make money.
Of the 5-10% who win, some will win by a few thousand per annum. The good traders (mediocre in terms of being winners) will take anything up to, say, a million out of the markets a year.
The huge winners will take ... who knows? $10-30 million per year is a ballpark figure for them, but there aren't too many of them though.
Remember though, that in any business making the first million is the hardest. Once you've done that (I understand ... not having made my first million from trading yet) it just gets easier and easier as you can 'do size', which is not a factor open to many.
I'll just be deliriously happy being a 'mediocre' trader. :cheesy: :cheesy: :cheesy:
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Re: Thanks Skimbleshanks
Gentlemen rabbits seem to suffer from the same problem too!
:cheesy:
jonnyy40 said:
Gentlemen rabbits seem to suffer from the same problem too!
:cheesy:
Naz
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When you trade side by side with a huge winner your mouth drops wide open.Of course they're a Nasdaq trader using NL2.
I'm still gobsmaked by him.
I dont reckon you can do it on your own.At some stage you need someone to straighten you out and point you in the right direction.
I'm still gobsmaked by him.
I dont reckon you can do it on your own.At some stage you need someone to straighten you out and point you in the right direction.
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cassiopeia
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There has to be a net loss in short term trading, since it is a zero sum game after spreads and charges, so the minority must gain from the majority, a sort of Robin Hood in reverse I am afraid.
This is sobering, but don't let it put you off. If you do your homework and have the aptitude, there is no reason why you can't make consistent money. I expect the 75% of losers are dabblers without any money management plan or the inability to stick with it.
This is sobering, but don't let it put you off. If you do your homework and have the aptitude, there is no reason why you can't make consistent money. I expect the 75% of losers are dabblers without any money management plan or the inability to stick with it.
jonnyy40
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opinions
From what i've read of this BB so far,I would say that my own personal viewpoint is closest to that of jls 483 - That mortgage- weirdo skit was funny - but I sided with jls. Up until this point I've gone for safe investments plus a bit of share dabbling. - Watching Gulf war 2 develop and seeing the market (ftse) and Gold behave in a predictable way led me to think about Gold futures options and SB - For the gearing. The hows and whys of what I did/didn't do are immaterial. - I'm just one of the sleeping populace waking up to other ways of using money. That's why I came here: To see what the British scene has to offer. As someone who's used the highstreet bank all his life, I need/have to tread carefully.
From what i've read of this BB so far,I would say that my own personal viewpoint is closest to that of jls 483 - That mortgage- weirdo skit was funny - but I sided with jls. Up until this point I've gone for safe investments plus a bit of share dabbling. - Watching Gulf war 2 develop and seeing the market (ftse) and Gold behave in a predictable way led me to think about Gold futures options and SB - For the gearing. The hows and whys of what I did/didn't do are immaterial. - I'm just one of the sleeping populace waking up to other ways of using money. That's why I came here: To see what the British scene has to offer. As someone who's used the highstreet bank all his life, I need/have to tread carefully.
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Personalities
For a lot of "traders" the desire to be right unconsciously is one of the core motivations to invest in the stock or futures markets. That's why the crowd loves to trade according to predictions (either their own or the predictions of the currently available market gurus). If they are right, they are happy, no matter what amount they win when they win, no matter what amount they lose when they lose. They even accept a negative expectancy as a result of there ego-driven behaviour.
When you are trading Stocks or Financial/Commodity Futures your ability to predict is not important at all. It's how you react to market action that counts.
You should concentrate on how you will react to price action rather than desiring to predict it. Reacting is a business decision, predicting is an ego play. Your ego tells you to win most of the time (which is impossible) and prevents you from cutting your losses short and letting your profits run.
However, above all else, the importance of Money Management is underestimated by a lot of traders. It is of much more importance than entry and exit decisions (=timing decisions) will ever be.
Very few indicators are better than a coin toss, and if they are, the edge is eaten up by slippage and commission.
'Money Management' tells a trader that she/he should concentrate his research on how to optimize capital usage and to view his/her portfolio(-)s as a whole.
There are (at least) 2 steps to implement proper Money Management:
1) Bet sizing is the determination of what (fixed or non-fixed) fraction of a portfolio's total (or again fixed or non-fixed fraction) equity to risk on each trade expressed in Sterling-, Dollar-, Euro-, Yen-, or Swiss Franc-denominated currency values.
2) Position sizing, on the other hand, is the calculation of how many contracts you should hold in your position, once a trade entry is signalled which basically is a function of the BigPointValue (the number of dollars that a 1-point price move represents) and a rounding algorithm as the number of contracts/stocks can't be traded in fractions and must be cut down to a whole integer.
So rather than finding a guru, develop your own methodology for selecting a trade. Keep it very simple (moving average, breaking support/resistance etc). Define a clear exit methodology (stops etc) that cuts any losses aggressively and retains any profits. However, what will transform this apparent simplistic approach to trading is the application of ‘Money Management.’ Using the correct bet size (the aim is to have bigger bets on winners than on losers) will transform basically a 50/50 decision into a positive edge. You can read books such as Tharp’s Trade your way to Financial Freedom (chapter 12) to help you in your knowledge.
Hope this helps.
For a lot of "traders" the desire to be right unconsciously is one of the core motivations to invest in the stock or futures markets. That's why the crowd loves to trade according to predictions (either their own or the predictions of the currently available market gurus). If they are right, they are happy, no matter what amount they win when they win, no matter what amount they lose when they lose. They even accept a negative expectancy as a result of there ego-driven behaviour.
When you are trading Stocks or Financial/Commodity Futures your ability to predict is not important at all. It's how you react to market action that counts.
You should concentrate on how you will react to price action rather than desiring to predict it. Reacting is a business decision, predicting is an ego play. Your ego tells you to win most of the time (which is impossible) and prevents you from cutting your losses short and letting your profits run.
However, above all else, the importance of Money Management is underestimated by a lot of traders. It is of much more importance than entry and exit decisions (=timing decisions) will ever be.
Very few indicators are better than a coin toss, and if they are, the edge is eaten up by slippage and commission.
'Money Management' tells a trader that she/he should concentrate his research on how to optimize capital usage and to view his/her portfolio(-)s as a whole.
There are (at least) 2 steps to implement proper Money Management:
1) Bet sizing is the determination of what (fixed or non-fixed) fraction of a portfolio's total (or again fixed or non-fixed fraction) equity to risk on each trade expressed in Sterling-, Dollar-, Euro-, Yen-, or Swiss Franc-denominated currency values.
2) Position sizing, on the other hand, is the calculation of how many contracts you should hold in your position, once a trade entry is signalled which basically is a function of the BigPointValue (the number of dollars that a 1-point price move represents) and a rounding algorithm as the number of contracts/stocks can't be traded in fractions and must be cut down to a whole integer.
So rather than finding a guru, develop your own methodology for selecting a trade. Keep it very simple (moving average, breaking support/resistance etc). Define a clear exit methodology (stops etc) that cuts any losses aggressively and retains any profits. However, what will transform this apparent simplistic approach to trading is the application of ‘Money Management.’ Using the correct bet size (the aim is to have bigger bets on winners than on losers) will transform basically a 50/50 decision into a positive edge. You can read books such as Tharp’s Trade your way to Financial Freedom (chapter 12) to help you in your knowledge.
Hope this helps.
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