Let me just start by saying I don't think I have any unique insights on this issue, so I'm not trying to antagonize anyone or accuse them of not being successful. I know this topic has probably been beat nearly to death, but I haven't really found much to go on yet. The question is, if you can consistently achieve returns that are high enough to make a living on a small account, then by simple compounding or managing others money why couldn't you quickly run that up to the billions? For example, a 40% annual return compounds to over 800 times the starting amount after twenty years. So your own money should build up really quickly, or you should be able to develop enough of a history that you could get other people to let you manage their money. After all, most actively managed mutual funds don't beat their indexes in the long-term, so if someone is consistently far exceeding them then they should be in high demand. And as a corollary, if the pros who can devote all their time and resources to investing can't, on average, beat the market, then what chance does an individual have who may be doing it in their part time? These are basically some of the tenets that I exposed to when I started investing by the bogleheads community. They preach passive investing in index funds and everything they said seems reasonable. I never really considered doing things any differently until a couple months ago when I found Interactive Brokers and the wide variety of investment products available and the low commissions. Long story short, but I jumped right in and started playing around with options and index futures, with crazy amounts of leverage and generating ridiculous swings. I started off great making lots of plays that worked out and making money almost every day. Most of my strategies, whether I knew it or not, were either aligned with swing trading or scalping. But for the most part I was flying by the seat of my pants, taking on too much risk and paying too much in commission by overtrading. Luckily this story doesn't end with me losing it all, because after a few crazy weeks I'm up around 10%. But I've been humbled by the experience, and I'm thinking I should give up the notion that I could ever be a professional trader unless I could get some satisfying answers to the basic question of "How could I possibly plan to beat the pros by investing in my spare time?" A few people that I've talked with about it said they can have an advantage over the pros by being nimble. Of course that sounds reasonable because let's say there was some single that indicated stocks had a high probability of dropping by .25% over the next five minutes. If you had 500k invested in various long positions you could simply short 16 contracts of ES (S&P emini) to in effect instantly flip your whole account from long to short. And you would have no trouble instantly getting filled at the going price because millions of contracts worth over $100b of this security alone are traded every day, so there is plenty of liquidity. Someone with $500m would need to sell 16,000 contracts though, and while it wouldn't take a huge amount of time, it would still take a few minutes and you might miss the move and would probably pay on average a tick or two more than the small investor. I'm sure this is a gross oversimplification of technical analysis, but from what I understand it boils down to predicting prices changes in the immediate future and the best way to take advantage of knowing where it will move would be to make yourself 100% long or 100% short that position. The two problems I have with this are, you still need to see a signal that stocks are going to fall which other people aren't seeing, otherwise no one would buy what you are selling. And secondly, even though you might not be able to scale up a strategy where you can instantly move in, out, or completely invert your position up to account values in the hundreds of millions, it would still work up to say around $25-$50m, which is probably 100 times what most people are actively trading. So if it's so easy why aren't more people making tens of millions by doing it? A lot of what I've seen are "systems" people will sell you and guarantee huge results when if it were possible they would just exploit it themselves to the maximum possible degree instead of letting others get in on it so the edge dries up. Another tactic I was testing out was scalping, mostly on ES again because each tick is worth $12.50, so if you could make the other guy pay the spread and always buy at the bid and sell at the ask, then you could make on average up to two ticks per trade minus commissions. Now I was thinking this was something good the little guy could do. It's not a ton of money so maybe it wouldn't attract the attention of some of the big shots, and there is a much smaller limit to the amount you could make while scalping. So it seems like you could make a very good return on your account size without the ability to extrapolate it to the point where you are making millions of dollars a day eventually. The problem I noticed with scalping though is you always seem to be behind the high frequency traders and market makers who can load up the order book in a microsecond after a price change. Let's say the current bid on an ES contract is 1250 and the ask is 1250.25. If you look at the order book there will probably be at least 500 bids and asks at each price, so if you put a bid in all the ones before you would have to fill before you do, or the price could move against you and then you end up paying the spread. The market makers seem to be able to cancel their orders before the tick changes so they never get caught out, but you don't have that luxury. Even if you have the same technology and can automate your process, latency would kill you because the 50 milliseconds it takes for an order to go from your computer to New York or Chicago is way too long and 500 other orders got there before you. There might be a little bit of money to be made when the order book is light, or when you are providing liquidity to other securities which don't have as many market makers, but in any case it doesn't seem like you could beat the pros and scalping, you just might be able to pick up some of their scraps. What are the refutations to these arguments, and what are some of the things I missed that do give the little guy an edge? Don't get me wrong, I really do want to believe I could make a living being a trader. It seems like the type of thing that, if it's possible, I would be very good at. I'm just worried about wasting a whole lot of my time to find out I was just dead money.