Candle- Bravo! very well stated. I'd like to add one thing to that line of thought, because I wholeheartedly agree. That is to say, consider at the onset of your journey before encumbering the "overwhelming" odds, that you seek out a successful Trader. A Trader of any market. So long as he/she is consistent and has say.. 10+ years of exp. This can/will put you light-years ahead. I'm speaking here from my own exp., and what my mentor did for me mentally as well as technically, gave me an edge right out of the starting gate. Some coming to this board looking for, "Getting Started Advice" may be very bright, very sharp people. Might even be well capitalized-100K+. Even so, the benefits of learning from someone whose made some serious mistakes as well as made some very right choices are obvious. a.k.a. - Why reinvent the wheel... Focus, discipline, patience and above all persistence will tilt the odds in your favor as well. all the best to you- momo
Here's a few things that have helped me greatly: 1. I think the #1 thing that kills you when you're beginning is the varied market conditions that occur in the course of a typical year. You have to change your thinking as the market changes personality and this is often seems counterintuitive when you're starting out. 2. Take the advice of some of the successful traders on this site (particularly in past threads). You'll quickly learn which ones know what they're talking about and which ones are just trying to sound impressive. Their good advice has saved me hours of wasted time. 3. You'll find that the stuff that's not emphasized in the standard TA books, like support/resistance, money management, trading psychology, etc. is much more important than all the indicators that you're going to learn about. 4. I know a lot of people say to paper trade, but I think you should trade from day one with at a little bit of your own money (not your life savings please!). Why? It's got to HURT when you lose. You learn some of the basics real fast (that they generally don't tell you in the beginning books) when you see your account bleeding! Good luck...
the #1 thing that kills beginning traders, and experienced traders is a lack of money management. Everything else is just entry strategy, and there are probably 100 different perfectly decent entry strategies, and only a few decent money management strategies. If you got no money management skills, you have no business pretending to be a money manager.
the answer to the question in the title of this thread is a simple "NO". the average trader doesn't make money, they lose money. Not only that, but if you have a good year your first year in, you have no way of knowing that it isn't just a hot streak. If you made money in the late 90's it means absolutely nothing.
I could not disagree more. First, the title of the thread is "Can an average guy make a living at trading?" Yes - provided he puts in the time and effort to study and learn, and develops the patience and discipline necessary to make proper entries and exits. Keep it simple. Always keep learning. Exercise patience and discipline. Good luck.
If you have been successful in a past profession then you know the skills that are required in trading. The transition will be in some ways easier if your background is engineering related: however, you will also be at an advantage if you have run money since it requires good money mangement and finance skills to excel once you get to certain point. Good books that you should at least be familiar with are the old classic "technical analysis of stock trends" by edwards and Magee and the Financial Books by Fabozzi which cover Mortgage backed securities and Bond markets and pricing. Ther are many other good books. Also check out the Merc Website and the NYSE websites. Capital ? The more the better. It is very difficult to make a living on a trading account of 50K or under and at even 100K you will need to have good skills to continually succeed. Dont be fooled though: this is a tough business to excel in and if you have no background you will need to get some mentoring as you start. If you cant find any other deal then trading in a prop shop for a few months or even a year will at least get you a jumpstart: just be very careful in these waters as every shark will be after your money and may not be interested in training you in any way. However, many prop type shops are losing numbers with respect to their traders so there are quite a few open desks about and if you ask the tough questions and cut a good deal you might get some decent training ....
No. The average guy does not have the capital or the tenacity to survive the learning curve. This thread is a serious wake up call to all newbies. Dont buy the "trading is simple" BS you hear from some traders. How simple can it be with these kinds of failure rates? It takes some people over a decade to become profitable. (Including some market wizards). It takes most people at least several years and a wad of cash with no guarantees in the end. peace axeman