HI All If there is one characteristic that seems to be the secret ingredient to the success of most traders, especially the ones mentioned in the Wizards books, it would be having parents and family with alot of cash to spare. There is one theme repeated over and over in these books. They started trading, crapped out with their own money. But, they all could borrow thousands of dollars from there parents till they caught on. One so called "Wizard" actually came up with the idea of buying a seat on the Chicago Exchange. Duh! Why didnt we think of that? This was back in the seventies. He Actually borrowed 50,000 dollars from his parents and other relatives. How many of us here at elite trader can go to relatives today and borrow 50,000 dollars? Not to mention, that 50,000 dollars back in the 70,s is probably worth more than a million in todays dollars. Sterling
Ah, the age old question. Genetics vs. environment. My opinion on this is two-fold. I think genes do have a lot to do with the equation, but I think that environment is much more important. Someone said earlier that men are created equal. Unfortunately that's just not true. We're born equal in the sense that you and I are equal compared to an animal. But not to each other. Many are born with superior genetics both physically and mentally. Can I become a great basketball player? Sure I can. Will I ever be like Shaquille O'neil? Not in a million years. All the books, training, and practice in the world won't do a bit of good to turn me into someone like him. I just don't have the genetics for it. Unfortunately in this profession it's a little harder to know if you're cut out for it or not. Only time will tell with each of us. So on one hand I do believe some people will never be good traders. There are several pre-requisites that I think you must have to be successful. You have to be incredibly tough mentally, and have a burning desire to succeed. Wanting to be rich isn't good enough. You have to want it more than anything else. It has to be a passion, even an obsession. I don't think people who trade from work or just whenever they have a minute will ever be very good. This is a career. You also must be able to make quick and precise decisions and not look back. Accept the consequences of them after you've made them. (My brother-in law is one of the smartest persons I've ever met, but I doubt he'd ever be a good trader. He takes 3 hours to decide on a movie at Blockbuster and he overanalyzes things way too much). Not a good trait for a trader. You must have a high tolerance for pain. At least initially. You must be willing to fail time and time again and get back up for more. So many people are afraid of failing that they don't even start. And of course you must be ever learning and be able to evolve. What works today may not work tomorrow. Finally, you must be able to change your thinking patterns. ("Trading in the Zone"). Everything about trading is backwards from what you'd think it should be. There are many other traits I'm sure are important, like being quick on the keyboard and mouse, etc, etc that also play an important role. Some people naturally have many of these traits right off the bat (genetics). Others must learn them. The good news with this profession is that I think most of the necessary traits can be learned. The human mind amazes me with it's ability to change. I love hearing stories of people who have overcome huge obstacles to achieve success. The success is there for the taking. It just depends how bad you want it. It all comes down to the DESIRE. And even though the statistics say most people fail in this business, the odds are still much better than say becoming a professional athlete or actor. However. Even after you've mastered all the tools and psychological traits that you need, I think you still need to be reasonable in your expectations. Most of us will probably never be market wizards or become multi-millionaires and billionaires. There are always those in every field that have superior talent that can't be learned or taught to others. Can a very nice living be achieved though, doing what you love? Absolutely. That's my plan and I'm not going anywhere until it happens. Success or bust!
I think trading can be learned. My first try at trading was about 2 years ago. I invested $6000 and made $1000 in about 3 months. I was just lucky. Last year I tried again and got caught by the selloff in October. I turned $14,000 into $4000 in about 2 months. In both cases what I basically did was to enter my positions and then just hope that they would go up. I had no idea what I was doing. Now, thanks to books by Dr. Tharp, Jack Schwager, Edwin Lefevre, and reading posts by all the excellent traders on this board, especially Robert Tharp who really drove the point home about risk management, I've traded $150k in the last two weeks and am up $25. Breaking even may not sound like much but if I had of traded like I did before I would have been creamed. One of the main things that I've learned that has helped me besides risk/money management is that I need to take responsibility for my own actions. If a trade goes bad, rather than blaming the market or assuming that others have an unfair advantage, I just take responsibility for the loss myself and GET OUT of the position. That's what I like about this game. I am the captain of my own ship.