Question to anyone trading for a living

[theroguetrader]

Thanks again all for the replies!!

Discipline is something I do believe I have, just what I am being disciplined to isn’t all that great, but who knows. If it comes to pulling a trade, for example, do you take the approach "premature exit is not following the system rules - naughty boy!" or do you take the belief "premature exit based on some analysis is a good thing, the system doesn’t know what you do - good boy!" Which belief does one take? What is discipline therefore?

Do you all think that a good trading system comes from using indicators and entry/exit rules set in stone or indicators and going in and out based on gut feelings? What is everyone’s belief on these grey box systems? I know for a fact that is what all the big players use nowadays.

I believe I have what it takes to be a trader (I feel it is in the blood) just finding a system to trade that is reliable is the sticking point. I know no system is perfect!

Cheers

Bob

Hey Bob,


The belief that you have "already " makes you a trader..!! try not to look at it like possibly having a " eureka or Holy Grail moment - its a practice thing, like learning to ride a bike or drive a car and the more you do it, the better your skills become.
Some of THE worst experiences happen when you feel like a rabbit stuck between the headlights and NOT KNOWING WHAT TO DO - PANIC.... !!
A good system is one that works for "YOU " - your personality will tell you what kind of time frames your most comfortable trading in - and just try and go with the flow a bit more.
generally speaking, humans have trouble following systems, and they try to " second guess it "... !! (GREED) - basically that stems from a lack of discipline -
By having a mechanical entry/exit rule or at least a firm mental one, you eliminate the emotion - EVERYONE hates losses (if they say otherwise, they dont trade). The first loss is usually the SMALLEST.. !! sure it hurts a bit - but because traders/investors dont like to " admit to themselves when they are wrong " - they will stick with a loss until its REALLY big - and then take it.. !!
Then it REALLY HURTS... !!


Trading Bots exist - but no one participant is able to push/influence/manipulate a market for any period for any length of time - particularly in futures..!!
The numbers involved would be so enormous - :-0

 

[knucklehead]

Keep a VISUAL (CHART) DIARY OF all your trades and look analyse all your trades every week! Keep what works and look for patterns in your trading and the market you trade. Live long and prosper.
Cut losses and develop a good exit strategy.

 

[RichieE]

I would like to speak to someone who trades for a living, I am not looking to system crib - just to gain an insight into what it is like to do and how feasible it is to make a living. I have a few other questions, like do you need a large PC setup i.e. 3 screens plus and how important it is to know what the big players are doing in the market?

I would be very grateful to hear from anyone, if they prefer not to post here for their own privacy, then I would respect the confidentiality in a pm.

Bob

Hey Bob, I know that I'm late to the party but here's my tuppence worth :smart:

I currently trade full time at an arcade and I previously worked for Bloomberg so I had the good fortune to visit lots of different types of traders.

Most professionals at banks would have between 4 and 6 screens which would typically be one or two screens with Bloomberg/Reuters/Email and the rest filled with the trading platform windows (i.e. price ladders, matrices and P&L). The most insane setup I ever saw was a currency trader who had 16 screens in a 4 x 4 arrangement! All the screens were mounted on a frame that angled them towards him... a big concave array of data!

Personally, I have 5 screens. (Two Bloomberg running off one computer, two trading screens running of another computer and one CQG screen (graphing package) which is one 'slave' screen of three that I share with my colleages.

The computers themselves are dependant on your needs. Most people don't need a super high powered machine. However, quant trading desks often run very intensive realtime trading models they will often have the best that money can buy.

The trading floor I work on also has CNBC/Bloomberg TV showing constantly on large screens mounted on the ceiling and a 'squawk box' which pumps news to everyone. This tells us what's happening in the world. Every trading floor seems to have a similar setup in that respect.

As for how feasible it is to make a living from trading, I think I would find it difficult to do on my own sat at home. The benefit of being in an office is that you're surrounded by others that you can compare notes with, moot trade ideas with and generally keep you sane!

Hope this helps.

 

[knucklehead]

Trading for a Living

Well, it's ROLLERCOASTER.....UPS AND SCARY DOWNS.

You buy at $30 and the next day it GAPS DOWN TO $15...your SCARED WITLESS OR YOU NEED THE TOILET
(I know a guy that happened to....NERVOUS WRECK...:-(....gave him some advice...SELL....he held on to $3 then sold on PAIN...!!! FOOTNOTE: He did better than me I went ALL THE WAY TO ZERO with one stock! How I love that stock....it reminders me to SELL...GET OUT...LOVE THE SMALL LOSS...QUICK!

