Totally Agreed - and in that case I find it extremely hard to believe that they don't pay attention to the sharpe ratio of their trading systems. Note, I don't mean it should be the ONLY thing they look at; Could not agree more.
The concept of some guy manually scalping 300 positions per day with a mouse and a keyboard as an effective strategy that endures and holds up over time is incredibly rare. Not impossible, but rare. In that respect, I am afraid that I would agree with EMG about the success rates for retail traders. The notion of someone opening an account with $5K to scalp ES based upon tic data and common variations of standard technical indicators is just nonsensical in this day and time - might have worked swimmingly in the past, but the bots and the algos dominate the domain in today's environment. All of these fresh young faces looking to learn to daytrade with that image which endures circa 1998 tech boom or those silly youtube promotional videos - well, good luck.
To be completely honest, if you can make 2k per month a 1500 account then get a job, save up to about 7k and you can make what 3-5k per month easily.. maybe 8 or 9k on a good month. Of course, I've never seen evidence that anyone can even do close do 100% per month over any time reasonable time period. You could also take the 7k and enter the World Cup Trading competition. You should do what 100% per month.. you might outdo or match larry williams. Then you get millions.
I hear ya.....I think we are talking about different things. You are talking about investing with a hedge fund, I am talking about traders at a big prop firm.
This entire premise of high frequency manual trading, of scalping, of daytrading - the odds are just really daunting these days. Intentionally choosing to compete directly with machine-created turbulence that operates without emotion and in a rules-based realm - on a tic-by-tic basis. The concept that some kid in Boise with a PC, a $5K IB account, and some common TradeStation indicators wants to survive in that timespace occupied by the automatrons... I find that to be naive and a bit depressing.
Back in the days before there were HFT and Algo traders, scalping for a tick here and there was beyond tough. Guys I knew who were great at reading the tape/TT/order book were a few at best. Back then you had a shot when the size on a bid meant something. Now...forget about what you see in a order book. Trading any mkt for a few ticks vs the computers these days is a losing battle. Traders either need to adjust their strategies to longer time frames/go for more profit.....or probably find something else to do.
It is a complete waste. A meatgrinder, a virtual waste dump for broken and naive souls perpetuated by retail brokers and "training" educators and charting package providers. Look at 90 % of the forum material on ET. Every day we see a fresh thread started by some fresh faced kid wanting to learn how to day trade, or scalp, or trade 'price action'. The pity is that some of those naive newbies ultimately would have made excellent traders. You just cannot be common. You must Zig when the everyone else is Zagging - and I am not talking about fading markets. I am speaking strictly about strategy. The last thing you need to be doing in the marketplace is replicating what you perceive to be some sort of "blueprint" defined by others living off your vigorish.
Yeah..these dopey sites with guys trading Dow Futures for 5 ticks are the bottom of the barrel. 99.9% of the people who join these sites (and the people teaching on them) will never make it. Too many new traders want the "holy grail"...some system that will make them money with little to no effort on their part. Newsflash..aint gonna happen. You have to bust your ass and put in the time and develop a strategy that you can handle (ex...people who are not patient can not sit in front of a screen all day looking for the one/two good trades a day). Then implement it...trade it..and make any changes in size or profit goals/stops according to the action in the market.
"I read this article a while back, that said that Microsoft employs more millionaire secretary's that any other company in the world. They took stock options over Christmas bonuses. It was a good move. I remember there was this picture, of one of the groundskeepers next to his Ferrari. Blew my mind. you see shit like that, and it just plants seeds, makes you think its possible, even easy. And then you turn on the TV, and there's just more of it. The $87 Million lottery winner, that kid actor that just made 20 million on his last movie, that internet stock that shot through the roof, you could have made millions if you had just gotten in early, and that's exactly what I wanted to do: get in. I didn't want to be an innovator any more, i just wanted to make the quick and easy buck, i just wanted in. The Notorious BIG said it best: "Either you're slingin' crack-rock, or you've got a wicked jump-shot." Nobody wants to work for it anymore. There's no honor in taking that after school job at Mickey Dee's, honor's in the dollar, kid. So I went the white boy way of slinging crack-rock: I became a stock broker." Boiler Room
The message seems to say only black box traders make money. I think thats false. Trading every peak and valley is probably impossible for any human but riding a trend? come on be real, traders still use hot keys, mice and key boards. Algos are needed when you move huge size sure. Because who wants to have any doubt or emotion with 5000 size on the bid. Let math and statistics take you out of the equation and thus remove emotion associated with that kind of size.