I rarely visit this site, but wandered here this evening. I have been a full-time trader, with trading my main source of income, for most of 35 years. I've been trading for 45 years, but it took me most of 10 years to be regularly profitable. (For those trying to do the math, although I started investing in stocks around age 12, I did not begin trading until college, at age 20; so yes, now age 65. I've long maintained there are very few old and profitable traders; but I am one.) I took time off to start another business or two, but returned to full-time trading after a couple of years; managed futures for a few years, but disliked the business-end. Although in late 1990s, & early 2000-05 I traded individual stocks, almost always from the short side, I trade more than 90% futures since then, mostly SP e-mini; some gold, currencies; some indiv stock options; fair amount of SPY puts. Although active (the past year, generally trade 200-600 futures round-turns per day; some days > 1,000.) Although obviously many trades are day trades, I tend to hold basic positions for long periods, although, again, with high daily activity. Years ago, IMO mostly due to better "behaved" markets, I rarely had a losing year, but the past several years, my trading is not as consistent, although 2008 was probably my best trading year ever; even though a strong mkt, I still did well in 2011, but was down in 2012 (futures traders losses may be offset against futures profits up to 3 years prior.) I find current mkts very difficult, but I still carry 25 - 75 SP e-mini overnight positions. I think trading is a skill that can be both taught and learned, but an individual's psychology, including emotional make-up, is a major factor.
Thank you for gracing ET of your wisdom. 200-600 futures round-turns daily : how many instruments, and how many hours of trading daily?
Well done,and thanks for posting- the market has not felt right for years,due to FED intervention and banksters being given a cash mountain- when it does return to normality there will be a sh**storm like no other,but it's no like anyone will be living on bread and water next time round.Except in Detroit.The UK has generous welfare benefits that go on for life. 2008 was supposedly terrible but nobody I know lost a job/home but all incomes have dropped nad having been dropping for at least a decade. I guess you are trading 100+ contracts at $5 a point so a thousand bucks to scalp a few thousand? Thems big potatoes.
Yes, money printing by Central Banks worldwide has elevated most asset classes, but done little for the real economies. We've seen this movie before (directed by the evil Alan Greenspan, who continues to attempt to re-write history) and know it will end very badly, but timing is tough. It could last another 3-5 years, or 3-5 months. The S&P may have already put in a high, and the decline could be starting. But back to my trading. Even though I may build-up a position of 100+ lots, most of my e-mini orders are for 1 -5 lots. There is too much liquidity and too many smart traders, and computerized algorithms, so, IMO, scale trading is mandatory. And although I sometimes scalp a few ticks, that is generally because my position has increased, say to 70- 100 lots, and the mkt is still showing too much strength (I'm almost always short.) Hopefully anyone who has traded for more than a few days, knows the trick to trading is not finding profitable trades, or bull or bear markets, but how one handles losses. So in my case, if I am short 10 or 20 or 50 lots, I'm always worried what would happen if the mkt ran-up 5 or 10 or 20 handles. I'll take losses of $50 - $200 per contract, or preferably profit of $10 per lot. What kills both the pocketbook and especially the soul are losses of $30-50,000 (50 lots x 15-20 handles.) I consider myself a good trader, and over tens of thousands of trades, spanning 20-30 years, I am profitable on maybe 30-40% of my trades. A successful scalper would have a higher %, while long-term trend followers (some still remain) might only be correct on 20%. Most top-notch traders fall into above. Anyone claiming greater than 70% profitable, I dismiss as a liar, or has too short a trading history. High frequency systems would have a much higher %. And likely major Wall St houses, playing customer flow, etc., would have the highest %, but I don't really consider them traders, per se. So at 1/3 profitable, the statistical chance of string(s) of losses is huge, which translates into draw downs that can be measured in dollars, days, weeks, months. It is the psychological stress of losing, on balance, weeks on end, that does in most traders. What I look for is to every so often, have a 50-100 lot position and capture 20 - 50 SP handles over a 2-5 day move (drop, in my case.) Or maybe 100 handles. That could yield say $250-$500,000 in 1-2 weeks; every so often, in 1-2 days. That would make my year, with hopefully all the other approx 200 trading days break-even. Sounds odd, but as we know many retailers make their year during the 2-week Xmas period. One big difference is the retailer is able to calculate his draw down period from Feb - Nov, while a trader must be ever vigilant to control the inevitable draw down periods. I rambled above, but that is due to early Sunday morning, and a good reason why I rarely visit/contribute to trading sites/blogs.
I know 3 people who daytrade full time with retail accounts. In 5 yrs one of them managed to pay off 2 homes in Boca Raton, Florida! ($500K per home) and has 5 high end cars. Here is a person who came from Cuba, worked as a dish washer and waiter working 2 jobs. However he was smart, he divided his earnings, 1 job paid the bills the other funded his retail account. Once he deposited $45K in his account, he quit his jobs and traded full time and has done so ever sense. They are a lot of successful day traders. You can blow money converting your retirement account into an investment. Firefighter dropped $400K in an investment account with a top hedge fund. The account was down $250K in about a year! Another co-worker who opened an investment account, lost $80K in a year. That the market for you. However if I am going to loose $80k - $250K let me loose the money and not someone else earning a commission. Daytraders make good money, Swing traders make good money, Scalpers make good money, Option traders, Forex Traders all make good money. What seperates these from the other >80% DISCIPLINE & COMMON SENSE. I have a full time job and trade retail. I live off my retail account and save my annual salary. Yeah that goes untouched! Most people that loose money in the market, when I talk to them, in most cases they conducted trades only an amature would make.