I've been trading for a living for few years now ... at the beginning loosing positions used to keep me up at night. I remember not being able to sleep for 4 weeks in a row once. Later on I developed something called .. indiference. That is when a trade, regardless of the result, it's just another trade. No more emotional rollercoasters. Unless ofcourse it takes me out of business
Trading is brutal man. In hindsight (I am 37 now) it would have been 10 times easier to follow through on my top rank education and a developing career as an analyst at a major bank. Maybe even more lucrative too by this point. And I am one of the ones who have made it 10 (almost 11 years) now. I have lived entirely off of trading for almost all that time, outside of maybe six months at the beginning, when my girlfriend supported us. Upsides- -No boss, office politics, corporate nonsense. -No set hours (I am not a day trader so I can even blow the market hours off if I feel like it). -No commute, suits, etc. -No sales, marketing, etc. -If I do a good job, it all accrues to me. I get rewarded based on performance: no subjective assessments, no negotiations, contracts, profit sharing, etc. -Time to study other things, read, or even goof off if I feel like it. -Intellectual gratification. I like #'s and the study of systems, time series, options, etc. are fascinating to me. I always have more to learn. Downsides- -I bear all the downside risk. -Skills not really portable in the sense that my resume is now nearly worthless from a hiring managers point of view. I would have to start from scratch somewhere most likely. -No medical insurance. -Social isolation. -Feast or famine pay schedule. Good months, bad months, Good quarters, bad quarters. I make more money than the average american, but I might make it all in one or two great months a year. -No feeling of having contributed to society or being part of a team. Now all the the downsides have remedies to some extent, but after working my ass off, I am often too exhausted to join a running club, volunteer, etc. all the things that would improve the quality of life. So like the poker players say, "Trading is a Hard Way to Make an Easy Living". Maybe I am just one of those guys who is destined to be a grinder at this game, making my living, but certainly not making any headlines, kind of a joe sixpack of private traders. I don't know, maybe a bunch of other guys here make tons of money and turn it into something glamorous, but it hasn't been that way at all for me. Without the "love of the game" factor that keeps me going on, trading would turn into a special kind of hell, not unlike being in a cubicle, or on an assembly line, or all the other things people do to support themselves. In the end, my Dad was right- To paraphrase "If you don't enjoy what you are doing it is going to suck".
Totally agree with you. Trading is for self-directed, independent folks, willing to accept the unpredictable.
A 'professional' daytrader is someone who can make money every day consistently for 20 days straight and beat or meet the market 'every day'. ie. if market is down 1 % your account size should be short and up .5% that day. unless you can do this, you are still an 'amateur' not a professional in my book. like any profession, there are standards to be called a 'professional' 80% or 90% of traders are NOT professional traders.
Took me a long time to get that. Once I did, I got into an argument with Van Tharp. I told him that his thesis ("Trading success is all money management and psychology") was faulty: -Tiger woods has great psychological skills, sure, but for a weekend player to assume that this is his major strength compared to the weekend player is absurd: - he has hit 10 Million balls on the range, and has a superior, grooved swing on which he can rely blindly. The weekend player is not stressed out because he does not "work on his psychology" but because he has a random outcome on his swings- he has really no idea where his shots will go or why. He hopes they will stay on the fairway and fears they will go in the rough. - So the skill comes first, and it helps a hell of a lot with the psychology. How could it NOT be stressfull if you put your own money on the line and you do not really know why your trade is going to work? Stress, fear etc is to be expected in this case. (Of course, the "money management is all" theory is flawed too. I told Van that this is akin to telling the weekend golfer to use better "ball management"- carry 50 balls with him? What he really needs is to learn is to improve his swing so that he does not hit his balls into the rough all the time). Van did not like this one bit
I agree. First you need an edge. Proper money management allows you to exploit the edge without first going bankrupt. But if all you have is money management you will slowly go nowhere or slowly go bankrupt, depending on your luck.
Kinda flies in the face of the whole random entry idea, doesn't it? Ya know, flip a coin and go long or short based on it. Trail a stop based on volatility. Coin tosses don't have a statistical edge, yet the "system" does work over many iterations.