Consistently Profitable Traders - Going Red to Black

Discussion in 'Professional Trading' started by DEM BONES, Aug 14, 2010.

  1. What would you say was your single most important realization or action that put you over the top to become a consistently profitable trader?
  2. Cheese


    There is no harm in this question which may elicit tips for good play from ET members. However the single most important thing by itself is likely to be insufficient in becoming highly successful.

    Real success requires the dedication, time scale, experience and intense savvy which amateurs almost always will not supply. There is no quick fix.

    But you can make yourself rich from the markets. An individual can do it. Other than yourself standing in the way, there is no bar to riches. That is what the markets ultimately offer.

    You have to go where an individual with limited capital needs to go to start the process. Therefore begin your study of the days gyrations in a selected market (eg CL); the gyrations are the sequential upswings and downswings of price, open to close, each trading day.

    The sum of the swings is the maximum points a market offers daily; you add together the maximum points offered from each swing to give you the days total maximum points. From that you begin to see how you might start to capture some of this through the routine of a reliable daytrading methodology which you will need to apply for the task.
  3. As cheese stated...there is NO single realization or action that makes someone a consistently profitable trader because the markets and trading is too complex for such.

    Instead, there are many variables and on any given trading or more of those variables will have more impact in your trading results than the other variables.

    However, if you need something to bite on...all the profitable traders I know (individuals I've watched trade several times with my own two eyes) of the commonality I noticed is that they treat their trading as if they were self-employed business owners instead of treating it like some serious hobby or as a way to make extra spending money.

  4. A thoroughly tested trading plan.

  5. Focusing on risk control and the downside; you can control it.

    The upside is an unknown and so should be less worried about.
  6. I realized that I had all the knowledge I needed and getting more knowledge was not the answer. With that off the table, I was left to figure out what the problem was, which was that my own behavior was inconsistent. Then I set myself to basically becoming a (discretionary) robot and just simply doing what I knew was the right thing.

    It was not a flash-of-lighting inspiration moment, but a slow realization. Much more of a process than an event.
  7. bone

    bone ET Sponsor

    Just try to be consistent. I try to get my clients into the mindset that the biggest thing for them is to string together successive net positive days in a row, and to have modest P&L expectations.
    All kinds of very good habits arise from that simple mindset - the trader becomes selective, the passive/selective trader reacts to the market instead of getting caught in the market, confidence grows, etc. etc.

    Modest expectations will also keep a trader from forcing trades - and nothing good ever comes from forcing trades.

    This can be a very understated but powerful tool - you'll be surprised how many $5K days you will have trying to make $500. Seriously.

    Also from my experience, consistent traders get all kinds of cash thrown at them if they ever choose to go professional (salary plus split) proprietary.
  8. As long as the loss is small and within the max risk parameters, losing is just a required expense in my business model.

    Any other loss is not acceptable.

  9. Focus on trading, not on P&L for the first year. The first year shouldn't be about making money, it should be about learning setups that work for you, how to find more of those setups during the day and refine your skills at other setups.Put in proper risk parameters so you don't blow out your account or overtrade. Just learn how to trade, even if that is with 200shs lots. Be discipline with your trading, put in the hard work everyday and taking it seriously. Most important thing is to try to improve every day at trading. After you have done all this you can go from making a few hundred dollars a day to a few thousand because you now have the foundation of trading knowledge. Losing $500 in a day doesn't teach you how to make $500.
  10. Consistently profitable traders are from day one. Those that turn profitable are scarse examples similar to those people who win the lottery - and any reference to them as examples is selection bias. You either have it or you do not. More people turn unprofitable from profitable but very few turn profitable from unprofitable.

    It is like asking a great painter like Picaso, if he were alive, what was the single most important realization that put him over the top. None, he already had it. Trading profitably consistently is even more difficult than being a top painter.
    #10     Aug 14, 2010