Absolutely, there are certain character traits that are helpful in both entrepreneurship and trading. But my career outside trading was spent teaching companies how to be more profitable/efficient and developing new products. It is astonishing how few techniques used to create a profitable business can be used to be a profitable trader.
The proof is out there and not hard to find. Go through a list of well-known hedge funds. Many are as successful if not more successful in financial terms than the more successful start-ups. Seth Klarman at Baupost Group, Daniel Loeb at Third Point, David Harding at Winton, Daniel Och at Och-Ziff. All of these guys have one thing in common: They were able to produce consistent returns with less downside risk than the markets they trade in. All based on the edge (competitive advantage) their product has compared to their competitors. There's your legitimate learning material. Once one analyzes successful hedge funds and looks at their 20, 30 or 40 year return patterns that also allows one to form reasonably realistic expectations for trading full-time. Wanna-be traders expecting to earn 100% a year, year in year out have to ask themselves how the smartest and most successful pro's in the game "only" were able to achieve 14, 18 or 21% before fees (=LIBOR + 8-12%) , year in year out over 20 or 30 year periods. So much for unrealistic expectations.
No... I'm comparing an average person with the ability to invest $15K into either a small start-up venture or a trading account. Apples to apples..... He could go either way. His chances of success are far greater with the first. And btw, millions of people every year start companies with less than $30K and still make a living. Very few traders can make a living off $30K seed capital. You might say that the trader could do it with $300K, but it's not a fair comparison to say a trader with $300K and a startup with only $30K.
100% a year is not unrealistic for small accounts. Even Buffet says his returns would be several times higher if he had only 10 million to invest. And the best hedge fund managers say similar things.
Trading is a business in which you look to benefit by obtaining prices for positions in future/option contracts or shares of a company that allow you to offset those positions at a profit often enough that, combined with your risk management parameters, the end result over time is enough profit to make a living. Both parties in a trade perceive value. The value can be based on fear or greed. You buy to initiate a position (acquire inventory at value price) because you believe price is going higher and want to profit from that by selling your inventory at a profit; you buy to offset a short position because you fear price is going higher and want to lock in a profit or prevent a loss from breaching your risk management parameters. Most businesses that offer products or services must compete for customers by offering them value in terms of price or quality or both. Often the value they offer is nothing more than perceived value. There are companies that sell nearly identical products made in the same factories under different designs/brand names for very different prices. The fundamental value of the merchandise is identical, but the perceived value is very different. There are companies that take advantage of the fact customers have no choice or perceive a lack of choice in the transaction (such as "health" care). If you're in a car accident and need a brain scan, you can't call around and get the best price first. The professional trader looks to position him/herself to offer value to other traders (customers). A trader can obtain inventory at what s/he perceives is a value price, and possibly sell it to someone else at a higher price because that someone else perceives value in buying at that price, for whatever reason. The professional trader also looks to profit from situations in which customers feel as if they have no choice but to buy from or sell to other traders at the current market price (such as in a short squeeze or a panic-driven sell off). Trading professionally (for a living) based on extensive market research (defining a statistical edge and rules for profiting from it) and test marketing (trading in a demo account or on paper) is indeed a business in which you position yourself to profit by providing perceived value to others. Just as half of small businesses fail within 5 years, a large percentage of traders fail (I believe 95% is the oft-quoted stat). The reason the percentage of failed traders is so high is because the barriers to entry are about as low as it gets. Almost anyone with internet access and a few hundred dollars can start trading. If you do your market research, develop a business plan, do ample test marketing, then start your business (trading) and follow your business plan, your chance of success should be far better than 5%.
The "most successful pros in the game" that you're referring to have to profit by managing huge sums of money and multiple large positions. It's not so easy to jump in and out of large positions when managing a large fund. On the other hand, if you have a $50K account and trade a volatile futures contract (such as CL) that provides many intraday swings, you can generate a 100% annual return trading just 1 contract at a time.
I'll say that I've been watching old reruns of The Apprentice. Not the Celebrity one but the original. It tells you a lot about the american culture when people prefer to watch celebrities than real people on a show like this. Anyways, a lot of those people were successful before going on this show. As in making a million dollar in a business to being big shot lawyer to real estate and so on. BUT, when I'm watching them and getting an idea about what they are like I can't help but wonder if they would be successful if they gave trading a try? On a side note, in one of season of the Celebrity Apprentice, the best player was a female professional poker gambler. She had a lot of skill that carried well into the business world is what I'm saying.
I think you're completely missing the point. In fact, you are actually proving my point. You go find a list of successful fund managers who were consistently successful over ten years. It's gonna be a surprisingly short list. Then compare that list to the number of hedge funds started. I think you might be surprised. Skills necessary to run a successful business are easily taught and relatively easy to implement. Not true with trading.
100% annual returns in a near-normal distribution imply a catastrophic monthly drawdown of 100% to happen every 24 months or so. If you shoot for astronomic returns you'll blow up faster than you can count to three. This has nothing to do with account size this is simple statistics. I laugh at people who say "100% is possible, but only if you use a small account". Isn't 100% also achievable if you goto Vegas and put $10k on black. Just how sustainable is it? Even if you have an edge and instead of 49% like regular roulette you can improve your odds to say 51%. How sustainable is your 100% return, considering you always have your entire small account at risk? It's about ask plausible as telling somebody you go into your garage with $500 in capital and create a company that will become the next MSFT or AAPL. The probability may not be 0.00% but it still is infinitesimally small.
There's the rub. There are very few barriers to entry for most small start-ups. If diligent, meaning thousands of hours of study and practice, the trader has a better than 5% chance at long term success. If that same person spent thousands of hours preparing to start a conventional business, his chance of success would actually be about 90%. Ceteris Paribus.. the trading industry will realize a success rate of less than half that.