the "odds" have been against every trader, especially new guys, since the beginning. Remember the "90 percent" fail thing? If you made it past that, what makes you think you are subject to the same rules/odds as everyone else? You already beat that statistic. Perhaps you're not bullet proof, but you're clearly not the norm. I don't know what the statistic is for tennis players that make it to college ball, but it should be less than 10 percent given how many inexperienced players are always on the damn courts (why does EVERYONE play tennis in CA?) My perspective is perhaps a little skewed, because I played in college. But ever since day one, you're always being told, 'most folks aren't going to play in college" And then when you get to college, you're told, "most people won't play pro". And then when you're a pro, you're being told you need to retire by 30, because you're done. And for the most part, the naysayers are right. Every shmuck that ever picked up a racquet won't even play varsity in hs, let alone college, let alone pro. Its probably true for trading; take every daytrader that ever put on a trade and most flop. But I don't know of a single, modestly talented player growing up that wanted to go to play college ball that didn't. In fact, I don't know of a single college player that wanted to play pro that didn't make money from it. (yeah, they didn't become top 10 in the world/become stevie cohen, but they paid the bills with their tennis) I know a lot of talented kids that just burnt out, and never made it; its all too common in tennis. Happens at every level (my ex-college teammate played davis cup for hong kong, but just "had enough". Quit playing even college after 1 year. Point being, the odds are stacked against you in pretty much anything you do. I-banker analyst that actually stays in I-banking, scoring in the 90th percentile in SAT (I don't believe for one second any of you think you couldn't do that if you made it a priority. Hell, maybe you already took it and didn't, but you most likely didn't give a fuck)...you can pretty much think of most anything, and there is some statistic/saying that puts you against the odds. But if you're beating the odds already, fuck it. Until someone actually says something statistically significant, I woudln't give it much mind. Tennis is notorious for burnouts, and I've had to hear and see it for some time. When someone says, "i traded for 7 years, and only 2 people i know survived" I hope they at least knew a statistically significant number of traders to make it mean anything. I would hope it wasn't somebody going "I knew 50 traders, only 2 made it. 2/50, not good percentage. Idea: most traders fail after 5 years. why am I writing all this? I don't want to believe the hype (the thing that everyone says is going to happen).
Hey newguy, even though the success rate of becoming a successful tennis pro is slimmer than becoming a perenial successful trader (not talking about having a streak of a couple months, or quarters, or even years, but talking about being so consistent at it that one is actually able to retire comfortably), the game of tennis is a bit different and in a way perhaps even easier to develop because one can always know exactly what specific skills are needed to win. In sports, it's much easier to locate specific areas that need improvement (perhaps it's serving, volleying, returning, conditioning, footwork, etc.) Every player or coach can evaulate a game and pinpoint where to correct the errors. If one is fully commited on this improvement, one should at least be able to see some continual progress. But in trading, after the learning stages of figuring out and even mastering all the fundamental skills (discipline, money management, risk management, etc.), the road to continual improvement is uncertain because trading involves so much more ambiguities. How does one work on something when one doesn't even know what needs to be improved on other than that he just needs to have a better system to stay in the game? If a tennis player's backhand is weak, he can easily pop some balls, be out under the sun or in the rain, and work many hours on that. If his serve is a little bit weak, he can work on that as well. If he has stamina issues, there are programs to improve that. The focus of weak areas are known. A player can know exactly where to attack to get better. But in trading, after a certain point, that process for improvement is much harder to identify. It's not like one can improve on disicpline when discipline wasn't the cause of money loss. And it's not like one can work on better management when things like that weren't the issue neither. When a trader starts losing money due to simply having used a strategic method that has stopped working or has lost its probabilisitic edge, it's a much more complex problem to solve. Sometimes, no amount of hard work, practice, dedication, or experience will guarantee that a trader can fix that or rediscover new edges because the markets are always changing, and one has to always have the knowledge of knowing what methods are applicable to current and future conditions. Adaptation is a very obvious solution, and that's not wisdom but common sense. But it's really easier said than done. To consistently be able to predict and figure the market out every time for a long period is an extraordinary feat that few get ot achieve. One may be able to do it for a few years, or even more than five years. But the probabilities of being able to do it over an extended duration just aren't in favor of anyone in this uneven game where there's always hidden yet vital information that aren't for public access. Working hard, having passion, being driven relentlessly, and being fully dedicated to achievement are things that one can do or have to improve in sports or in most endeavors. But unfortunately, that's just not the case in trading. Or else probably more than a fraction of a fraction of 1% would be able to succeed in it at the end.
