wow... & you're not kidding around. That's the worst part. Both of them must've had a rough life knowing that they were one of the very few successful traders, and the fact that they were taking money away from the little guys like ourselves should've ate out their heart. Their hearts must've never reached hell... it was must've been consumed here..
You can't use a dollar amount to judge performance, you have to use a percentage return. A great day trader trading a small account might double his money but not make as much as a lucky "speculator" with a big account. I think risk management is the better measure of a great trader anyway. He who takes the smallest losses wins.
Then your book is guaranteed to be filled with mention of many monkeys sitting in front of trading stations. In a random distribution there will always be a few who dramatically outperform the rest. This does not indicate any measure of skill. You must first prove the results could not have been attributed to randomness. -Raystonn
That is a GREAT myth. And, only not-so-successful traders that haven't been around the block would say shit like that. As long as there is an "Average Annual Household Income" in the U.S... the performance of a day trader or even a money manager can be measured in "MONEY" and need not in "%s"...
When you show up at the grocery store, the cashier doesn't give a shit how many %'s you made, you gotta pay in cash if you want the can of beans. In 05 I used to love to sit around looking at my %'s and how much I beat the best of the best out there with my 140% return. Too bad my 140% return only brought in $4K.
sorry - i make far under a million. i'm very happy with my trading. i'm very happy with my results. i'm very happy with not reporting to a boss, having freedom, working from home, taking a day off to visit friends at their day jobs (including other traders!) when i want, etc. to my mind, i'm successful. whether that's successful for others is an open question. but it's irrelevant to the question whether i'm successful *to me*. sidenote: i was talking with one trader who trades a pure OTC market, trading an institution's money. and i said something about how i could never trade how he was - with no firm quotes, no version of level 2, not 10,000 different 'markets' to trade (ie. 10k different stocks), the amount of return expected for him, etc. his response? "i could never trade how YOU are trading - knowing it's my own money up, no guaranteed salary", etc. obviously, his bonus >> salary, but it was interesting. and to answer the OP: first, get to not losing much, but making good trades and cutting losses. then slight profit, more good trades (or better gain on those good trades) / less losses. THEN go for bigger things. and as you noted...different salaries in different market, you may want to compare it to 'average salary'. if you're a techie in nyc, for example, your avg will be MUCH higher than that of a techie in...memphis. so you could make less as a 'successful' trader, because your cost of living / salary you could make outside of trading would be lots less.
Good point! I agree at all! As soon as you make a consistent profit day trading you can be considered a good trader, since you are much more better than the average. On a zero sum game, where a few guys make the most of the money, we know the average expectancy of the mean is completely negative! (I hope the hedgers) After you developed a positive expectancy, is just a question of volume, and being able to trade that volume. But don't forget the risk parametrers are important as well, standard deviation, volatility of you equity, expusure, degree of leverage (mine is 120:1 !!) and maxim drawdown!
Hey, thanks for reminding me why I hardly come around ET any more. I used to like this place as it was a nice retreat from the juvinile flames on the Yahoo boards. It's ignorant replies like yours that have made this place just another Yahoo message board. More to the point, I don't need a dollar amount OR a % return to know I am a good trader. My consistent P&L keeps me living well.
In NASCAR everyone is trying to win....many of them are good drivers just for being in the big races. Where trading is an internal competition and to simply make a profit requires you to be better than the others that you are trading with FOR THAT DAY/SESSION. The money measures your abilities. I think I am understanding a little more...eventhough this thread has the possibility of ending up in chat.... Thank you worthytwo for this thread....and welcome to ET ES
I'll use an example to show why I believe the "MYTH" that risk management is #1 priority.. Tony Oz, in the book "The Stock Trader", made a profit of $16,000 + in four weeks trading a $50, 000 account. A 32.55% return in a month.(he didn't compound either) He made 116 trades, 75 winners & 41 losers. He used a trading plan based on support and resistance and always knew where he wanted to get out if the trade went wrong. Now, suppose some newbie entered the market with a $50,000 account at the exact same time as Tony and he "speculated" that the QQQ (symbol at the time) was overbought. Mr. Newbie puts ALL $50,000, his entire account in a single short position of QQQ. Newbie would have made a hell of a profit in those four weeks. Much more than Tony Oz did with his well thought out plan. Now, to the OP's question, is the newbie a better trader than Tony Oz just because he made more money? I think not.