100 % in agreement most people fail at trading, particularly daytrading, and most who post on this board are failed traders, even those who claim otherwise and are willing to help.
Although many will fail, there isn't anything out there with a better cost to benefit ratio. It seems like these days, most jobs will become obsolete or taken over in the near future. So going down another road is no guarantee of success in the long term. In addition to this, there is nothing more rewarding than doing something for yourself. Going to school and getting a job still means you're working for someone else, under their direction, and at their mercy. Trading allows one to circumvent this. Sure the win rate might be very low, but the payoff is huge. Other things out there might have a higher win rate, but perhaps terrible long term lasting power.
You comparing oranges to apples, even if you don't like the prospects of most jobs, at least most of them will pay for your time, if most traders fail, not only will you not make money trading, but you will lose, not to mention opportunity cost.
I always think of "edge" in purely statistical, probabilistic terms. I'd define it as "the degree of confidence with which you know that backtesting and/or forward-testing have reliably demonstrated that it's a method which consistently wins more collectively from its winning trades than it collectively loses from its losing trades". I hear you ... but "all those other things" you're thinking of, the practicalities, skill-set, and so on, all of which are equally necessary, I think of as "technique", not "edge". I'd say that the trade-management rules ought to be part of the definition of the method, part of the fixed parameters that form the determination of whether or not it has the statistically proven "edge" in the first place. You need lots and lots of different things in place, to be able to trade successfully over the long-term, and any one of them being missing can prevent that from happening. But I think it's fair to say that "lack of a (statistically proven) edge" is a very common reason - perhaps the most common single reason - for aspiring traders not making it.
It was a dip-buying system which were very popular back then (around 2004-2006). They just didn't work after the financial crisis and mine actually ran into problems before. There were some backtesting errors as well. I started in 2003 and had no knowledge of the financial system nor trading, so I'm not beating myself up for those dumb mistakes. Edge is "one thing" for me but there are many edges. You need at least one good one to get going. Majority of my trades don't even have stops - I know many will crucify me for this but once you factor in your maximum loss per position, you can live with it. It's important to note I have both long and short positions on most of the time, so in case of a meltdown I won't suffer a meltdown myself. I consider entries most important, when you have poor entries you need perfect exits. And why would the person with poor entries have perfect exits? it's illogical, if you can come up with exits you should be able to come up with entries.
Trading successfully, at least in the long run, is like a complicated Swiss watch...you need everything to be there -- if one component is missing in the trader...that trader can blow his whole account, eventually.
I tend to agree as well. Some say the entry is least important but I don't see how this could be. If your entry is good, you're not taking much heat, and if you are, then this tells you right away the trade isn't working so you can get out. As for the edge discussion, I agree as well, but I'm not sure if what you say is specific enough for me. So many things have to work together. The OP might actually have very good trades, but horrible trade management. If perhaps all he does is move his stop or target, maybe he would be profitable. So this could be one edge. The other edge might be that he isn't taking each trade that he wants to because of fear, perhaps fear from the previous loss. That could be another edge he isn't exploiting. But all of this to me doesn't really mean edge in terms of "if you do this, you will make money". The "this" is a combination of probably 10 things. If you take any one of those things away, there won't be profitability. On their own, each of these things won't get you past the finish line. I've seen over and over that one of the biggest edges that traders have is experience which allows them to discriminate between trades. There might be little nuances that prevent them from taking a trade, maybe something based on another market they watch at the same time. Anyway, so I guess what I'm saying is that even though you say you need one good thing, I'm not sure what this one good thing can be because if all the other parts don't line up, this one good thing will appear like a loser. Precise criteria for trade entry can I think be very very good, but without applying this at a key level, or perhaps at a key time, or perhaps in conjunction with the general trend of the day, etc., would mean this trade entry might lead to more losses than profits. Anyway.. just thinking out loud. Edit: Opps, I think I combined your post along with the post of lawrence-lugar in my reply.
Well, yes and no. Certainly the possibility of losing money in the market vs. not in a real job is true, but here is what I would say. Imagine wanting to get into the taxi business these days and having to buy one of those ultra expenses licenses. Do I go the route of investing my time and money into a taxi business or in the markets. Perhaps I am bound to always make at least some money in the taxi business, but the prospects over 10 years are just as bad given Uber and self driving cars. Both are huge threats. I guess a filter I should have mentioned when I replied was not just doing something to survive, but to thrive. If you want to thrive, trading, although unlikely, is one way to do this, and education and a job, in the long run, can also lead to failing at thriving, although yes, barely surviving is more guaranteed.
If you have the knowledge to go along with passion, that driving force… your "secret sauce" will eventually happen. Good luck!!
Reduce your risk, understand its about acquiring knowledge and making that nugget of information yours... 1) Reading Price Charts Bar BY Bar - Al Brooks 2) High Probability Trading - Marcel Link 3) Trading from your Gut - Curtis Faith "Tough times don't last but tough people do" -Akbar Gbaja - Biamila "No great thing is created suddenly" -Epictetus