This is probably the best nugget of info for newbie retail traders in this whole thread. Also Dan Zangers stuff is pretty good way to make money from the markets....but only when markets going up. Keep your jobs/business and trade part time.
ah. If you played tennis, you might think differently. We used to joke about other sports all the time. I played football for 2 years for fun in HS. It was great, and by far, the athletic ability in developed sports like basketball/football is far greater than an underdeveloped sport like tennis/golf. (developed sport = people in that sport are far superior athletic specimans) Theres no burnout in football. You just try hard. Most sports are like that. Especially what we'd joke as "lesser" sports (sports who's fundamentals are the base of many other sports...like running. We had a guy that was the best in Hawaii in the 800 m, and a nationally ranked tennis junior. It goes one way, not the other (runners aren't good at tennis. Sometimes tennis players can run. Sometimes a tennis player can play football. Football players are never good at tennis. So most sports, just try hard, and you get results. Tennis is actually not like that, hence burnout. What you find over and over again are absurd players with great fundamentals (technical foundations (all strokes) are far superior to peers. And yet, they can't win. (You see this in the early futures/challengers circuits) Theres no such thing as a golfer with a great swing that can't win. Theres no such thing as a point guard with a great shot/great technical abilities that can't win. There are plenty of technically amazing tennis players that can't win. (think agassi during his retarded brooke shields years/falling off the rankings and playing in challengers....and losing) You've never heard of a track guy bitching, "man, i just train so hard and i got faster; i got so fast I'm faster then everyone else. But man, i just can't win" You'll hear plenty of tennis folks, "my serve is really improved. In fact, everything is better. In fact, my name is Agassi (even rafter), and I have some of the best strokes ever. And yet I (agassi/rafter) am losing in challengers." So its not really about effort like in other sports. In tennis, you either have an edge or you don't. In contrast with many other sports, that edge is usually (surprise surprise) in your head. (it has nothing to do with strategy. Its just in your head...I don't know how else to explain it) Think of the SAT again. By definition, most people aren't going to score in the 90th percentile. If you placed a bet on a random child in the US to score in the 90th percentile, you'd most likely lose. However/ironically, I'd think we'd all agree that its really just not that hard to do it. Hell, there are practically entire high schools where the entire student body scores in the 90th percentile. And while the SAT is fundamentally different than trading, the statistics are still the same for the average kid. Heres my point: just because there is an actual statistic saying that only 10 percent of children score xyz in the SAT doesn't mean you won't. and thats actually real data, year after year, unlike this "hey, i know lots of traders who failed (I doubt even 100...don't know how most daytraders would even have that many trader friends)." If you're beating the so-caled "odds", 5 years out (what real study is even available YEAR AFTER YEAR to promote this saying? Researchers over many disciplines still have conflicting studies in their field, so its not even about that...nothing is really going to be entirely convincing, i'm just wondering what study even exists year after year to promote these so called "odds". i'd think you'd have some confidence in your ability to last (the same as if you know you're not a moron and can score in the 90th percentile on your SAT instead of thinking, "man, statistically I'm doomed!) and obvious they are different things. But trust me, its fucking impossible sometimes to get a kid who scored in the 50th percentile even up to 80. You either have it or you don't. I'd say most of us at ET probably "have it" with regards to the SAT. But when it comes to trading, maybe we're all just another statistic from the mysterious one time study on traders, and we're just another average kid who scores below the 90th percentile. Nobody likes to think this way, hence my rant. (please don't give me the "thats because its reality" comment; i think its clear we can't really say anything statistically significant about the issue over multiple periods of time, sources/researchers, blah blah blah) Its just a gloomy attitude to have, with no more weight then saying, "i'm not going to score in the 90th percentile by definition) (at least in studies we have some pre-cursers to success, unlike in trading, where you might just be the average schmuck taking the exam) But that doesn't mean you have to have a gloomy outlook about it, especially 5 years profitable! (you're clearly not the norm at this point. What evidence would you have to the contrary that merits having a pessimistic attitude, based on the notion that the majority of traders fail?)
That's what they don't teach you when you're just starting out (or if you're on your own, what you don't find out until it's too late) -- approaching trading as a career and thinking about how you are going to adapt your edge to a changing market environment. Maybe your edge wasn't meant to last past a certain stage of a certain bull market (in my case). But even if you were warned beforehand, how much could you really prepare yourself mentally for that? The only way to do it is to approach things completely from the ground up, and ask yourself what kind of trading you will need to teach yourself in a way that will still be effective 5, 10, 20 years from now. What are the factors that change with the markets? What are the principles that stay the same throughout? I reached a similar realization to yourself a few years ago; I was "lucky" enough to have made what I could when that particular market was available, to be able to afford four subsequent years of "re-education". Had I started perhaps a year or two later, I would never have lasted this long. At least you've learned what it takes to continue further with the markets should you ever decide to return in the future. And after some time off, who knows? Never say never.
Thank you for sharing your story. I do have a two questions to ask you if you don't mind. Why exactly did you fail at trading? (was it money management, was it your system, etc) What is your method/style of trading? Good luck with whatever you decide to pursue in life, but I'm sure you won't need it. Contrary to what you think, you're still some what young, and I'm sure you'll do just fine in life.
Hey Broken Dreams, I feel for you. My advice is to go back to school and get a postgraduate degree in economics. Even if it means borrowing boatloads to do it, it would get you back on that fresh start you're looking for. Then you could leverage your school's career department and get a job at a consulting firm or on Wall St. Most of those firms looking at econ post grads already assume you've never had a job, so your 5-yr tangent into trading shouldn't be a liability. Of course we're talking about 2 yrs minimum (for a masters degree) plus taking on student loans, but if it lands you into a starting position at a nice firm, it would still be worth it. School is always the best route to a fresh start.