If memory serves: About two years ago, you were very optimistic about price action, technical analysis, etc. You had a chat room, and managed other people's money. What has happened since then ? Thanks for being so honest.
Absolutely correct. There were years when I made money trading. That made me think it would last forever, but something changed either in myself or the markets. That made me analyze everything and come to conclusion periods of profits could be due to certain market conditions rather than my skill. We must accept the truth and learn from it, denial would be the worst way possible to deal with whatever results we get. I believe there may be people able to adapt to any market conditions and profit from them, but certainly those cases are more rare than many of us think.
The cost structure is insane, your reasons make sense! With order-flows trying to seek lower costs because of CME, CBOE , ICE and other Exchanges costs that keep going up, it's hard for firms to make money. People need time off to reassess their life and see if working for someone else has less stress than trading. All my trading friends from (1988 to 2004)blew up and returned to the corporate world except a couple, he killed himself and the other went insane. My friends who quit, they ended up running a medium size business because of their ability to make quick intelligent decisions fast. Some did not make it because of the emotional damage and ruined families from blowing up, it's a tough life! Trading was too much, heavy drinking, cocaine left a couple full of ulcers with great psychological damage. My friend who is kicking ass and sold his business, he was at the Prop Shop in Georgia where some guy walked in with a gun and killed a few people, remember that situation? That helped me change his mind to get out of the business and make better lifestyle changes. Your trading, can't you say you were a "financial consultant" or "PIPE Investor", you were helping analyze their business model through skills achieved by the Markets. Ignorant people enjoy putting a label on anyone in the field, your a "gambler", downplay the trading and emphasis on business functions because they have no idea what you've been through! There are people who make incredible dollars by trading and quit because their bored! A former full-time trader in Santa Cruz, he's made his money and part-time as a Chef. He's like Warren Buffet's teacher, famous investor that supposedly figured out the Market and quit out of boredom. Why should your desire to be your own boss and have the courage to try it, hurt your chances at kicking ass in business? I think you will be better than all the cowards who never tried, I wish you good luck and hope you smash the corporate ball out of the park! Good Luck and best wishes for you!
Even when I traded "full-time" I had a computer consulting business. After passing 45, I felt no longer fit to do coding/systems design, but full time trading never took off either. After two years gap on my resume I have returned to the workforce and I have been working for the past 10 years. The gaps are easily avoided by creative resume writing. Still, I am planning to return to full time trading/investing after I finally retire in about 4 years. (emphasis on active investing NOT day-trading or using any leverage which I now consider gambling.)
Some really good discussions and advice in this thread. I made a mistake of trying to pursue trading as a novice and did it all wrong. Now I am in school for a comp sci degree and looking back my mistakes are so clear to see. I was trying to daytrade futures. I looked for some general stocks advice and ended up stumbling on lots of talk online from people who claimed to be pulling huge alpha out of intraday futures markets every day.... and I believed it. I was very naive about trading. Still a mindfuck to think all those people were lying. Lesson learned: you cant believe everything you read on the internet. On side note, I once had a member of my host family offer me money to trade after seeing how excited I was. He was like uncle to me. He offered me 25k. But I declined and said wait until I find a strategy and prove it to myself. I never found anything worthwhile in intraday futures and I can't imagine what kind of guilt and shame I would feel had I taken his money and lost any of it. I can see how some people can be emotionally devastated by trading losses. I was f-ed up enough by feeling as if I chased something that didn't exist( daytrading futures for living), to compound that by losses of family money would be awful.
That is also very good point about leverage. Unless you have a real inefficiency or edge to exploit.... then leverage is trouble because the math can work against you. As we know, lose 10% of account, only need 11% to get back to even. Lose 20%, need 25% to get back to even. It starts dropping off faster from there...... 50% loss needs 100% gain to back to even So if you are putting yourself in a position where you will incur those big losses, again and again, it seems to me the math will start working against you. Maybe there are "special situations" that a trader can indentify.... where fear or greed get out of control and cause a market to become less efficient or easier to trade (subjective i know). Maybe then you can take some chances with leverage if you are a risk-taker. But it is still very dangerous.
have any of you guys considered longer term swing trading? it's much easier than day trading. if you asked me if the market will be up in ten years, I'd say probably with 90% certaintly. 5 years, maybe 75%. 1 year, maybe 60%. But as you shorten the window, probabilities approach a coin flip. On the 5 minute chart, forget about it.
[quote="d08, post: 4080948, member: 113048" And for ms, the requirement for me is that the method has to work in all markets, it can have high volatility and higher drawdowns in adverse conditions but still has to churn out a profit. If the idea was to just come up with something that works only in certain conditions, it would be easy to come up with strategies.[/quote] That's not possible.
Markets are constantly changing. This is why it's certain that the rarely lose "price action" traders exagerate or are delusional.