My compliments on a very excellent statement of the conventional wisdom. Ed is 59 and he needs to deal with each and every one of these issues and then by pass them.
Fast- You might already do this. Figured I mentioned it just in case. However, once you are in a trade, you can write down in your trade log, the MAE(Maximum Adverse Excursion), numbers then once the trade is completed, the MFE. Two things this will do. One, perhaps more importantly, it will give your mind something trading related and constructive to do while you let your trade work for you. Secondly, it will provide you with an analysis method by which you can go back to your excel spreadsheet or whatever, and run the numbers on what your typical loosing trade looks like for a given setup. Mine are as follows; If I get into a trade, doesn't matter the setup, time of day, prayers, Lucky trolls on my monitor, .... if once I enter the position the trade goes +0 to +.50 tick in my favor then immediately goes against me, then toys with me, coming back to -1.0pt. of my entry, then starts back out again, my MFE analysis starts running in my head and these are about 93.7% loosers for me. I run 6pt. drop dead stops when trading the e-mini Nq. However, this analysis along with various exits strategies based on indicator values gets me out usually before hitting the wall. just a suggestion.. -momo
Hi Ed. You are indeed a brave soul. Retrenched at 59 has to be rough, however it just COULD be the start of something great - life is in the perception IMHO. I found the late Bruce Babcock to be a beacon - I would suggest reading each of the links on this page: http://www.rb-trading.com/begin.html in order - print them off and read them a few times. They represent a good starting point for your search. The key (or at least one of a whole lot of things) is to find what style of trading suits your personality. For me it is medium-term position trading, for some it is hot and heavy daytrading. When you find something that makes sense to you, work up from that. And it will take time - expect very little for the first year or two.
People will always tell you why you cant succeed. I like to see there face when I do what they tell me is impossible.... In short, if you have to ask then you will not be successful....To know you will be a "Successful Trader" is what you need to decide for yourself. short story: I purchased a brand new CORVETTE in 1996 for Cash when I graduated as an electrical engineer at 25. (I started in Telecom when things took off) I basically starved to get through the engineering program. the car was my reward for the years of discipline it took to become an Electrical Engineer and a symbol for everyone that said I could not do it. Everyone will always tell you that you cant do what they do, give me a break, if you are determined you will do it. NEVER QUIT. I competed with some of the smartest people in the world. Trading is no different, learn the rules and destroy the competition. See you on the screen. Good Luck.
Perhaps an additional question: What would be the average lead-time for an average guy to become a constantly profitable trader?
Good question. Starting from scratch...3 years minimum, assuming no regular access to a successful mentor. That might cut a year off. Year One - Basic education in TA, FA, market action and software/hardware issues, paper trading, full time. Year Two - Trading small lots through every market cycle during the year, learning through mistakes, mastering emotions, learning the value of discipline, matching personality and system, starting to find a groove that fits. Year Three - Assuming success at the learning curve, start raising position sizes, and begin to turn a profit toward the end of the year. With luck, dedication, discipline and a trading account with at least 100K, might be able to start paying the mortgage by year four. Of course there are exceptions to every rule, but if you are talking "average", this is my best guess having gone through all phases of the learning curve myself.
I disagree that it takes X years to become profitable. I think it takes however long it takes to find/create/buy/steal/invent/learn a profitable trading system/strategy. Profits are created by profitable strategies. While it helps with execution and emotional control to have experience, these are minor factors in profitability compared with the underlying strategy. A profitable strategy will still be a profitable strategy if executed by a newbie.
Considering that many stategies have blown up that otherwise were benchmark stategies for years, then what would this newbie do? We are talking about the ES right? Michael B.