I won't argue with the posters that state that if the means to trade profitably are not there, then serious consideration should be given to pursuing other business ventures. Certainly this is true. For a while I couldn't really grasp the idea of "how much starting capital is enough" until I blew out my first account. From that point I appreciated that trading should be treated with no less seriousness than starting any other business. For me, managing risk and capital is my one and only "edge" (for lack of a better word), and that involves trading multiple systems in multiple markets with careful attention to capital allocation. This requires serious capital (relative to a regular working stiff like me), and serious discipline without any room for laxness. If I could, I would warn every newbie of what is truly required in emotional, mental, and monetary capital. It is most possible to succeed, but only if you're serious enough to bring the right resources and humility to grow with your trading business. If every newbie came to realize this from the start, there'd be a lot less fresh blood for the market to feed on. My point for rambling is, these traits reflect the love and passion for the trading business. To bring anything less to the table is simply an open invitation for failure. RoughTrader
trading's just another business... just because anybody can trade as a sideline doesnt change the fact... if u suck at a particular biz, draw the lessons as you have, and do sthg else... nothing special...
You sound like a break is definately good for you. Consider getting a good entry level job that pays well, such as a bank teller. When you're ready, open a FX account (mine's at Oanda) and trade on very small size to relearn the markets. I suggest trading on cash with $1000. The FX market is open 24hrs a day for 5.5 days a week. The idea is that trading is like driving a car. No matter if you learned on a sports car or a sedan or a truck, driving is driving. There are differences, but once you get the idea, you can switch over without too much trouble. FX will give you the chance to have a day job and a life (b/c it's 24hrs) and you can do so on very little size. Trade for the trade and not for the money if you get what I'm saying. If you're one who has a hard time with greed, trade with $1000 when each pip is only $0.10. The biggest overnight move would be 200 pips in which case you'd only lose $20 in your account. You can be a student of the market as you pursue your other real life goals.
Oh, I'm done. A lot of you want to know what or how I traded, but I have really no secrets to teach because I've tried so many things and they have all worked for me for certain periods, but the problem is that they didn't maintain long-term consistency. Strategies don't last forever. Just when you think you've figured some profitable plan, you might make good money for awhile, but before you know, you're forced to the drawing board again to chase a new system because old methods have stopped working. There were optimal strategies in 2001, 2002, 2003, etc., but they were only good for certain periods. Change in market behavior is pretty much guaranteed. I think any long-term trader would agree that very few strategies remain robust over a long period unless you have inside information or lots of access to arbitrage. Things like discipline, money management, etc. are very basic but not special skills. They're essential concepts and everyone should have them down like ABC's, but they are not keys to making money. Because at the end, you still need profitable strategies to make money. With so many constant changes, an obvious solution for a trader is to find ways to adapt to new market shifts. Well, that's easier said than done, especially if you expect to do it consistently for a long period. Sometimes there are gradual shifts in trends; sometimes there are drastic shifts. Characteristics are observable. Former super traders wouldn't be selling their old methods or writing books on archaic strategies if they were still working or if they knew how to continue making money in the new markets. And I wouldn't really equate running a restaurant business to trading even though the initial success rates seem comparable because unlike trading, the formula for a successful restaurant is not really going to change that much. By your second or third attempt, you should probably have a fairly good idea on how to run a good restaurant. You might have a better idea on how to have a better marketing plan, better customer service, better food, better settings, location, supply cost reduction, etc. Those acquired strategies are probably going to work in the future and aren't going to change that much in the restaurant business. But in trading, it's not that simple because strategies that you have acquired from previous tries may sometimes even be strategies you'd want to totally avoid in the future. It's pretty rare that a trader can trade well with the same methods for many years. Most profitable strategies have expirations and will be unreliable some day. The hard part is figuring out when that expiration is.
I am a pattern trader. I do not see how this kind of trading can ever go away. A bearflag in a strong downtrend is a moneymaker and barring some drastic change in human nature it always will be.
You make a good point because people think the markets are random when they are not whereas poker actually is random. John
Say you are the CEO of a fast food empire (McDonald's for example). Say that at the present time, you enjoy steady revenues and a healthy financial statement. Say your success is due to a well-diversified product (in this case, menu) line, composed of big macs, quarter pounders, filet-o-fish sandwiches, various chicken burgers, fries, desserts, breakfast items, etc.etc. Then let's suppose the media blows the BSE epidemic out of proportion, and your beef-based menu items suddenly turn from generating profits to losses (excess inventory, logistics networks need to be readjusted, etc. etc.) What do you do? Well, first off, since you have invested in infrastructure to provide menu items without beef, you are still generating revenue that can at least offset losses. Second, your marketing team thinks of new menu items such as salads, chicken wraps, new and improved all white-meat chicken nuggets, new desserts, an overall health-conscious menu. Suddenly, you find that your innovative thinking pays off and this new line is able to offset losses caused by beef-based products in a long-term, sustainable manner. Sure, the BSE epidemic hype turned a source of revenue into a cash outflow (liability) but this does not mean you close shop. Traders, I cannot emphasize how important it is to have broad exposure to a variety of market-system pairs. Learn to do this, and you won't be worried if your big macs don't sell anymore. RoughTrader
When I was working on the floor there were the same guys year after year or they dissapeared after few months, nothing in between.