Odds of someone being able to make a six figure salary from a "standard" job with moderate intelligence and a good work ethic: >85% Odds of someone being able to make a six figure salary trading with above average intelligence, a good work ethic and minimal capital: <1% If a wanna be trader can't recognize the risk / reward shown above, they do not posses one of the necessary ingredients of becoming a successful trader.
Hello OldDad, I been trading for 4 years and made -$14,000 so far. Don't quit his day job and current career. Tell your son 1. Keep his day job and find a better job. Gurarnteed income to pay the bills 2. Invest in 401K, buy the S&P500 index monthly 3. Invest in quality proven trading course(s). MY BIGGEST mistake so far 4. Practice in back test for profitablitity for free. 5. Sim trade for profitability for free. 6. Start trading with real capital 7. Once real capital is greater that job salary for 3 years in a roll. Quit day job. My biggest mistake was trying to trade on my own without the right advice, guidance, and learning.
Re statistics of success. If you are a fat Tony (Cf taleb) statistics are noisy. So if you've overcome things others wouldn't have then you are already an outlier and should not assume statistics will apply to you
You guys need to understand that there is an IQ threshold involved in this. The statistics are being derived under the assumption that the entire population has the same chances of success. In other words, they are assuming total bullshit.** **(that success likelihood is a parameter, and that it is independent of tons of shit.) In STATS jargon, they are sampling from a mixed population and assuming performance outcomes are independent of individual features of that population (because it makes the data easier to deal with). This would be like randomly sampling peoples bench press max and not differentiating between men and women! Trading attracts the unqualified because there is money in it. It also attracts the truly gifted for the same reason. In other words, general population is being induced (via financial incentive) to participate. But general population never had a chance. The truly gifted will succeed in life, it's just a matter of how much success they will achieve. With trading the upside potential is HUGE. Six figures sounds good on paper (and even statistically, in terms of household income distribution) but successful traders can make money at rates orders of magnitude above hourly wages. The site is called elite trader because that's what you have to be to succeed in trading. It's just like math jocks in Ivy League schools teach themselves measure theory, topology, and number theory so that they can ace exams and break the grading curve. Competitive drive is an innate feature in some people. You know what I'm talking about. Kids that win programming competitions, math olympiad, or perfect SAT's. Trading is one of the hardest challenges there is. It takes more than luck. This is the problem with your 99% fail statistic. The statistics assume that it's just luck who wins and loses. (that's how losers think)
Yeah, it's funny that beginners hear from almost everyone with experience some variant of, "get out while you still can". Over the years I went from a beginner brushing off that advice to a guy that pretty much says the same thing to the new incoming classes. There is a pot of gold at the end of the rainbow if you are wired right and keep at this long enough. But it's definitely not what it looks like from the starting line. Even at my most naive I never considered preemptively quitting employment to trade independently. The numbers just don't work unless you find some rare alpha. Some guys like rally, garachen, dexvol, ect. seem to have successfully bootstapped into big numbers but I haven't ever found something with that much potential and the vast majority probably won't either. From my perspective it takes probably two decades or less of hard work for an intelligent middle-class person to have a likely chance of amassing enough capital to not have to labor if they're earnestly pursuing that goal, probably less if the effort or the sacrifices are higher. With much less risk than going all in on trading, no matter how far up the talent pyramid you are. Imo just put in your time and there will be plenty left over to pursue whatever you find satisfying.
I remember a post from garachen that went something like this, it's an idea worth ~500k per year... After having looked into it myself, I think he is right about that. If you really want to get an edge start looking into the guys on this board. Some of them do not fuck around. Makes index returns look like chump change.
The pit traders who were there long time were the "edge", they could see who were buying/selling volume, and most were doing spreads, they knew exactly what was "out of line", some used P&F in the pits. The fall out rate was huge as well for new guys, trying to cut it with no backing. On the edge of pits, if you were high school/college buddies and one worked for a brokerage and you were solo, you could make good living taking other side against retail. But ruthless sharks as they were back then, we live in a very different world today where much of trading is against programming. I been trading since 1978, I was 21yo back then, easier to learn long term stocks. Then, I have done all the wrong ways of trading more than a dozen times, learning to trade commodities and intraday had lost over 6 figures over seven years of shear agony of me against me, desperation, suicidal, question one's worth, one's religion, humanity...I have figured out this much, unless you are a Math genius, the higher the IQ, longer it going to take as the markets are not logical in the beginning and at some point decades later, you have accumulated much knowledge of markets and more importantly of self, this is relatively simple=Buy Low and Sell High. Sounds so simple, but pitfalls everywhere one steps, self inflicted. Markets don't care where you were born, grew up in streets of Chicago, smart enough to never be arrested, was an altar boy in grade school where that "boy" died long ago. I believe these are the numbers I read along my travels: 0.50% make blunt of wealth from trading making over $500,000 1.50% make $10,000-$499,999 2.00% breakeven to $9,999 hugest percentage of years 96% negative returns I use to advise people to learn how to trade but always practice, triple a sim account three times and at least know how to place trades and have some idea of principles required of price flow. I have stopped advising anyone to get into this business unless you like to find all the negatives of your inner demons, this by far the toughest business in the world to get good. I only know of one trader who is a billionaire from day trading and he started in the pits and ran a hedge fund later in life. There are many more billionaires who trade long term. It be far better to get college degrees and get a good job making 6 figures and learn how to trade long term and hedging, learn about options, the Buffet way of making wealth and with wealth-acquire businesses. Buffet owns 30.7% of Berkshire Hathaway which owns 100% 43 companies, several others majority shares, and partial of others. https://www.reference.com/business-finance/companies-warren-buffet-own-33a7e4b0ba0ff2d4 Long term allows you the have a life outside, intraday traders....life is much less so as it takes so damn long to figure out and control your thoughts, least for me.
He ... "had to go independent"? Employed at 27 with a house doesn't sound like he is doing all that badly. Having no house and no job and no trading capital left after blowing up does. That is the likely outcome sorry to say. Though good luck to him.
Yeah my thoughts were he should be planning to buy more real estate not selling what he has just so he can gamble on a trading career. The situation could be even worse than you describe. The economy is still good, if laid off now there is good chance he could find an even better job elsewhere. But things might not be so good in 12 or 24 months time. So he could be in the situation of no house, no job, lost all money trading and also in the middle of a nasty recession where new job hiring is frozen or competing against 1000 other guys for each role .