Not trying to be funny but tou captured the essence of 90% of this site and I have to say it brought a bit of a smirk to my face...... Back to the point what is written here is accurate and you should take whatever is said in the context that the person saying it prob fits into one of these categories fairly well and will hve that bias painted all over their face. As part of my full disclosure in this post I trade a trend following system in FX. I do so mainly because the on/off scalping is just not for me ....it wud drive me up the wall mentally and emotionally. Dont take the emotional tax that you will pay on a daily basis w/ this profession lightly ........ it will take its toll dont kid yourself, be prepared to lose 2x what you think your going to and be prepared mentally. Be good, be careful and be prepared ....... for anything....
One thing this guy is saying that I continually hear is "I just want to make enough to make a living". Basically that means once you are profitable you don't want to increase your size (so you say now). But it doesn't make it any easier to learn to become profitable.
IM not sure how to bracket but I really enjoyed your post, straight on truth, almost non existent on the site, thanks man. Be very careful about what you hear from folks on this board. There is so much bullshit in this kind of forum. The fact is, trading is much, much harder than is generally acknowledged. Some things I've seen: The ego poster: doesn't trade at all or is a complete loser, but he'll post on ET like he is a master of the universe. Short term winner: This person has a winning streak and is feeling happy, so they post on here about how much they've made over the last 'x' months/weeks/whatever. What they never reveal is that, while they may have made 20k recently, over their trading career they've pissed away 200k. But, hey, it's fun to feel like a winner. The backtester: They've got a great curve-fit, over-optimized, mechanical system and they post as if they have made a ton of money trading it. It will blow up in real time. More likely, they'll never really trade it, because they only have a 1k account. The gambler: This person LOVES trading, and he'll post about making money, but he usually doesn't really. He's just the addictive personality who loves the thrill. These folks are almost always losers in the long run, but they will post about the joys of trading, but they are just loser gamblers for the most part. etc etc Have fun and report back in a few years. I'm committed now and have no intention of quitting any time soon, but if I had the decision to make all over again? I would have put all this energy to use in some other way. m
Don't quit your job just yet. You really need to swing trade first and develop a track record. If you can't do that successfully, just be thankful you didn't give up your steady source of income first. Don't be thinking of all you are going to make, about how you are going to be careful and not lose much, about how you only want to make just enough to replace your current income, about reading and reading and reading before you trade, etc. I'm not trying to be negative, but I was in the same boat as you and I made the leap and wish like hell I would have done it differently. Not that I wouldn't have wanted to pursue trading, but I would have done things differently. I started out fantastically out of the gate and was so thankful I made the move, then I spent the next few years wrecking my life. I still trade and think I finally have enough experience to trade for a living, but now that's not possible because of my prior mistakes. I read and read and read and thought I'd be cautious, but when you need the money generated from trading to live it's just plain tough. Trading tests the very metal you're made of. I had no idea of the emotional and psychological challenges that were ahead for me. You will find many posts on this site and quotes from books that are true gems but the problem is without experience they really won't sink in, never mind trying to live by them (understanding and practical application are two different things). Besides, without having lived it you probably wouldn't really appreciate them. I really don't mean to be condescending or to preach so please don't take it that way. I just know that for most it takes real time to learn this business (whether it be daytrading, swing trading, or position trading). Think about this before you make the move. If you try swing trading and position trading first and you can produce consistent results for 1-2 years and replace your income, you can consider making the move.....nothing lost as you were making money on top of your regular income . However, suppose you make the move (feeling very prepared) and you don't make a penny for the next 1-2 years (supposing you can live with no income for 1-2 years) or worse yet you lose 50% of your capital.......then what? No job, no income. (The second supposition is not unlikely) The problem is that with trading, you just don't have loss after loss after loss. You'll have winning days and weeks, then losing days and weeks, so it always feels like you can make it.......very deceptive this business can be. You need to be psychologically ready. In hindsight, it's not the trading techniques that matter, it's understanding and managing your emotional responses that matters. This is especially true as it relates to money management. I'm not saying that it needs to be complex, but you need to understand what the probability is that you'll win a given number of trades (i.e.-5 out of 10), and figure what % you are going to risk on a trade and how much you might make. Sounds easy right, but the problem also becomes that you don't know either of those, so how can you figure out how much you'll make or lose. So, swing trade (and daytrade a bit if you're off work), and keep a log. Did you get out within you're stop? Was the stop set appropriately for the trade? Did you get out of a winner prematurely? Did you let a winner turn into a loser? How will you handle having a winner with a partial gain........let it run or let it turn on you.......how much wiggle room will you give it? You need to think through these things otherwise the ups and downs of your P&L will ruin you. No how much you read in books or in threads, you need to come up with your own system based on your experience. Not necessarily a completely new idea on the markets, but your own compilation of the best ideas on trading, money management, etc., all in relation to your ability to trade the system real time. Also, don't paper trade, trade maybe as little as 10 shares, just so you have a stake (so you can't fudge what you "would've done")(don't factor commissions in these results with 10 shares for obvious reasons). Sorry for the rambling. Others on this site post very eloquently, but never will you see the whole puzzle at once. Good Luck, Sal School of Hard Knocks, Wall Street Campus
===== Just got thru explainig to an elite young man about ''stinkin thinkin '' as analyzed by Zig Ziglar. Some listen so much to national negative news media; they dont even know a positve newspaper like Investors Business Daily Exists. Like the numbers that include # 20; however #80 is part of the equation also. Yea, keep it positive ; but even running trading like a well researched business, dont be suprised if 80% fail, 20% persist & succeed, Wonder if you, like many of us with a positive atitude, will trade to large at first??? Rich Dennis & Andrew Carnegie actually had an ADVANTAGE by starting trading with $500 . T. Saliba had negative nickname= ''one lot'' Negative in this case is helpful.
Dont listen to naysayers and dont take any of the comments here literally. Some of the people here are successful traders: most are not. If you really want to change careers to trading go work for someone else as a clerk for a year and get trained: make sure you have enough money saved to do this plus enough money to handle another year for your startup: so about two years to get into the business. Changing careers is not easy so make sure you are mentally tough enough to do it and tougher yet to handle trading for a living.
Trading is a great vocation - with room for many personalities and styles. Some are intellectuals, some are mathematical, some are tactical, some are strategic. It's a great game. Fun to play, very addicitive. But make no mistake about the ecology of trading. 90% of the participants are on the lower rungs of the food chain who feed the top 10% of the food chain over the long run. Breaking even is not good enough either, since the house will grind you down with commissions and datafees over time. Every newbie trader is faced with a veil of ignorance - will I become a predator, or will I become the prey? To make things even more difficult, all newbies begin as the prey, and there is no fixed deadline before they "graduate" to becoming the predator. Eventually, unless you are independantly wealthy, you need to put food on your table, and as the prey in the markets, you can't do that. So if you discover you are in the 90%, you need to realize that, exit and get a job before you end up as a bum on the street. Therefore, don't burn your bridges and don't give your asshole boss the finger when you leave the office to embark on your career as a trader. This is the most important thing - prepare your parachute before you jump out of the plane. Not all traders make it, that's a fact. Compare this to a job, where you can always put food on the table as long as you show up. It's not a bad formula for survival. I don't buy this 'trading beats a job" argument - some traders will get sidelined in a job because they are terrible at playing politics and some salarymen will get butchered in the markets because they are terrible at handling risk. It's different strokes for different folks.