Your underlying assumption is that high trading frequency is a pre-requisite to trading success (since retail fees from low trading frequency are insignificant)... whether frequency of trading is a determinant of success or not depends on approach... irrespective of approach (and its associated trading frequency), success depends on something more fundamental (see my previous post)...
Absolutely....reading "Trading in the Zone" by Mark Douglas or "Reminiscenses of a Stock Operator" by Edwin LeFerve (read between the lines, there are tons of little lesssons in there that aren't exactly printed that you may pick up the 2nd or 3rd time you read the book). You will see just how important psychology is in trading. I beleive it accounts for 80%+ of succesfful traders' strategy, the other 20% or so is technicals, reading the tape, etc. But you have to be mentally tough and regimented and understand yourself very well. The more truthful about yourself you are to yourself the more profitable a trader you will be. You will admit when you are wrong and get out and not worry about the losses. Once you have your mental straight then the money comes almost too easily.
Class B versus going proprietary: For both you will need to be NASD Series 7 and 55 liscensed maybe even 63 depending on what state you trade in. Class B traders put up their own capital (ex. $5k) to get X amount of buying power back as leverage. The advantage of going Class B is that your payout % is much higher (up to 99%). Versus if you were prop you are not putting up any capital of your own (using only the firms' capital, effectively giving you no risk since you aren't putting up any of your own money). The only downside with being prop is that your payout will suck - some as low as 50% payout of your profits. But then again that's what you get for not putting up your own collateral. You can't expect a firm to give you 95% payout when the firm itself it taking all the risk by you using their money as leverage. The advantage of Class B is that you usually only have to put up a small amount ex. $5k in order to get about 35-40x buying power in return, and this way you also get to keep more of your profits instead of giving half of them to the firm as in being a prop trader. Now with Class B if you blow out your account and lose that $5k then they usually shut down your account until you replenish the initial $5k...With a prop account the firm uses their own discretion as to when you cut you off if you are losing money. I've seen prop traders go down $50k in their account and then get fired, but they are not liable for repaying back the $50k they lost.
The humans that drive the markets have changed; several famous traders have already confirmed that they aren't able anymore to produce the returns they had in the 80's and the 90's. The behaviour of the market has change because the profile of the average trader has changed. In the beginning only big banks and funds could trade professionally. They had the financial possibilities to buy computers, software and realtime feed. When i started, the system i hired costed me 2500$ a month. Today i pay 100$ a month for a Tradestation that has 10 times more possibilities than the system a had years ago. So now you can fight with more equal weapons, which means that banks and funds have more problems due to the fact that the "enemy" is better informed and has better ways to defend himself. This also chnaged the market; trend sare not so clear anymore because there are more people that have effect on the behaviour of the markets. I agree with you that the biggest problem in trading is the human. A human brain reacts very irrational when it comes to trading. A trader should always do what his system tells, even after 5 losses in a row; at least if the system is good. I have trained myself to be able to go short if the whole world is going long and vice versa. I dont' care what others say or think, i do what my system tells me to do. But it took me years before i was able to do it.
well we need definitly 2 things one good system and an excellent risk management or would say money management, as most of us i lst a lot of time and money untill i bult a good system for me BUT even with 80% accuracy i still lose money coz of poor management and trading psycology, i m working on this issue since one year, now i started to make money again WITHOUT giving back ALL of them so beleive me : without system u r gambling , with a good system it's not enough u nedd solid money management
"Everything should be made as simple as possible, but not simpler." ~ Albert Einstein In other words, there's just as much danger in oversimplifying trading as there is in overcomplicating it. Optimization is finding the right balance.
Take this from someone who finally turned the corner and started to become one of the successful 5%. I have been trading full time for 15 months and part time for 3 years. To become successful, a person has to have 1. good money management 2. a good mental framework 3. a good system. There is no one thing a trader needs. He needs all three of the above to become successful. All three are of equal importance. I have lost many thousands of dollars because I was lacking in one of the above three. The hardest of the three (for me at least) was a good mental framework. Once a week I go over "Trading in the Zone" by Mark Douglas. The book was referred to me by Larry Pesavento of Fibonacci fame. I constantly practice my system, go over money management, and reinforce my belief system to combat the fear I encounter on a daily basis while trading. Day by day, I am becoming a better trader.