Are there any other people here who have been at this for a LONG time and are still not really any further than when they first tried?!! Lets say, at least 3-4 years of FULL DAYS practicing/studying/starring at charts till your eyes bleed/demo trading/live trading etc. I find it hard to believe that it's actually possible to succeed at this 'long term' coming at it from a charting angle (which is what i've always tried) (I know of a few legitimate/rich traders who advise against charts/Technical Analysis/price action etc) I've had spells of success over the last 5 years or so, but in hindsight, It was just luck. The market is good at fooling you into thinking you have an 'edge'. Even with 'context', chart patterns tend to 'work' as much as they don't. I feel slightly alone, though. I'm sure there's others out there (the current state of the pnl thread would suggest so, compared to the olden days), but even with the anonymity of the internet, some might be too embarrassed to admit such failings. I'd like to hear from anyone else in a similar situation, your story in bried, your conclusions, and your plans going forward. thanks
You've described marriage, Eddie = finance all her whims and fantasies, then the babies and their education, get no sex after the first 6 months or so, then in the doghouse for the duration. Our plans going forward? Rent, rent, rent.
I've been at this for a lot longer than 4 years. The combination of sometimes making the same mistakes over again, the lack of a viable short term trading plan, and lack of substantial $ trading resources has meant a s-l-o-w bleed. However, I have definitely figured out that I can make a steady income, about 1%/month with long term (not day/week but month) hedged trading. But I can't afford to make a living with the 1%/month on my meager trading capital. What's kept me alive is a low paying part time job after losing my professional job due to my age and outdated skills several years ago. Crazy as it sounds, I have never lost hope, that someday I'll find the holy grail. Maybe it's because I like trading.
Great topic. I've been at this longer than 4 yrs as well and you really got me thinking about some things. I may come back and post more later but I think the most important thing for me is I haven't given up hope. Yes this is a lonely game and you will get lots of negative feedback, even at times from those who are successful in this arena. Many of the successful traders I have either rubbed shoulders w/ or read about have gone through some tough times before breaking through.
My very first year trading was flat. I jumped right in without knowing anything and learned on the job. I made a lot initially. All my first picks were winners right off the bat. It was all beginners luck. I had some that would gap 10% on earnings that I purchased days before. It seemed too easy. Then I lost all of that in the same year and went heavily negative because of some leveraged plays I put on and a sector rotation sell-off that I endured. And then right at the end of that year I made up all the losses and went home flat for the year. That was my first year. It was the best tuition I could have gotten in the world of trading because I tried every strategy there was, and tried/learned every financial instrument available. I also went through the emotional roller coaster involved. The high of thinking you are the shyt making easy wins, and the lows of thinking you've lost it all, to finally breaking even and being thankful. I like to think I have matured since then. I have come to the conclusion that trading is mostly dumb luck and a bit of skill. While black swans are around every corner and you are unable to see the future, there are certain trades that are better than others. There are no 'winning trades', but there are 'better trades' than 'bad trades'. Nothing is guaranteed. No chart reading, fundamentals analysis, analyst report, etc will give you a real edge. Sticking to what seems to work i.e. 'better trades', and having good risk management is the key to long term survival. Also, knowing when to quit. I think smart traders go big and quit once they're up. Investing is not gambling, good risk control on trading is not gambling, blah blah blah.... but just treat this like any other casino. You have to quit while you're up. If you reached your goals to financial independence and can retire early, then I'd quit on the spot and not bet on the market anymore. Risk:rewards not there once your financial goals are reached. I think at the end of the day, as in many aspects of life, don't ever take anything for granted. Don't be too assured of yourself. Having doubts, being humble, having a healthy dose of insecurity and civility is what keeps you on edge and on your best game. People who think they have everything figured out will be hurt the most.
