im with everyone else. this is full of shit and elder just embarrasses himself with how little he knows. the reason being is simple: day trading probably requires more mental discipline than any other time frame. speaking from my own experience i dont think most 20 somethings - especially those in their early 20's have the mental maturity required for the said discipline. im not saying that 20 somethings cant trade (i would never say that cos i know steve t will be down my neck saying he earns $xxxxxk per whenever ). im in my early 30's. most successful traders i know are this age or older. you cant have that much experience at 20. i have spoken.
There is a sample selection effect at work here. Those in thier 20s have the requisite risk profile: No obligations, few fixed costs, and the time horizon necessary to try something at which they could potentially fail. Most traders struggle for many years to become profitable. A more interesting statistic would be the percentage of 30-year old + traders who BEGAN trading in thier 20s, who are profitable. My guess is that the number would be high - assuming they began trading in thier 20s and kept thier head in the game. I am not talking about Joe Schmoe who puts in buy and sell order to his TD Waterhouse account while watching Mad Money. Also, don't forget - many prop traders have 1 or more false starts. They blow up thier first account, then go back to work to save up to try it again. All of that takes time and will naturally squeeze out the less serious, driven traders. So you really have several different data points to consider: 1. The percentage of profitable 30-year old + traders who began trading in their 20s. 2. The success/fail ratio of 30- and 30+ year old traders as a function of #1. 3. The average time to profitability.
I think Elder provides good insight and despite his prolific career as an author, he only drives home one point: Channel trading is a high probability strategy. Extrapolating from that, you could say that he believes in volatility mean reversion.
what do u mean by day trader? do u mean someone who goes home flat every night, or do u mean someone who trades in front of a live screen every day?
Elder's main point though is probably a good one. --No more than 2 percent of account balance lost on any one trade.
Not to be tautological, but by DEFINITION those who "began" trading in their 20s and are now in their 30s are the SURVIVORS. That introduces survivorship bias. Because those are in the group that persevered and succeed in some measures throughout all those years would be a "success" in some sense. 99
well at least from a mental point of view, he seems to know some things, as far as his trading experiance, i dont remember reading anything about that in his book. - nate