For those of you who derive most of your income from trading, do you worry that something could change that would force you to change careers? It could be anything, from new legislation that makes frequent trading prohibitively costly, or the big players automated trading becomes so good that only those with massively expensive infrastructures and advantages of scale can compete? Or maybe things just change and the edges you once had slowly are no longer profitable? Are these real concerns, or if you work hard consistently to stay on top of how the landscape is changing and always looking for new and better edges, will there always be a way to live off trading income?
Not a chance, for the simple reason that the "big" players (aka smart money) will ALWAYS need the "small" players (aka "aunts") to make money, especially in zero-sum games like the futures or the Forex.
No concern at all. For myself, it's not a matter of 'gimming a system' or a method. Of course, an individual could do that, and make a ton of money for as long as that edge is profitable. It's why I enjoy creating new methods, for new scenarios and new markets. Completely different approaches to the same market even. When you understand the theory behind trading? There's no "gimmick". No "getting in with the right crowd". It's simply a matter of understanding structures and that a market is simply human psychology put to an auction. That's all it is. Successful people have been playing at markets for eons of mankinds existence. And the whereas the approach may be a bit different, or the market is not quite the same? The underlying principles remain the same. Always.
No I don't worry. Better to spend time on the problem than worry than have two problems. I don't worry about death or taxes either. I guess it could happen but I think it is unlikely. Many people I know have been forced to quit yet I still know a few that soldier on. There are so many methods to use and I trust myself to find and exploit them when I need to. So far, so good. I think even Jesse Livermore complained about years in a row where he was unable to make money. So slow periods happen.
So it's more like a professional sports coach who must constantly keep his finger on the pulse of his sport and make adjustments to stay competitive?
Obsidian, bronze, tulips, stocks, index futures. Ten thousand years of trading, so should continue for another few years. And as long as prices change there's profit to be made. Even if the US financial markets cease, there are other markets.
How true. For example, at one time the great Greek philosopher Thales cornered the entire market in olive-oil presses and made some serious money... 6th Century BC!
There are a lot of good points there. There are scores and scores of methods. Firm asked me once how many methods I had, and I sorta chuckled. I mean ... phew, more than I can count. But at certain times? They just won't make money. Like ya said, at times, for years on end. The absolute worst thing I could do, would be to try to push a method that just won't work in the current environment. I'm making most of my money at the moment in valuations on equities, and all-weathers. Last year? Barely squeaked out 532 BPS on valuations, and 300 BPS on all-weathers. This year? They're both on fire. Best bet is to know a lot of methods, and know when each work best. Oh, and to pray that you've got them running when it's time for them to run.