Emotional....it's REAL MONET....YOUR MONEY...ON THE LINE...

IT'S GONE IN A MILLI-SECOND!

Control your emotions using REAL MONEY...THAT'S TRADING

LOVE YOUR LOSSES...LOTS OF THEM

 

[Windowsill]

Hey Bob, I know that I'm late to the party but here's my tuppence worth :smart:

I currently trade full time at an arcade and I previously worked for Bloomberg so I had the good fortune to visit lots of different types of traders.

Most professionals at banks would have between 4 and 6 screens which would typically be one or two screens with Bloomberg/Reuters/Email and the rest filled with the trading platform windows (i.e. price ladders, matrices and P&L). The most insane setup I ever saw was a currency trader who had 16 screens in a 4 x 4 arrangement! All the screens were mounted on a frame that angled them towards him... a big concave array of data!

Personally, I have 5 screens. (Two Bloomberg running off one computer, two trading screens running of another computer and one CQG screen (graphing package) which is one 'slave' screen of three that I share with my colleages.

The computers themselves are dependant on your needs. Most people don't need a super high powered machine. However, quant trading desks often run very intensive realtime trading models they will often have the best that money can buy.

The trading floor I work on also has CNBC/Bloomberg TV showing constantly on large screens mounted on the ceiling and a 'squawk box' which pumps news to everyone. This tells us what's happening in the world. Every trading floor seems to have a similar setup in that respect.

As for how feasible it is to make a living from trading, I think I would find it difficult to do on my own sat at home. The benefit of being in an office is that you're surrounded by others that you can compare notes with, moot trade ideas with and generally keep you sane!

Hope this helps.

Just shows how different we are. To me this is all total insanity. One computer 1 screen and a locked door and a max of 2 hours a day tops!! Oh and 3/4 days a week max!

 

[igual]

Having just started looking into fx markets at a time of global downturn, I can't help but feel swayed by the news of crashing economys towards day trading the markets. I realise that it is better to be focussed on one area only but was wondering if people tend to just make money from forex or is it more a blend of different strategies for different markets?

thanks

igs

 

[nkruger]

I realise that it is better to be focussed on one area only but was wondering if people tend to just make money from forex or is it more a blend of different strategies for different markets?

thanks

igs

I watch (and trade) the footy, cable and euro$ and the strategy I use works on all the markets ~ some days better than others, but that's the nature of these 'random' markets.

 

[igual]

I watch (and trade) the footy, cable and euro$ and the strategy I use works on all the markets ~ some days better than others, but that's the nature of these 'random' markets.

Ha, footy (UK and european) are where I make 90% of my money at the moment but I do diversify (into cricket, tennis etc) hence the question.

Now I am trying to generate another income stream hence I am considering forex or day trading. Forex is more interesting as I earn in £ but live in ozzy dollars. However seeing the markets crumble points me towards day trading. I am guessing that whichever I start with will probably be the one that I end up with (subject to being able to make money on it) so I need to decide which to start with first.

igs

 

[igual]

Thanks again all for the replies!!

Discipline is something I do believe I have, just what I am being disciplined to isn’t all that great, but who knows. If it comes to pulling a trade, for example, do you take the approach "premature exit is not following the system rules - naughty boy!" or do you take the belief "premature exit based on some analysis is a good thing, the system doesn’t know what you do - good boy!" Which belief does one take? What is discipline therefore?

Do you all think that a good trading system comes from using indicators and entry/exit rules set in stone or indicators and going in and out based on gut feelings? What is everyone’s belief on these grey box systems? I know for a fact that is what all the big players use nowadays.

I believe I have what it takes to be a trader (I feel it is in the blood) just finding a system to trade that is reliable is the sticking point. I know no system is perfect!

Cheers

Bob

This is an interesting point. Anyone looking into these markets is not risk averse so it is interesting that discipline plays such an important part. I should say that I would certainly start out with a disciplined approach however I wonder how many of you actually stray to the path of 'gut instinct'. Knucklehead puts it nicely, get out quickly on the down turn but keep in on the up. I wonder if those who make 'big' money follow a strictly disciplined approach governed by charts and signals or if they fly by the seat of their pants.

igs

 

[knlge876]

Good thread! I'd also like to ask a question here.

I learned that less than 3% traders are successful in trading the stock markets. Does anyone know the percentage of traders who are successful in the Forex market?

