This is something I have been thinking about lately so let me expound. 'Consistently profitable' can mean different things to different people. At one end of the spectrum are the sophisticated high frequency guys who define consistency as never having any losing days. Then there are those with possibly less infrastructure but still highly sophisticated guys that are profitable every week. In my own trading over the years (which began just before the turn of the century), my consistency level has gradually improved as I continue to increase the breadth and depth of my portfolio of systems. As of now I am profitable in more than 80% of months (so about 10 out of 12 months). I forecast that I can increase that metric to 90% in the coming years. It's all about discovering uncorrelated profit streams by slogging it out day after day through backtesting and data mining. It's just a process like anything else.
Everyone's completely different. You shouldn't necessarily use these stories to pattern yourself to anyone. For me, I would say approx 6 years. Only because I jumped in like a blind fool trading stock during the 2008 housing crisis...Everyday I would see these news stories of huge % changes in the stocks prices...I was thinking...Damn,I could Make that in One day...when my bank is only paying me peanuts for an entire year. I was Hooked...I had to get in on this action, I told myself. I was up about 20% at my beginning peak, but stopped after I lost 40% of my account to reflect. That 40% account loss kind of struck me hard. I took my money out...and then just kind of...watched the market for 3 or 4 years/paper trading in my mind. I don't want to get into details of what or how I trade now, but it was just a matter...of (finally) Seeing the Light,...that light bulb going off in your head. that ah-Ha moment of Clarity. Trading, successfully, is generally a long road of self-discovery. Like most great things in life...it basically never happens... overnight.
Almost immediately, however I've found this is continuous learning. The moment I let up, bang, there goes another loss. Every night after dinner, I spend 2, sometimes 3 hours doing research and planning for the next day or so. I should add, social events come up from time to time, like this Tues. night a rugby game is on the itinerary, and I'll be going. Lot of hours involved, but can't think of a better way to earn a living.
There was a thread here on ET by "gnome" on Jan 1st, 2008 called 25 Years & $100 Million Profits... A to your Q's, Today Only (doing a search on his name - it was around page 247 of the search results) I think he said he made a profit his first year and thereafter. Never had a losing year. For all his success though... he said that he was never consistent in his profits. If I recall he said his "less good" years averaged 5 - 10% return, while his best were >100%. But they could be (and were) anything in-between. We pretty much all start with the idea that if we could just clear enough ticks for $50 a day, and do that consistently, and then increase our contract size... why... being worth millions is just around the corner. It seems so practical and obvious. A lot of the pressure and frustration I felt... came from having this goal; and expecting consistent profits. I thought that was practical, not to mention possible. Reading Gnome's post it finally soaked in to have a goal to be consistent as a trader (via my plan) and not focus on the profits. Very different emotions while trading. --- asking people how consistent their profits are... now that is an interesting question! Seasonal? More consistent after 10 yrs of trading experience? I think gnome said just... never consistent.
That was something I got right, but was mostly a case at being in the right place at the right time, and then pressing it as hard as I could while it lasted. I didn't have the brains, skills, experience or vision to attempt the path you took from there. Knowing where one can't compete is useful. Your comment is interesting because I am not sure if you are suggesting that trading mispricings is still a feasible approach for some of the participants here, or making the point that if they can't do that type of trade then perhaps they aren't likely to compete successfully in tougher (more speed/fee sensitive) trades. I think the most accessible advice you've ever given here is to focus on the "calming the panic" trade (and also anticipating then going with the panic) which is still a good way for new manual traders to get their start. Worth a link to that great thread: http://www.elitetrader.com/et/index.php?threads/why-strategies-make-money.287837/
I'm finding the large mispricings are starting to get more commonplace now as volatility is picking up a bit. At this stage, I really think it's the only way that makes sense for a retail trader starting out. You take your initial 10K investment and hit hard the 6-8 mispricings you find a year to get to 70-100K. Maybe do that for another year or until you reach 250K then you can start going after smaller movements that carry more downside risk. I know it's gospel here, but the idea that you should spend 1,3,5,10 years or whatever slogging away and then maybe possibly "making it" sounds to me like an extended Brokerage infomercial. It's very hard to overcome the commission early on so it's best not to play that game. Once you get capital of 250K you can then consider doing enough volume where you can negotiate a good rate and move on from there. I think for the most part 2012-2014 it would have been pretty hard to bootstrap yourself into a trading company. So far, this year I think it's once again possible.
Consistently profitable lately? I would say no. 1. Yes. 2. 6 years. 3. Working all day, from the first coffee until 4am with a bed next to the monitors. When you have no background to help you, it's a steep climb, especially in the beginning and you need all the time you can have. I didn't consider it a business when starting, at all. The money was simply an initial motivator in the very beginning when I didn't know anything and had none of it. It was more of doing something I wanted to do, liked to do. The hours remained the same.
Read together with your other posts here, I'd expect questions around: -who are these participants and why do they need to trade? (which leads into questions about which products / complexes they'll be trading in, and potentially at which times) -is their trading partly the cause of the mispricing? have other participants who would usually help keep the market correctly priced withdrawn? (and why?) -that this is still a manual trading opportunity suggests that there is a lot of product-specific knowledge required that would be difficult to code - what form might this knowledge take? -how do I know with absolute certainty that the product is mispriced? (the mispricings I've seen years ago were so obvious that you could automate trading them; this seems more subtle, perhaps to do with contract settlement rules, matching engine idiosyncrasies, or correlation with other products) -given that the opportunities are so rare, how many products could an individual realistically learn well enough to cover? (considering multiple exchanges/timezones to make it more efficient if only 6-8 trades/year) Certainly nobody is entitled to be given answers but it would be nice to have a discussion about how to learn to ask more relevant questions. A retail trader starting out isn't likely to have the right frame of reference; a shame as potentially interesting threads get derailed with the same boring old stuff. You called it in January and gave a good hint: http://www.elitetrader.com/et/index.php?posts/4073240/ . You've narrowed the field in specifying they are products a retail trader can access with a $10k account - so no access to e.g. the cash market or OTC required. You've been very generous and the natural optimist in me hopes you've some folks drop you a quick note to say "read your post about X, I followed your advice and did Y and it worked out well for me, thanks." Or in an ideal world: "I implemented a successful strategy while completing my degree, are you currently hiring?"