I'm personally a skeptic when it comes to using TA/charts in isolation. I'm not suggesting there aren't people out there doing it profitably, but IMHO it's a real rabbit hole. Very, very easy to remain in denial for a very long time since there's always a way to paint pretty pictures after-the-fact, and humans are intrinsically drawn to pattern recognition problems so it's kind of a trap even for smart people. Your legitimate/rich trader friends are probably right. I HIGHLY doubt the majority of successful traders use TA as a primary strategy.
That's kind of my thing, too. If I didn't enjoy it and find the whole process interesting, I'd have quit about 5 years ago. I've given a large chunk of my life to this and have nothing to show. But it's the only thing that even resembles 'work' that I've done that I don't hate. If I could get a job daytrading where I was guaranteed minimum wage, I'd probably take it! Happyness is better than money. Be sure to come back. Would be intertested in your thoughts. Good stuff. I've never really had a 'cocky' stage where I thought i'd had it sussed. I've had weeks where I might have taken 60 trades with equal (tightish) stops and targets and have won like 55 of them. Felt amazing but even then, I was pretty sure it was just extreme luck. The same chart patterns usually then flipped the following week and i'd give all the gains back! I'm still convinced that there probably IS a way for us retail traders to get an edge. There's also a chance that it is completely impossible and we're doing the equivilent of trying to get an edge playing the roulette table. I hope not! x2
Yeah but if its not making enough to support living costs then its probably not gonna work and maybe even flipping burgers at Mcd is better. Unless you have other sources of income or support. Advantage to trading is you're your own boss. Myself, I didn't have a cocky stage either. Just a whiff of over confidence and complacency about how easy it all seemed. Anyway I learned very very early on to be humble because the market humbled me very quickly. My 1st year trading really took me through the trenches both in terms of the kind of markets I faced and the emotions too. Some others may have endured years of wins before they get smacked with a huge drawdown, so those people probably grew used to being cocky. I definitely had a crash course into trading on my first year and ended up pretty much flat on the dot. Pretty spectacular when I think back at it. The main advantage from the roller coaster 1st year was I quickly ruled out certain trading instruments and trading styles that I didn't think was suitable for me and developed strategies around others I was more comfortable with. Also made me more risk averse in general, rather than always go big go home, which has been guiding most of my strategies ever since because I'd never want to be in those kind of drawdowns again.
Brett Steenbarger posted to his blog the other day some stats on daytraders. It should give some insight into this question. According to one 15 year study about 13% of daytraders are able to turn a profit after fees in a given year, but only 0.28% are able to do it year after year after year. http://traderfeed.blogspot.com/2014/08/what-proportion-of-daytraders-actually.html So yeah, lots of strugglers. When it comes to daytrading, it would appear almost everyone (99+%) is "struggling". Let me tell you, I have heard some depressing stories. Last year I lurked in a couple of chatrooms after hours and read chatlogs where guys talked about their lengthy struggles trying to trade futures. A common refrain was that despite the negative impact on their lives they felt they were "in too deep to turn back now". I was almost speechless after reading some of that stuff. Cautionary tales for sure. Those guys will probably need some of kind of therapy before they can move on with their lives.
When I hear stats like this (and i've heard them before) it starts to sound like a lottery. You can imagine being on a forum for lottery players, discussing methods, lucky numbers, best areas to buy tickets, best days to purchase them etc etc! Is it all just survivorship bias (accounting for the 'winners'??) Well unfortunately, that would probably include me! I'm in the ''in too deep to run back now'' mode! My Thinking: 'People are 'apparently' making money everyday trading from looking at charts. Not many people have looked at more charts than me, so I'll surely get there soon!!' Problem is, of that tiny percentage of apparent winners, some aren't. They're actually just gurus/vendors/failed traders trying to sell you something. And then, of the now even smaller pertentage, some of them are just being 'fooled by randomness', going through a lucky spell. I don't want to drift off too far into my own concerns, though. More just comfort in numbers from others who are 4-40 years in, and still feel like they're essentially flicking a coin!