 

[Mathemagician]

Both are unknowable statistics. Might as well just make up a number like whoever told you 3% did.

jj

 

[knlge876]

Yep, I guess the statistics are the brokers' well-kept secret. Hopefully, as the Forex market exists long enough, the secret would be known...

 

[nine]

LOL

100% of traders are successful trading the market they trade.

If they are not successful then they are learners, or dabblers, or something else but they are not yet traders.


This is a little over the top but no more so than the 5%/3% quotes. The nearest to real of those quotes was about futures accounts and it was something along the lines of "only 5% (or 10%) of those people who open futures accounts will still have active accounts in 6 months." I think it came from the days when a broker rang around and generated greed amongst the well healed ... and incited them to (with the brokers help) churn a futures account.

Those people are not traders. Any more than people who buy pullbacks in bull markets and then fail in the sideways or bear markets are traders. So even if the figure is 3% it really doesn't matter.

The real question might be: what percentage of people who train, build trading plans, and then learn to execute those plans well succeed?

If you do all 3 then the figure will be a lot more acceptable.

 

[knlge876]

The real question might be: what percentage of people who train, build trading plans, and then learn to execute those plans well succeed?

If you do all 3 then the figure will be a lot more acceptable.

This is a more meaningful figure, I agree. Reliable statistics on this seem to be a rare commodity.

 

[knlge876]

Hi there, another newbie question here.

A few hours ago (at around 5:20pm EST) the Euro.USD suddenly jumped over 65 pips in 5 minutes and it did not seem to have any news that caused the sudden big rally at the time, the Euro also made the new high to 1.5040+ (I also noticed the bid and ask spread on my quote machine momentarily widened to 9 ~ 10 pips around that time).

What could be the cause for this type of big price run, and how often the similar move without news happens to the Euro market ?

Thanks!

 

[mp6140]

Mp --- Being A Loner Is Just Fine By Me !

Your claim is not falsifiable in a strictly logical sense. In order to disprove it, we will have to keep on testing until no one is left to try. So yes you can say 'potantially anyone can do it', but I think that is not a meaningful statement in reality. In reality, very few people can do it.

========================================================

Forex is a wonderful world because it is one of only a few trading vehicles that tend to be systematic and predictable, if not in the short run of a day or two, but in its overall trend seeking manner.

One can make a VERY decent amount in forex, ONCE one has the experience and education as to how the markets move during a day, such as the two major reversal periods in any 24 hour period.

Like any other situation, there are those who will excel, those that will do competently and those who fall into the middle ground.

the reasons for the failure rate among new "traders" is usually overextension on the trading side and the resultant margin calls, or something I teach against constantly, the STOPLOSS, which is actually a great way of giving the broker your money --- someone recently posted of a huge spike that was propelled by no news that he could see. Well it "might" have been a rumor or news you couldnt see or it could have been "stop hunting" where mm's grab a huge gift of what they consider low priced shares, anticipating a run up later in the day, or 5 days down the road ---

but if one is asking the question then what happens in the market and rules the market is information that is WAY ahead of current experience levels and not very handy at this point.

YES, you can make money. YES, if you sit by your computer, flipping currencies every minute or so, it can be lonely and boring and your personality has to match as there's little room for conversation except really boring times, you can work with ONE screen as you gain experience, but with that experience will probably come the desire to have more, and only bragging rights will limit what you use (I use 3 but could do easily with 2 -- the more you have, up to some point, the easier it is to just "grab" information !

the market has a behavior pattern, since it is driven by humans ---- its HIGHLY dependent on support and resistance areas, and these are easily secured through availability of software and indicators available for the MT4 platform at no cost --- believe me, they work excellently !

as a last thought, although I work in the US, even my students earn 2000 pounds weekly, although its actually pretty simple to do that in a day of little effort by concentrating on the longer timeframes, setting a trade and walking away till the next day. In this manner, I make a consistent 2000 pounds daily, but of course Im working with a decent sized account at this point ! (given good money management, its the size of your equity (NO, not that other thing!) that limits or attains your profit size without placing you in danger !

people have spoken of money management, and its probably MORE important than the actual trading itself, because if you lose your equity you are now OUT of the ballgame, period and end of conversation !

