I ‘retired’ from this site a few years ago but like to check in the first two weeks of each year to see if there’s anything new being discussed. My very brief introduction is that I quit my job and started trading full time in 2006 with 100k capital. I first broke $1m in total trading profits by late 2007. I invested more in tech and trading relationships over the next decade and for the most part things have gone well. I trade a lot and I talk to other traders all day every day who also trade a lot. This forum is pretty funny. Mostly noisy but every so often there’s a million dollar piece of information that someone will just randomly and inadvertently post. Much fewer now but it’s still fun to look. I’d like to take a few interesting trading questions if that appeals to anyone. I didn’t see a current thread that immediately jumped out to me. I know a lot about most trading things. Probably the least about equity options but if it’s a good question I definitely know someone I can get an answer from. I’ll start off with what I see as the biggest hurdles retail traders face when starting. 1) lack of specialization. There’s really not a thing called ‘trading ES’ for an individual. ES is a team effort. Individuals should start with something very narrow like summer Natural gas time spreads (not a recommendation). That’s a product thats manageable by an individual who then after several months of consistent profits might expand to winter NG spreads. Product selection is important. 2) fees matter. If you don’t know your fees or what other people might be paying then you just don’t care enough. 3) Low goals / expectations. Trading is not a means to ‘support’ a family. I’m not even sure I could actually think of a worse way to accomplish that goal. Trading is all or nothing. As a potentially successful trader you will need to be quite smart. Your opportunity cost for not taking a job or starting a different type of business is enormous and you’ve traded it for a high risk high reward binary option. As time drags on that option premium you pay gets more and more expensive. In almost every case, if you aren’t making money 8-9/10 days by 6 months in you really need to quit trying and do something else. It’s very unlikely that trying more will bring a different result. 4) realize that even as things go even more electronic and people complain about HFT - hft profits are measured in a small percentage of a trading increment. The big / massive edge is still mostly manual or also in signal based trading in specific environments. There’s a lot of edge in opaque markets so if you feel like you are really in the weeds of things like delivery schedules, regulation impact, etc there’s a good chance you are doing something correct. Find things the algos can’t do.
This incredible performance that you say you've achieved: Seems to contradict (at least in your case), the following statement you made: Care to discuss how you were able to achieve such amazing success, and perhaps explain the apparent contradictions between the above 2 statements you made? Thanks.
A problem is having low goals. Goal should be very high consistency and accelerating dollars. If you target ‘support a family’ you will likely miss entirely. Consistency isn’t accidental. Thinking 3/5 days is good enough isn’t leverageable.
This forum is pretty funny. Mostly noisy but every so often there’s a million dollar piece of information that someone will just randomly and inadvertently post. Much fewer now but it’s still fun to look. YOU ARE AN IDIOT AND OR SUFFER FROM SLEEP DISORDER--! I GAVE YOU 300 PAGES OF WINNERS WHILE YOU WERE SLEEPING & NOW WE ARE ON OUR WAY TO 60 MORE WAKE UP!!!!~stoney
i am not sure what you mean by that. trading is the best way to make money because it is ALL in your hands.....it is up to you only. and it is recession free the challenge is to learn it. i read over 100 books and it was not till 1-2 decades past and a loss of over 100 000 that i realised that trading education is trading complicating. today if i write a book on how to trade, it will have one page. it is ridiculously easy. when i say that people say that it cannot be so. if it was that easy everyone would be doing it. everybody is doing it and what they are doing is complicating it so much that you have to write books. you may say why dont i write that page here and explain it. i have tried to tell many people how to do it but they all say oh no it cannot be that simple
Thank you for the opportunity. I would like if you could expand on the following: I trade a lot and I talk to other traders all day every day who also trade a lot. It is well known that you become similar to who you hang out with, but it is not always that easy, from my point of view, to find those people. How did you go about this particular, in my opinion very important, aspect of becoming a well to do professional trader?
Love this definition! But one of the advantages of trading, unlike other businesses, is that one can start with no or little money.
Hi garachen, Thanks for checking in. I've read a few of your posts earlier with interest. Interesting statement. Care to elaborate? Makes sense. The opportunity cost is huge. That's why I personally would not recommend anyone to pursue (day) trading. However, your latter paragraph, and I believe I heard you say something similar earlier, does not make sense to me. How could anyone expect to be consistently making money in such a short time period without a mentor? In a corporate environment or where you receive training/mentoring I imagine it may be different. But as an amateur entering this business I imagine 6 months is barely enough to start getting an overview of the markets and the various approaches.
I have a question related to taxes and trading in 2020. to keep things simple I'll use round numbers let's say on Jan 1 2020 the account balance is $100K due to panic selling, by april the portfolio is now worth only $80K I deposit an additional $20K to bring the portfolio back up to $100K. then with some saavy trading by Dec 31 2020 I have realized $20K in gains and the account is worth $120K. it's a disappointing year because i grew the account $20K essentially due to depositing new money, and yet I'm hit with a tax bill for the $20K in capital gains, making it a net loss in the year. Am I missing something? I don't think I should have to pay those capital gains.