percentages of successful traders are prolly in decline since 2003 when vola begun its descent and bots took over, easy imbalances and edges like moc/oo, bullets, etc. are gone for good, nevermind the easy to predict trends of the early 90s just disappeared. i read somewhere that in the 90's 70% of traders didn't make it. now should be much more.
its even harder to find a trader who is successful year after year after year ... sometimes markets change or traders change
How "successful" were you as an "internet poker player"? What did you play, where, how many hours/week, technology/software? Trading and poker are VERY comparable... Both similar zero sum games less transaction fees. They are roughly equally difficult. imo, poker players have a slight advantage because thay are more street wise... Than the pathetic mooks around here that will believe just about anything. If you can get into the Party Poker Top 100... Where in mid-2005... The #100 player was making $3,000/month multi-tabling 30-40 SNGs/day... Which is not much more than a subsistence income... Then you can make a living trading. Otherwise... forget it... don't waste your time.
"Trading and poker are VERY comparable... Both similar zero sum games less transaction fees." false, depending on what instrument you trade, trading is not necessarily a zero sum game on an intraday time frame, it may seem so, to some extent, but it is not - mathematically speaking poker, futures trading, option trading, forex trading are all zero sum fwiw, i did very well with poker, but stopped playing when my state legislature made it a "c" felony to play, long before the federal legislation (that essentially just regulated the transfer of money but did not criminalize the individual player) a zero sum game means (simply put) that every dollar won means a dollar is lost by somebody else. poker is set up that way. so are the futures markets. futures markets have an opposite position for each position, thus there can be no NET change in wealth- there is a zero sum stocks are not zero sum. there does not have to be (and isn't) the exact same amount of money lost and won. thank god. the stock market is a wealth creating machine, just as our economy is - even though, to paraphrase, there are still "winners and losers"
This forum is about trading... NOT investing. Trading stocks with a time frame of hours to days... is a Zero Sum Game. Quantitative risk arbirtage techniques and market neutral hedging strategies... Do not accrue underlying "wealth creation" to any appreciable degree. The specific mathematical reason: If you are Long ABC... and Short a similar stock XYZ... 100,000 times over a period of many years... The underlying "wealth creation" is almost exactly 100% canceled out.
Yes. Consistency is the key. Every good fund manager can outperform S & P 500 index once in while. Doing it consistently year after year is a completely different story. Hundred of thousands of mutual fund managers in the past and at the present have been trying to beat the S & P 500 consistently. So far, only one was able to outperform this index for fifteen consecutive years. Bill Miller's fund was trailing S & P by about 6% few months ago. It is unlikely that he'll extend his streak to sixteen years. Let's examine four of the most successful hedge funds in 1997, that is, about 10 years ago. LTCM collapsed in 1998. Tiger Funds folded in 2000. Quantum Funds lost huge at Russia in 1998. They then compounded their mistake by attacking the Hong Kong Dollar in the same year. Their 1998 performance was disastrous. Despite portraying themselves as a company with many mysterious geniuses, D. E. Shaw almost went under in 1998. I heard that they lost money again in 2003, which was a bad year for statistical arbitrage. In the universe of hedge funds, I *** THINK **** James Simons(before deducting the management fee and performance fee) may be able to match or beat Bill Miller's record. The stock/bond/commodity market is a very formidable opponent.
There you go again confusing wealth creation with wealth transfer. The stock market does not create wealth. It comes at the expense of someone else anytime you go flat on a position and make a profit. Every single dollar you pull out of the market comes from someone elses pocket. Wealth is not created just because you sold a stock $10 higher than where you bought it. Just because there is more money out there does not mean there is more wealth. The US banking system has a license to pump massive liquidity into the economy from lending due to the fractional reserve system and the FED only fuels it even more. Beyond all of the smoke and mirrors is the massive consumer debt and govt debt that only continues to climb. So while wealth looks like it is being created it is just offset on the balance sheet by the debt owed to others.
The black and white answer does not exist. As I believe a master at trading has the ability to exploit and discover edges. So learning how to trade is most important. Now you know how to play poker well...but you do not need to adjust to changing rules. "Making it" is to learn how to trade efficiently and be consistently profitable. Unlike poker, the rules change in trading. I believe your post mildly suggests that you are attracted to trading from a successful gambling background. Many readers may infer trading is gambling. I say that trading can be "not gambling". so...it's just not to pick up a book or attend a course to "make it". Being successful means much more in trading and your bottom line will be the measure of it. I also would like to add...its just not the bottom line for trading to be "not Gambling". I will say that how much risk did you take on to get it...are you efficient?...Yes the ends justify the means when we measure the realistic success of a trader and we measure penis size, but the "getting there" is the underlying importance really isn't it?... Michael B.