Can you trade for a living --- ABSOLUTELY YES !
there is EVERY form of trading known to humans available in forex (as others also) and one can find a niche, perfect it and do rather sweetly without ever having to face another irritable boss, water cooler or commute -----

REMEMBER NOW -- along the way you might just wander into a relationship with one other or many others, chat during trading and handle some of the solitary nature of the job --- heck, one could even open an office and have real live peoples there and if youre alone, you can always send out for some company --- My personal favorites are the McGiver Sisters !

Working for myself is something ive done for 32 years and i wouldnt change for anything, but its not everyones cup of tea and that is one of the looks at yourself you have to take, but thats psychological and were talking about trading, so my answer has to be GO GET EM TIGER !!!!!

enjoy and trade well

mp

 

[PualoP]

LOL

100% of traders are successful trading the market they trade.

If they are not successful then they are learners, or dabblers, or something else but they are not yet traders.


This is a little over the top but no more so than the 5%/3% quotes. The nearest to real of those quotes was about futures accounts and it was something along the lines of "only 5% (or 10%) of those people who open futures accounts will still have active accounts in 6 months." I think it came from the days when a broker rang around and generated greed amongst the well healed ... and incited them to (with the brokers help) churn a futures account.

Those people are not traders. Any more than people who buy pullbacks in bull markets and then fail in the sideways or bear markets are traders. So even if the figure is 3% it really doesn't matter.

The real question might be: what percentage of people who train, build trading plans, and then learn to execute those plans well succeed?

If you do all 3 then the figure will be a lot more acceptable.

If you've ever worked in the pit or an arcade you'll still see that the percentage of profitable traders is in the 1%-5% figure.

 

[mp6140]

If you've ever worked in the pit or an arcade you'll still see that the percentage of profitable traders is in the 1%-5% figure.

===========================================================

with all humility, I doubt that very very much as most traders have been doing the job for years --- the hard part is "getting" into the pits, and then most in there are only messengers anyway, buying and selling based on "others" requirements !

mp

 

[PualoP]

===========================================================

with all humility, I doubt that very very much as most traders have been doing the job for years --- the hard part is "getting" into the pits, and then most in there are only messengers anyway, buying and selling based on "others" requirements !

mp

Other than financial barriers there really aren't that many to being a 'local' i.e the guys in the red coats providing liquiidity to institutional order flow trading their own account. You lease you seat, deposit your money with a clearing firm and away you go. Getting other people to trade with you is another story...

The rule of thumb is that for every 100 guys that start, 90 of them will be gone in a year, blown up, decided it's not for them, too physically demanding etc. Of the remaining 10, only 1 will still be there 5 years. Those remaining traders are the ones that 'have been doing the job for years' as you say.

 

[mp6140]

MP -- do some die on the floor and get trampled also ?

Other than financial barriers there really aren't that many to being a 'local' i.e the guys in the red coats providing liquiidity to institutional order flow trading their own account. You lease you seat, deposit your money with a clearing firm and away you go. Getting other people to trade with you is another story...

The rule of thumb is that for every 100 guys that start, 90 of them will be gone in a year, blown up, decided it's not for them, too physically demanding etc. Of the remaining 10, only 1 will still be there 5 years. Those remaining traders are the ones that 'have been doing the job for years' as you say.

=============================================================
while a "rookie" as far as ratings by the site are concerned, 36 years is the number for trading and approx 7 for forex itself --- Im no where near as "new" to this as you might think, having over 5000 copies of my trading system out there, and prepping a new one for forex completely. I presently run a NY registered financial holding company that adheres to the "original" concept of a hedge fund, so have not gotten caught up in the silly real estate mess that so many have.

Having presented my bona fides for your edification and entertainment, your numbers (from my experiences with pros and its extensive) tend to be on the VERY low side. Attrition does take a number out, mostly from burn out, but more and more the pits become obsolete, trading becomes more relaxing, and profits mount, keeping far more in the industry than your numbers would suggest. Granted, there will always be those who bite off more than they can chew, but by the time all the costs of being a local are figured in, its a rare playboy jumping in for a day of fun --- they already know what that world is all about and can play very well in it. That doesnt state that they will be there forever, as interests change ---- I was in equities for more years than I would talk about, and "discovered" forex a bunch of years ago, and aside from long range equity holdings for the children, I have never turned back from forex and commodities to equities, and Im still going strong, have opened a new fund which is EXCLUSIVELY "hedge", and they will have to carry me out after rigor mortis has set in, because my fingers will be locked around my trading joystick !

Show me documentation of your claims, and I shall change my opinion as need be, but right now I dont believe much in attrition by "blowing wad !"

enjoy and trade well

mp